How To Plan For Future Income Tax Refunds To Meet Your Financial Goals

If you're anything like the rest of the country, you look forward to receiving your tax refund. Last year the IRS refunded around $183 billion to over 62 million individuals, with an average refund of a whopping $2,910.

This type of windfall can feel like you've won the lottery. So much so that you probably start imagining all the ways you can splash your newly gained cash. 

While that sounds fun, you should consider putting it toward your long-term financial goals, making your refund last longer and giving you sustained happiness rather than in-the-moment glory.

With that in mind, let's take a look at several ways you can plan to use your income tax refund to realize your financial dreams.

5 Ways To Plan For Income Tax Refunds To Make Your Financial Goals Come True

1. Put It In An IRA

You can use your refund and put it in your traditional individual retirement account for the current tax year. Everything inside the account is compound tax-free until you withdraw it. Plus, the contribution could reduce your taxable income for this year. 

However, ensure you remain abreast of the contribution limits before taking this route. For most filers in 2022, it was $6,000. However, this can increase every year. 

2. Contribute To Your Savings Account

If you don't want to contribute to your IRA, you can put the refund into a high-yield savings account. This money can then be earmarked for large financial goals, like going on a once-in-a-lifetime vacation, putting a deposit on a house, or paying for your wedding.

Naturally, you don't have to earmark your savings pot right now. After all, your goals may change as life throws curveballs. But just having the money there will let you adapt easily as your priorities transition.

3. Build Wealth Through Investing

Use securities like stocks and bonds to build a diversified portfolio that grows substantially over time.

Alternatively, use ETFs and mutual funds for low-cost diversification. This way, you won't have to stress about choosing particular stocks or bonds. Not to mention you can get started with just a few dollars.

4. Give Your HSA An Influx

Some health insurances come with a high deductible plan that includes a health savings account (HSA). You can inject your tax refund into this to give you more money when you or your loved one requires medical treatment.

5. Bolster Your Emergency Fund

Starting an emergency fund should also be high on your to-do list. Financial security means planning for unexpected events. And since a survey found that only 40% of Americans could pay for an unexpected emergency of $1,000, setting up/bolstering an emergency account is a savvy move.

But what if an emergency strikes before you manage to boost your fund?

Sometimes, an emergency will hit before you've been able to use your tax refund to bolster your crisis fund. While frustrating and stressful, you don't have to struggle alone — Mississippi Title Loans, Inc. is here to help. 

We offer safe, convenient, rapid loans to bad credit borrowers, allowing you to receive an influx of cash in as little as 48 hours. You can get three different loan types from us. These are described below:

• Title loans — With this type of loan, you can borrow between $300 and $2,500 to fund your emergency. The specific amount you can get depends on the value of the vehicle being used as collateral to secure the loan. The more it's worth, the more you can borrow. However, it's always important to ask for the amount you need only. You don't require a good credit score to get one of our title loans. All you need is a driver's license, a vehicle, and a lien-free title to your vehicle.
• Signature installment loans — These loans offer a way for those who do not own a vehicle to get emergency cash when they need it most. They're unsecured personal loans that require nothing but a few documents and your signature, alongside a promise to repay the loan in full by the pre-agreed date. Your credit will be checked, but you don't need to have a glorious score to be approved.
• Payday loans — Last but not least, we offer payday loans, another short-term type of loan that lets you borrow money quickly. You can borrow between $100 and $400. We will determine how much we can lend you by looking at your state-issued ID and your most recent pay stub.

Cover Emergencies With Mississippi Title Loans, Inc.!

Plans don't always work out like you expected, but failing to plan is the same as planning to fail. Thus, the methods above will increase the likelihood of meeting your financial goals. And don't forget that we're here for you if an emergency strikes before you can save. 

To find out more, complete our online inquiry form and we'll give you a call to guide you through the process.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.