Using a Tax Refund

Best way to use tax refund

Before I close, I do want to congratulate you on using your tax refund wisely and paying down your debt. Many people waste a good opportunity to leverage their tax refund to improve their finances and instead blow it. However, one last thing, if your situation hasn't changed from last year, increase your number of deductions with your employer so that you reduce your income tax withholding by at least $400 a month. Use that extra monthly income to pay off the remainder of your debts. It is much better to receive that money each month and use it to pay down debt that's costing you interest. As it is now, you are giving Uncle Sam an interest-free loan of $6,200 for a year.