Setting up a savings fund should be priority number one. This money can earn interest and be used for unexpected items such as car repairs, a plane ticket to visit a sick relative and urgent home repairs. If you have trouble saving, your refund is a good source of start-up funds. Higher savings balances motivate people to save more. Carrying credit card debt over from month to month can cost consumers thousands annually in interest.
Some people use overwitholding on their income tax as a method of saving throughout the year.
These people lose the benefit of earning interest on the funds. Investigate IRAs, mutual funds or bonds. Time allows for earning interest and compounding, so it is never too early to start investing in an education fund. Costs for college have increased steeply over the past decade and are expected to continue rising. Most states offer state-sponsored college tuition plans and many have tax benefits.