According to the Internal Revenue Service, over 70% of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017 and will receive a similar amount this year. As Americans begin receiving their refunds along with additional benefits from the Tax Cuts and Jobs Act passed in December, FSB is pleased to share seven tips on how to use their money wisely.

“The tax season is the perfect time to hit the reset button on your finances,” said Ron Magoon, President & CEO. “Your refund can help put you on the right path towards reaching your financial goals. You may also want to consider using it to pay off debts or to create an emergency fund for unexpected expenses.”

To help consumers make the most of their money, FSB offers the following helpful tips:

  • Save for emergencies. Did you know that more than 60% of Americans are not prepared for unexpected expenses? This figure is startling! You can devise a savings strategy simply by opening a savings account to serve as an “emergency fund.” Ideally, it should hold up to six months of living expenses in case of an unanticipated financial hardship, such as a job loss or major car repair.
  • Pay off debt. You may also want to consider using your tax refund to pay down existing balances on loans with high interest rates or to chip away at smaller debts.
  • Save for retirement, college or future health expenses. Consider opening or increasing contributions to a tax-deferred savings plan, such as an employer-sponsored 401K or a personal IRA. Your bank can assist you with opening an IRA, and your employer can help with increasing contributions into their 401K plan. You may also want to give some thought to opening a tax-advantage 529 education savings plan to put money away towards your child’s college education. Or, you can open a Health Savings Account to save for future medical expenses using tax-free dollars. Note: HSAs are only available to individuals and families with a high deductible health insurance plan.
  • Pay down your mortgage or student loans. Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loan. Be sure to inform your lender that extra payments should be applied towards the principal, not interest.
  • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bonds to be purchased using federal tax refunds for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  • Invest in your home. Earmark some of your refund towards making home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will save you money in both the short- and long-term.
  • Donate to a charity. Giving to a charity will make a difference in your community and you can claim it as a tax deduction, if you itemize on your federal tax return.

FSB also stresses the importance of lower-income workers filing a tax return – even if your income is too low to trigger any federal tax liability – in order to potentially claim the Earned Income Tax Credit. Depending on your income, marital status and number of dependents, the EITC can deliver a refund of up to $6,318 to help achieve your financial goals.

To learn more about how you can use your federal tax refund to meet short- and long-term financial goals, contact a personal banker today by calling 800.FSB.4445 or sending an email to