If you’re like most Americans, you probably look forward to tax season for one simple reason—your expected refund! In 2024 alone, the Internal Revenue Service (IRS) returned over $245 billion to taxpayers, with the average refund totaling $2,850. While it’s tempting to splurge on large ticket items as soon as that deposit hits your account, taking a strategic approach can help you make the most of your money. Our team at Legacy Bank is dedicated to helping customers meet their financial goals, which is why we’re sharing simple, smart ways to maximize your tax return and set yourself up for long-term success. Keep reading to make your money work for you!

Build Your Emergency Savings

Emergency funds are critical for covering unexpected expenses like major medical bills, significant car repairs, loss of income, or unplanned home projects. By having some cash readily available, you can better tackle financial surprises without racking up credit card debt or dipping into long-term investments. If you haven’t yet established an emergency savings fund, using part of your tax return can be a great opportunity to get started! And, if you already have a fund started but have recently dipped into it, consider using some of your refund to replenish it and continue saving.

Click here to learn more about establishing an emergency savings fund!

Pay Off Debts

Debt—the dreaded four-letter word of the financial world. If you have credit card debt, student loan payments, or personal car loans, it’s highly advisable to contribute some of your tax refund toward paying these debts off. The sooner you eliminate these, the more you will save yourself on unnecessary interest payments in the future. After all, less debt equates to more financial freedom, meaning you’ll have more breathing room in your monthly budget.

Curious about consolidating your debt? Utilize Legacy Bank’s online calculator to determine if debt consolidation is right for you.

Contribute to a Retirement Plan

Retirement may seem a long way off, especially if you’re just now starting your career. But it’s never too early to start saving! If you want to do your future self a favor, start making regular contributions to your retirement plan now. Using a portion of your yearly refund to boost your retirement account—whether a traditional IRA, Roth IRA, or other—can help your money grow quicker due to compound interest. Whatever extra contributions you can make, the earlier, the better.

See how compound interest can help your money grow!

Invest in Home Improvements

Have you been putting off home improvement projects because they feel out of reach? Your tax refund could help bridge the gap! Whether it’s upgrading to a new refrigerator, washing machine, or dishwasher—or tackling a much-needed renovation—using these funds can ease the financial burden. Not only will these upgrades enhance your daily life, but certain home improvements can also boost your home’s resale value, making them a wise long-term investment.

Treat Yourself!

Who says you have to save every penny of your tax refund? You’ve worked hard all year; you deserve to treat yourself! Whether upgrading your phone, buying a new computer, or finally getting that pair of running shoes, a little self-investment can go a long way. And treating yourself doesn’t have to mean splurging irresponsibly; it can be about making a purchase that supports your goals. So go ahead—enjoy a portion of your refund guilt-free while still keeping your long-term financial goals in mind!