The Biggest Mistake People Make With Their Tax Refund

The Biggest Mistake People Make With Their Tax Refund — And How to Avoid it

March 1, 2024 by  Vance Cariaga

Tax refunds can be used for any number of practical purposes, like paying down debt or building your savings. But refunds can also be blown on things you don’t really need. The good news is, many Americans make smart choices with their money, and you can, too.

According to a 2024 survey conducted by GOBankingRates, 25% of people plan to put their tax refund in savings this year. About 13% said they would use it to pay bills, while 15% planned to pay off debt.

Planning your taxes is another important step, and many Americans do a good job of that as well. About 73% aimed to file their taxes well before the April 15 deadline. More than 43% planned to file taxes themselves, using a tax software program such as TurboTax.

Don’t Make This Mistake

These are all positive trends. But even with roughly two-thirds of people planning to use their tax refund for practical purposes, that leaves about one-third who might make the biggest tax refund mistake — blowing it on frivolous or unnecessary things, such as an expensive vacation or new car you don’t really need.

There are much better ways to use your tax refund so that the money works for you instead of against you. For example, putting your refund into a high-yield savings account means the money will grow at a solid and predictable rate while also being protected by the Federal Deposit Insurance Corporation (FDIC).

One of the best savings options is Milli Bank. Milli is a mobile-only bank owned by FNBO whose savings account pays 4.75% APY as of Feb. 29, 2024, making it one of the highest in the industry. There are no monthly service fees or minimum-balance requirements with the Milli Savings account, and all deposits are insured by the FDIC.

Milli also offers a spending account and a feature called Jars that lets you personalize your savings.

Putting your tax refund into a savings account can help you build wealth for the future. In contrast, blowing your refund on something you don’t need or won’t use could put you in a deeper financial hole.

Look at the Big Picture and Make a Plan of Action

To Read More:

https://www.gobankingrates.com/taxes/refunds/biggest-mistake-tax-refund-avoid-it/