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Tax refund burning a hole in your pocket? Five ways to use it wisely
Ideally, your tax refund shouldn’t be at a level that makes you want to do a touchdown dance. Large refunds mean the government is getting an interest-free loan from you during the year. Sure, it’s nice to get a lump sum of cash to do something with, especially something fun. Wouldn’t it be better, though, […]
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Ideally, your tax refund shouldn’t be at a level that makes you want to do a touchdown dance. Large refunds mean the government is getting an interest-free loan from you during the year. Sure, it’s nice to get a lump sum of cash to do something with, especially something fun. Wouldn’t it be better, though, if you had use of that cash during the year by having fewer taxes withheld and taking home a bigger paycheck? But, what would you do if you had a bigger paycheck?
Maybe you have the discipline and systems in place to set cash aside from each check instead of spending it. Many people don’t, and look at it as a forced saving strategy. Hey, if that works best for you, great. Personal-finance strategies are as much about what makes financial sense as they are about what actually works for you with your behavioral tendencies. It then becomes a question of what to do with that refund. Consider carving out a portion for something fun and use the rest for something that puts you in a better financial position. Here are some possibilities.
Beef up your emergency fund
Generally, your emergency fund should cover three to six months of living expenses, or higher if you have job insecurity, dependents, or are retired. These cash reserves can cover living expenses should you lose your job, face a health issue, or need to wait out a bad market decline in retirement. The fund also can cover unforeseen expenses such as car repairs, home repairs (i.e., furnace, water heater), medical emergencies, and children-related expenses.
Knock down debt
If you have credit-card balances, use some of the refund money to knock down the balance and save yourself some interest and stress. Some ideas on how to tackle this topic and prioritize by shoring up your emergency fund include getting a handle on everything you owe, looking for a lower interest rate, and developing a spending plan to free up more cash flow.
Put it toward retirement
Retirement can seem so far away (sometimes even if it’s next year), but saving as much as you can, as early as possible, can mean less out of your pocket later due to the power of compounding. Let the money do some of the work for you. If $100 earns a hypothetical average annual return of 8 percent, you would then have $108 earning 8 percent, which then becomes $116.64 earning 8 percent, and so on. The more time you have for that magic to work, the greater your earnings might be and the less cash out of pocket you would need to accumulate a retirement nest egg.
Save for college
If you have determined that you can afford to save for your children’s college education without jeopardizing your retirement security, consider using some of your refund to add to your college savings accounts. A 529 college savings plan is an effective vehicle to use for this purpose. New York state allows a married couple an income-tax deduction of up to $10,000 for contributing to the New York 529 plan and the funds can come out tax-free if used for qualified education expenses in the year incurred.
Improve your home
If there are some home improvements you have been hoping to pursue, your refund could help keep you from having to borrow the money for them. As with everything else, balance this wish-list item with your other goals to make sure everything is properly prioritized. We have seen clients overextend themselves in this area, leaving something else at risk (retirement, for example).
Your refund might feel like found money, but rather than spending it all on something frivolous, now is your chance to do something practical with at least some of it so that you might produce longer-lasting results.
Cynthia (Cindi) Turoski, CPA, CFP, is a managing member of Bonadio Wealth Advisors, LLC, and has more than 25 years of tax and financial experience. Prior to joining Bonadio in 2008, Turoski was managing member of DR Financial Services, which merged with Bonadio to form Bonadio Wealth Advisors.
Strengthening Agriculture in New York State
This year’s News York State budget did not contain nearly enough tax relief for families and small-business owners in our state. However, the one area where New York got it 100 percent right was its investment in our crucial agriculture and markets programs. As the representative of an agricultural district, I work especially hard
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This year’s News York State budget did not contain nearly enough tax relief for families and small-business owners in our state. However, the one area where New York got it 100 percent right was its investment in our crucial agriculture and markets programs.
As the representative of an agricultural district, I work especially hard to fight for the interests of our family farmers. With so many elected officials hailing from New York City, it can be a challenge. But nonetheless, I share stories with them about the farmers and dairy producers in my district and the innovations they are developing in one of the oldest industries in the world.
Agriculture is a powerhouse in New York that drives much of the upstate rural economy. Last year, the industry contributed $6 billion in sales to the state’s economy. Family farms account for much of the employment in our rural areas, and their business activities keep other service-related industries in business. There is no doubt that farming drives the rural economy.
Every year, the governor has tried to cut funding from agricultural programs. This year, he proposed $8 million in cuts — cuts even the Assembly Democratic majority thought were too much. The legislature worked across party lines to increase funding for these programs by millions of dollars. And, much of it will be used to support rural communities like those in my district.
These agricultural programs create ways for our family farms to be more profitable, expand the markets for their goods, increase scientific studies that support New York’s farmers, instill a passion for farming in our youth, and support community-based programs like Cornell Cooperative Extension, among others. New York’s farmers continue to make a commitment to us and our state; it is so encouraging to see that my legislative colleagues gave them the same commitment.
