ROANOKE, Va. (WFXR) – Millions of Americans will get money back from the Internal Revenue Service (IRS) this tax season. Many financial advisors are concerned people will not use that money in the best way.
Paul Higgins, a financial advisor with UBS Financial Services in Roanoke, said, “Tax refunds are great, but it’s sort of like a sugar high.” He further explained, “You have the money coming in and it’s tempting to treat yourself on something, and that’s probably a great thing but not the best thing to do.”
Higgins said spending money quickly is a common mistake. Instead, he encourages people who get a tax refund to put the money towards something that will benefit them in the long term.
He explained, “Maybe pay off some debt that you have. Maybe some expensive debt, like credit cards.”
In addition to paying expensive debt, Higgins suggests people put the money into an emergency savings fund, a 529 savings account to cover post-high school education, or a retirement plan of some type.
Higgins said, “One of the first things I would do is sit down and actually have a plan. Put down on a piece of paper what your financial situation is.”
Click here to check the status of your refund if you are expecting money back but have not yet received it.
