A Wise Strategy for Tax Refunds | CCCS of Rochester
Skip to Main Content

A Wise Strategy for Tax Refunds

By Chad Rieflin

Tax time is always exciting when a refund is anticipated. Plans and projects that might have been on the back burner are now made possible through the injection of a large sum of money. Although this excitement is genuinely warranted, consumers should be cautious and keep a level head during this financial opportunity that only comes once a year. At the Credit Education Bureau (CEB) – an extension of Consumer Credit Counseling Service of Rochester (CCCSR) – we recommend a balanced approach for how a tax refund should be used. An example of a well-balanced strategy might look like this:

- Personal/recreational – 10%

- Household projects – 15%

- Emergency savings – 20 %

- Paying down debt – 20%

- Short-term savings/holidays – 20%

- Future savings/retirement – 15%

Granted, each individual will have different priorities based on their current situation. For example, a greater percentage might be committed to debt payments this year and adjusted accordingly for subsequent year’s refunds. Bear in mind though, it’s never ideal to put all of your eggs into one basket. Utilizing a holistic approach allows us to move forward financially with effectiveness, satisfaction and success. For more wise-spending strategies and good money-management practices, contact us by calling (585) 546-3440 and visit: www.cccsofrochester.org or www.crediteducationbureau.org.