You fill out your tax returns and discover that a refund check is coming your way. What do you do, start shopping for an E-bike? Another option might be to put that money toward your future.
Here are five reasons why:
- Think bigger. Sure, an E-bike would be fun, but a new, more comfortable car or home might be more of a priority. Put the refund check into a savings account until you’re ready to buy. The bigger down payment you can make with the extra money will reduce your monthly payment, saving you money two ways – now and tomorrow.
- Avoid buyer’s regret. Two months after purchasing the E-bike, you have an emergency that’s going to cost you a lot out of pocket. It could be a major home or car repair, a big medical bill, or a limited opportunity to invest at a good return. Then, you might have regrets about splurging on that that two-wheeled “toy.”
- Grow your savings faster. When you deposit your check into a savings account or certificate of deposit, your interest earns interest. With rates trending higher, your interest earnings will grow faster.
- Retire when, where you want. The small sacrifice you make today will pay dividends when you’re older. Decades from now, you will have a bigger nest egg that might allow you to retire earlier or with a better lifestyle. Retirement savings vehicles like Individual Retirement Accounts (IRAs), 401(k)s and Roth IRAs grow faster than regular accounts because of their tax advantages.
- Be at peace with your monthly statement. Feel anxiety when opening your monthly statement arrives? With additional funds – that you didn’t expect – in your savings account, you can rest easier knowing that things are looking up in 2023.