Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
Discover how an award-winning banking experience could be your next little win.
Logo courtesy of CNBC
By Patrick Russo, DepositAccounts.com
It is that time of year again – cherry blossoms, April rain showers and tax refunds. If you are in the majority of tax return filers that will be receiving a refund this year, the decision about how to spend it can be a real battle. Here are several reasons why investing that refund in a savings account is a wise decision.
Refunds are not winning lottery tickets
The temptation to treat a refund check like a winning lottery ticket is significant because you are receiving a lump sum of money (the average refund is $3,000) all at one time. It is more realistic, though, to view your refund as a reimbursement of the loan you made to the government for the previous tax year.
What if that same amount of money had been deposited as income into your bank account on a monthly basis over the course of the previous tax year? Would you treat it the same way as the lump sum? By viewing your tax refund as deferred savings being paid back to you, you are more likely to invest it wisely.
Future prosperity is built on the back of delayed gratification
“Chickens coming home to roost” is an expression conveying the idea that present actions can bring negative consequences in the future. By using credit to consume goods and services, you can maintain a higher standard of living in the short run. However, when credit dries up, or you default on a loan, or you are 30 years older and still having to pay off your debt, you may very well wish that you had delayed that gratification until later on. Opening a savings account for a younger family member and using your tax refund as an initial contribution to get him or her started is a great way to teach the importance of minimizing “chickens coming home to roost” consumption on credit and only spending what you have.
Savings will help you get out of debt more quickly
Many personal finance experts encourage consumers who are fighting to get out of debt to make sure they have money saved for an emergency. If an urgent financial need were to arise, and you had an inadequate amount of savings to cover it, you could be forced to incur additional debt. Depositing your tax refund into a savings or checking account could be a great way to ensure that your debt repayment plan continues, uninterrupted, all of the way to the end.
While there are definitely lots of ways to waste your tax refund, hopefully the above ideas will help you see some of the benefits derived from putting it into a savings account and watching it grow.
Patrick Russo writes for DepositAccounts.com, a site that publishes comprehensive banking data and strategies for consumers nationwide.
Sign up for our monthly newsletter to help you stay at the top of your financial game.
Welcome! You'll now have financial tips sent to you directly each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.