Marc W. Butler (R,C,I–Newport) is a New York State Assemblyman for the 118th District, which encompasses parts of Oneida, Herkimer, and St. Lawrence counties, as well as all of Hamilton and Fulton counties. Contact him at butlerm@assembly.state.ny.us
Years ago, retailers discretely called them “foundation garments.” Bras, girdles, and corsets. You knew they hid lots of things. They re-configured some and padded others. And, camouflaged them all. (No way those body parts could be that rounded, slim, or pointed.) What they displayed was different from what was really there. It was a bait
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Years ago, retailers discretely called them “foundation garments.” Bras, girdles, and corsets. You knew they hid lots of things. They re-configured some and padded others. And, camouflaged them all. (No way those body parts could be that rounded, slim, or pointed.) What they displayed was different from what was really there. It was a bait and switch deal, for sure.
Maidenform’s theme could have been the old song, “Yes, I’m the great pretender.” Hillary Clinton might consider this for her presidential campaign.
Now, if you like nostalgia, take heart. The meaning of “foundation” lives today. As in the Clinton Foundation. A new book, “Clinton Cash” by Peter Schweizer, details and alleges what is no secret in Washington, DC. The Clintons have taken in many millions — supposedly for charitable works. To save the world, and all that. However, the book alleges the money bought favors from Mrs. Clinton, Secretary of State. Along with favors down the road — if she becomes president. You might call it a form of crony insurance.
Now, I am not picking on the Clintons. Hundreds of politicians set up such charities. The charities do a bit of good work. And, “bit” is probably an accurate word. Meanwhile, they employ relatives and friends. (One report claims the Clinton Foundation spends a bit on charity. And, a mountain on friends and political staff. Surprise, surprise) They hit up companies, people, and governments for big donations. To buy influence, favors, and face-time with the politicians.
Let’s be honest. This is the primary purpose of most of these foundations. It is also the main goal of the teams that twist arms for campaign contributions for shoo-in candidates. The candidates don’t need the money because they are shoo-ins. But you need to give. If you want to stay on good terms with the politicians, that is.
A good example of this is New York Senator Chuck Schumer. He has already raised nearly $3 million for his 2016 campaign. Yet his re-election is certain. He’ll need to spend maybe 25 cents on campaign publicity.
Used to be these guys could keep money they did not spend for their campaigns. Something tells me that does not surprise you. I cannot recall whether this scam was ended. And I am too weary of corruption in politics to try to look it up.
Our politicians are among the most charitable people on earth. You would think this if you saw the list of their charities. Albany is awash with them. The word “awash” implies liquid. Like the liquid in cesspools and septic tanks.
Now the Clintons are the best at lots of the things they do. They make competitors look like bush-leaguers. This is surely true in this influence-peddling racket. They have perfected this dodge. They have set the bar for this as high as Mount Everest’s peak. If there was a Nobel Prize for influence peddling they would win it every year. Hands down. Or, maybe, hands out is the right term.
As you know, the Clintons are taking fire from all sides in this scandal. Some of this comes from politicians who envy them. They are berating their staffs at this very moment.
“Hey! Hillary gets $600,000 for three speeches? And all you line up for me is $1,500 and a rubber chicken dinner? Come on man, Bill gets half a billion and maybe more. To grant a pardon for that sleazy crook Marc Rich. And, Rich’s shapely ex-wife spends lots of nights at the White House, nudge, nudge, wink, wink? When guess who is away? A perfect deal for him. So what do you guys line up for moi? Tea with the Association of Retired Librarians? What are we doing wrong here, guys?”
You have to concede that politicians are getting better at this. Used to be they took envelopes stuffed with cash. Vice President Spiro Agnew, hello, hello. That was high-school stuff. Next, they conjured up this campaign contribution con. Let’s rate that as an undergraduate activity. Today’s top politicians work at more sophisticated levels. They are worthy of honorary doctorates in influence peddling.
From Tom…as in Morgan.
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and TV show. Contact him at tomasinmorgan@yahoo.com
CenterState CEO announces Manufacturing Careers Partnership
DeWITT, N.Y. — CenterState CEO’s Work Train program has announced the Manufacturing Careers Partnership, which it describes as a “new workforce-development initiative.” The organization made
Oneida Financial profit edges up in first quarter
ONEIDA, N.Y. — Oneida Financial Corp. (NASDAQ: ONFC), which is set to soon be acquired by Community Bank System, Inc. (NYSE: CBU), reported this week
Honeywell to cut 41 jobs in Skaneateles
SKANEATELES FALLS, N.Y. — Honeywell Scanning and Mobility will lay off 41 employees between July 1 and Dec. 31 at its plant, located at 700
Elmira Savings Bank’s net income dips 5 percent in 1st quarter
ELMIRA, N.Y. — Elmira Savings Bank (NASDAQ: ESBK) reported this week that its first-quarter net income fell nearly 5 percent to $1.01 million from $1.06
MACNY names SRCTec’s Stevens as Innovator of the Year
SYRACUSE, N.Y. — MACNY, The Manufacturers Association, today announced that it has named Gary Stevens of SRCTec as the 2015 MACNY Innovator of the Year.
Ultralife posts profit in first quarter
NEWARK, N.Y. — Ultralife Corp. (NASDAQ: ULBI), a Wayne County–based maker of batteries and communications systems, this morning reported operating income of $822,000 on revenue
Tompkins Trust hires Bisaccio to lead expansion into Syracuse market
SYRACUSE, N.Y. — Ithaca–based Tompkins Trust Company announced it is expanding its financial-services offerings into the Syracuse market, and has hired an experienced commercial banker,
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