03/07/2019
5 Ways to Use Your tax Refund Wisely 2019!
Who doesn’t love getting a tax refund?
It’s exciting to know that your bank balance will get a boost. But remember, a refund isn’t a bonus -- it’s your hard-earned money, which is why you should make the most of it. If you’re thinking of buying a new home this year -- whether it's your first home or the one you plan to retire in -- financial planning is critical.
Expecting a refund? Make a bigger impact on tax refund with these tips:
1. Take your tax refund to buy your first home. Use your tax refund along with NJHMFA free down payment assistance program. The NJHMFA state-wide Down Payment Assistance Program (DPA) provides $10,000 for qualified first-time homebuyers to use as down payment and closing cost assistance when purchasing a home in New Jersey. The DPA is an interest-free, five-year forgivable second loan with no monthly payment.
2. Take your tax refund a buy an Investment property. Use can also use NJHMFA free down payment assistance program if your buying a 1-4 unit property and your living in one of the unit.
3. Use your tax refund to Lower Your Mortgage Rate. A high mortgage payment can account for a large majority of your income, leaving you with very little to cover the rest of your regular living expenses each month. It’s best to keep your mortgage costs low and under 30 percent of your take home income so you won’t feel a financial strain each month.
4. Pay off debt. Americans’ credit card balance payments hit an all-time high of $1.2 trillion in 2018, according to the Federal Reserve. Because of the record numbers, it’s no surprise that the top way Americans are spending their tax refunds is on debt. If you have a refund on the way, consider using that money to knock down or eliminate debt. Odds are, you’ll save more money from interest charges in the long run.
5. Build your savings. Because families aren’t prepared for emergencies like medical bills, some go into debt paying for them. Others rely heavily on tax refunds to cover the costs. Unfortunately, it doesn’t prepare those families for future emergencies. Stashing away for emergencies means you’re less inclined to go into debt to cover these costs. The truth is, most Americans are not ready for financial emergences. Most of us can’t handle medical bills, car problems, or job loss. But if you save your tax refund – which is $3,000 on average – we may have a chance.
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