2025 Stewarding Tax Refunds

Are you expecting a tax refund?

Tomorrow is tax day – the deadline to file your income taxes. If you’re expecting a refund, plan ahead to maximize efficient use of the money. You’ve worked hard for that refund, so now put it to work for you. Here are my 3 suggested ideas:

Build your emergency savings and pay down debt. Having some funds set aside will prevent the need to borrow when the unexpected occurs. When applying a refund to debt, you can use the avalanche method, which attacks the loan with the highest interest rate first. This saves you the most money in the long run. The snowball method, on the other hand, gives a psychological advantage by eliminating the smallest loans first. Always seek to negotiate with your creditors before paying off a debt. They may be willing to reduce your interest rate or total debt. If you already have emergency savings, and debt’s not an issue, then invest in skills that will improve your earning power. Enroll in courses, seminars, or conferences that will impact your career. Seek the advice of a mentor or colleague.

Another option is to invest the money towards your future. Depending on your goals, this might include the down payment for a house or retirement funds. Consider maxing out your 401(k), IRA, or HSA, and if you expect a really large refund, then take a look at your W-4 Form. You may need to increase your allowances. Marriage and babies have a direct impact. Check it annually and revise it at any time. Be grateful and steward those refunds wisely!

And if you’re struggling to pay bills, check out Crown’s budget coaching program. It can put you on the road to financial freedom. Go to crown.org. Click the “Get Help Now” tab. You can start today at crown.org.