Financial advisors suggest spending tax refunds wisely - WREX.com – Rockford’s News Leader

Financial advisors suggest spending tax refunds wisely

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Tax refunds are coming for many people around the country, and while it's tempting to spend those refunds on big ticket items or vacations, financial advisors suggest taxpayers do just the opposite.

In fact, it may be wiser to pay down credit cards or other high-interest loans, which would reduce interest penalties and decrease the number of monthly payments. Making a contribution to your IRA would also be helpful, and if you have low income, you could be eligible for a tax credit or deduction.

Advisors also recommend saving the money, whether it's for college or an emergency fund.

"Most people need six months of their income saved for an emergency fund, and many people don't have that, so that's a good way to get started using your tax fund," Kelly Eickstead with Riverside Community Bank says.

Making an extra payment on a mortgage is also recommended.

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