Tax Refunds: Are you helping your customers spend it wisely?

Piggy Bank

Now that Tax Day is upon us and refunds are trickling in, your customers and members are being provided with new funds. But whether they spend, invest or save, are you guiding them to make the wisest decision?

Christopher McGill, president and CEO of East River Bank  in Philadelphia, PA has a few recommendations for his customers on how to use their refund dollars.

While the smartest decision is to obviously pay off a prior debt or invest that refund, spending – even just a portion of it – on a smart purchase is actually advisable, according to Christopher.

Rule of Thirds

Christopher always recommends the “rule of thirds” when upon receiving an unexpected amount of income. Divide the refund into thirds and put one portion towards a credit card bill or other debt, another third into savings and investment, such as an IRA and the final amount towards something for you.

Save More Money

However, instead of spending it on something frivolous like a trendy handbag or new set of golf clubs, consider splurging on a purchase that could actually save you money over time. Examples include an espresso maker (much cheaper than a daily trip to Starbucks), a bicycle (a healthier and more affordable means of transportation) or a high efficiency appliance, which can help you save loads on energy costs.

Invest in Yourself

Another smart splurge is investing in your career by furthering your education. Use part of your refund to take some continuing studies courses to sharpen your skills and better your chances for that promotion and, hopefully, salary increase.

Spend Selflessly

Finally, for the most selfless purchase of all, consider this the time to get some life insurance. If you have a spouse or children who depend on your income, invest in their financial security and your own peace of mind. While it might seem depressing, spending a few hundred dollars a year to create an insurance protection fund for your family is something definitely worth considering.

What advice are you giving your customers and members?


Written by Staff