The summer is in full swing! June brings us the official start of summer and the longest days of the year, which means plenty of time to enjoy the sunshine and extra evening light. It also brings Father’s Day and graduations galore, plenty of fun things to celebrate! Speaking of fun things to celebrate, my Grandson Spencer made his Bar Mitzvah on Saturday, May 22. It was a lovely party outdoors, with tons of delicious food, games, bouncy houses, laser tag, a petting zoo and even a karaoke machine! Best part was that we were able to celebrate with our friends and family.
June also gives us a break from any major financial deadlines but, with it being the halfway point of the year, it’s a great time to take stock of your financial goals and make any needed adjustments. With the tax deadline coming in on May 17th of this year, chances are you’ll be receiving a tax refund in June. Oftentimes, tax refunds can be extra money not allotted for in your budget so if you’re needing some inspiration on what to do with your tax refund that’ll set you up year-end success, I will give you some ideas:
1. Pay down debt — particularly high-cost credit card debt. It is probably the single-best thing you can do with a refund. The average annual percentage rate for all credit card accounts is 14.87% to 16.88%, according to Federal Reserve data analyzed by CNBC Select. Paying off a $3,000 balance would save you $446 to $506 annually. Also try to never charge on a card with a balance or you will start paying interest on the money as soon as you charge instead of waiting until the due date.
2. Invest in your retirement plan. You can invest and deduct up to $6,000 in an individual retirement account or $19,500 in a 401(k) plan — more if you are over age 50. With the average American significantly behind in saving for retirement, retirement plan contributions are always a good idea. The deadline for 401(k) contributions was the end of last year, but you may be eligible to contribute to an IRA until the extended July 15 filing deadline. “It also has a positive impact on your 2021 taxes,” TurboTax’s Greene-Lewis said.
3. Build an emergency fund. The average American does not have much of a cash cushion to cover unexpected expenses such as health-care costs or car troubles. If the coronavirus has taught us anything, it’s that circumstances can derail the best-laid plans.
4. Invest in yourself. You can get a tax credit of up to $2,000 to help cover the costs of any class or course at a university or vocational college. If you have aspired to broaden your educational horizons or add to your skills base, a refund is your ticket. The tax credit also provides a nice leg up on next year’s tax filing.
5. Invest in your business. If you’re self-employed and could use a computer upgrade, better transportation or a workspace improvement, invest your refund in your business. It will not only improve your ability to generate income but again will provide some tax benefit for next year’s filing season.
Or you can Recharge with that refund. Self-care is very important. Especially after the year we just had. You can take a trip, have a nice night out, have a spa day, perform a random act of kindness. It is always nice to do something for someone else. Or you can buy a little something for yourself, like “It’s not just money, it’s life”, my new book, which will be available on Amazon very soon!
Fun fact, June 24th brings us the last supermoon of the year, the Strawberry Moon! If you’re wondering where this moon got its name, historically, it signaled the short picking season of strawberries. It’s also referred to as the Rose Moon, as roses tend to bloom heartily during this time.
And if you need any advice on where best to put funds from a tax refund, please don’t hesitate to reach out. You can call my office at 845-627-8300. My Client Service Coordinator will be happy to set up a convenient time so I can help.
We hope you’re enjoying the summer weather and using the extra light to have some relaxing backyard cookouts!
Beth Blecker, CEO