April 9, 2014 THE VILLADOM TIMES I • Page 13 How to get more out of your tax refund Income tax season is a happy time for many people. Those who anticipate a considerable refund on their taxes look forward to having extra money; some individuals even plan to finance big-ticket purchases entirely with their refunds. Smart money management can turn a refund check into a nice nest egg or stretch dollars to make the most of this windfall of cash. The following money-manage- ment tips can help anyone develop strong saving and spending habits that can pay dividends for years to come. Get organized: When looking to make the most of your tax refund, start by organizing your financial documents and getting a grasp on your spending and saving behaviors. Examine your income- to-expenditures ratio to see where the majority of your money is going. It can be difficult to make significant changes with regard to your finances if you don’t have ready access to your financial records and a strong appreciation of how your money is being spent. Pay off high-interest loans: When addressing your finances, take inventory of any high-interest loans, including credit card bills. It will save you more money in the long run to pay off this type of debt as soon as possible. The earlier such debts are eradicated, the less you will ultimately pay in interest. In addition, paying off debt helps establish a better credit record and score, which can make you eligible for lower interest rates in the future. Using a refund to eliminate debt is more benefi- cial than simply letting the refund sit in the bank, where it is likely to accrue less interest each month than the interest that accrues on credit accounts with outstand- ing balances. Investigate savings programs: It is esti- mated that customers who do not have an account at a bank or credit union spend, on average, more than $800 at check-cashing businesses each year. Opening an account with a credit union or bank will immedi- ately save you money on check-cashing fees. Speaking with a banking represen- tative can also provide information about various programs that will enable you to save your refund and earn money on it through interest accumulation. In the National Retail Federation’s annual Tax Returns Study, 40.2 percent of respon- dents said they planned to stash some of their refund in savings in 2013. While tra- ditional savings or checking accounts may offer nominal interest rates, longer-term certificate of deposits or money market accounts may yield more interest. Talk to an investment specialist: Your income tax refund may be just what you need to start investing. A 2012 study by TD Ameritrade indicated 63 percent of respondents said they plan to save or invest at least part of the money they get back on their taxes. A financial planner or stock broker can guide you through poten- tial investments that carry the right port- folio and level of risk for your needs. If you prefer to do the work yourself, many investment companies have user-friendly websites where account holders can manage their own investments and moni- tor the daily performance of those invest- ments. With the right investment, you can turn your refund into a substantial amount of money over the course of several years. Stretching tax refund dollars means making smart choices regarding money management. Rather than splurging on big-ticket items, use your refund to grow your savings, begin an investment portfo- lio, or pay down debt.