Ways to Use Your Tax Refund While Recovering From the Pandemic
Many South Carolinians are still feeling the financial impact of the pandemic. Use these tips to take simple steps toward financial stability with your tax refund.
Whether it is to buy extra groceries for your family, pay an emergency expense, or catch up on overdue bills, getting a tax refund will bring a necessary financial boost to many South Carolinians. We know this year has been hard. Sometimes the only thing you can do with a return is get caught up on bills, which is always an excellent choice to start a financial recovery journey. Once you are caught up on bills, consider these tips for creating a healthy financial situation for yourself and your family.
Pay Off a Debt
About 80% of adults over the age of 18 are in debt because of home mortgages, credit cards, car loans, and student loans. Other common forms of debt include consolidation loans, cash advance loans, and payday loans. If high debt is something that you are struggling with, consider putting your tax return toward paying it down.
Paying off a high interest debt or even setting up a plan to start paying it down can be a terrific way to reduce your monthly bills long term. For example, paying off a high interest credit card debt could save you thousands of dollars compared to paying the monthly minimum.
Start or Extend Your Emergency Fund
An emergency savings fund is money that you set aside for unexpected and necessary expenses. You don’t use this money for any other purpose but emergencies. The recommended amount to keep in your emergency savings is $1000. For security, set up an account at a local bank. This emergency savings fund provides a cushion for unexpected surprises such as medical emergencies or car repairs. Set aside a comfortable amount of money for your emergency fund and gradually add more over time. If you feel tempted to pull from your savings for non-emergencies, set up an emergency fund at a separate bank.
Save for a Trip
You may not have seen your family members in over a year. Save some money and take time to reconnect with family members and loved ones. Create a plan to regularly set aside money for your trip. If possible, consider driving instead of flying. Also, try staying with a family member or friend versus booking a hotel for extra savings.
Invest in a Wholesale Club Membership
Do you have specific items that you are constantly replacing for your family such as baby wipes, snack foods, sports drinks, or paper products?
Consider investing in a wholesale club membership such as Sam’s Club or Costco. They offer annual membership plans that give you access to bulk discounts all year. Purchasing wholesale bulk items, like your kid’s favorite fruit snacks, can keep your pantry stocked longer and put a little extra savings in your pocket.
Invest in Your Education or Professional Development
Do some research on local training programs. They could be a great investment for your professional goals. For example, many technical schools offer continuing education programs. You can earn a certificate online or by taking evening classes. Funding any professional development with your tax return is a smart investment that can lead to greater job stability in the future.
Extend Your Funds
There are various assistance programs available that can extend your monthly funds if eligible.
- SNAP, or the Supplemental Nutrition Assistance Program, is a federal and state nutrition program that helps you stretch your grocery budget. SNAP allows you to buy healthy food at grocery stores, convenience stores, some farmers markets, and other places across the state.
- TANF, or Temporary Assistance for Needy Families, is a federal program that offers aid to families with dependent children. It provides monthly financial payments as well as other services like childcare, transportation, or work-related expenses.
- Welvista is a nonprofit organization that provides free prescription medications to people that are uninsured through their Medication Assistance Program. They also provide dental services to children. This program may be a great solution if you need prescription assistance.
- Medicaid is a health insurance program that helps pay medical bills for eligible individuals or families with low-income. This program can help cover costly medical expenses and care. People of all ages can apply for Medicaid anytime during the year.
You can apply for SNAP, TANF, Welvista Medication Assistance Program, Medicaid and more through our Contact Center at 800.726.8774. Give us a call to learn more Monday-Friday from 8:30 AM – 5:00 PM.
Interested in More Financial Wellness Information?
SC Thrive offers free online financial trainings to the public. You can log in from home or wherever you have internet access. We discuss credit, savings, establishing a spending plan, and more.
In this engaging training, you will receive a digital workbook that allows you to take notes and problem solve through real world financial experiences. It is also a great reference to save for later review. To find our upcoming financial trainings and register, click HERE.
South Carolina may have a long way to go until we are fully recovered from the impact of the pandemic financially, but it is never too early to start taking steps towards stability.