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Jeffrey A Sirak
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Tax

Financial Hacks for Millennials: Ways to Use Your Tax Refund

There are two certainties in life: death and taxes, or so it’s been said. While the thought of filing taxes may not fill you with delight, for many Americans, receiving a tax refund could be the mini financial windfall they need to get back on track with financial goals that may have gone awry during the year.

Whether you’re a millennial, or a GEN X, Y or Zer, these five actions offer a great way to start. They can help you leverage your tax return to improve your financial and emotional confidence.

1. BECOME A WORLD CLASS SAVER

After over a year of living through a global pandemic, most people realize that life can be unpredictable. To avoid accruing debt in an emergency, bolster your savings cushion.1

Financial professionals generally recommend keeping six months of expenses in savings, and you can kick-start that savings goal with your tax refund. Note that this recommendation is for a length of time — not a specific dollar amount. Why? Because everyone’s monthly expenses are different. To know the right savings amount for you, start tracking your expenses. It can be as simple as recording every purchase in a spreadsheet or finding a phone app that will do the job.

2. PROTECT YOUR INCOME: DISABILITY INSURANCE

Nobody wants to worry about an injury or an accident that will cause loss of work. But it happens. In fact, over 25 percent of today’s workers will face this situation.2 To help protect yourself against a potential loss of income, consider using part of your tax refund to purchase individual disability insurance. If you get sick or hurt and can’t work, an income protection policy can provide a portion of your income while you recover. Then you’re able to concentrate on getting better — without draining your savings and while maintaining a consistent lifestyle for you and your family. Many disability insurance plans offered through employers only cover up to 50% of your income, but could you live in half a house or drive half a car?

3. PROTECT YOUR FAMILY WITH ROOM TO GROW: WHOLE LIFE INSURANCE

Another valuable option for your tax return is whole life insurance. A whole life policy provides money to your family in the event of your premature death. Yet it can do even more. As you pay the monthly premium, the whole life policy slowly increases in cash value.3 During your lifetime, you can use this money towards major expenses, like starting a business, buying a house or funding your child’s college education.4 In this way, whole life insurance diversifies your financial portfolio and can provide a source of funds insulated from market volatility.

4. PAY DOWN HIGH-INTEREST DEBT

Notice that paying down debt is prioritized after securing savings and protecting you and your family. Of course it’s important to eliminate debt, but it’s even more critical to get out of the cycle of debt if you’re in one. Once you have savings and protection policies in place, you may not need to turn to credit cards or high-interest loans in case of emergency. Then, with these protections in place, it becomes wise to pay off any debt.

5. INVEST IN YOURSELF

You know the expression: an investment in oneself is an investment in the future. Your tax refund can provide the opportunity to act on this idea. Consider putting some of the money towards continuing education classes or a professional certification that can help increase your earnings moving forward. What skills can you learn to boost your hiring appeal? A tax refund can open new doors to learning. Or, if you’re among the many Americans feeling pandemic burnout, it’s ok to spend on self-rejuvenation too: sign up for a yoga class, invest in a personal trainer or take that long-deferred family weekend away.

This spring, some people will receive a nice little windfall from Uncle Sam. How you choose to spend it depends on your current level of savings, protection and debt, as well as your dreams for the future. A financial professional can help you decide how to distribute your income, whether it’s a one-time refund or over the course of your entire career.

Brought to you by The Guardian Network © 2021. The Guardian Life Insurance Company of America®, New York, NY

2021-122551 Exp. 6/2023

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

This website is intended for general public use. By providing this content, Park Avenue Securities LLC is not undertaking to provide investment advice or a recommendation for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial representative for guidance and information that is specific to your individual situation.

Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRASIPC. OSJ: 4150 Belden Village St NW, Suite 301, Canton OH, 44718, 330-2652600. PAS is a wholly owned subsidiary of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Sirak Financial Services is not an affiliate or subsidiary of PAS or Guardian. CA Insurance License #0F71319.

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2021-123026 Exp. 6/23