Get SMART about Your Tax Refund This Year

By Lauren Chaplin, AFC® Candidate, FINRA Foundation Fellow

Tax Day (April 18) is just weeks away. If you’re getting a tax refund—due to overpaying in taxes, refundable tax credits, or perhaps a deployment in 2016—setting SMART goals for your money will help you make the most out of the cash back.

How to set a SMART goal

A SMART goal means that it is:

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Time Bound

To set a SMART goal for your tax refund, decide on a specific goal that has a deadline and is reachable. An example could be to save “x” amount of money as soon as you receive your tax refund.

Before receiving the return, do your homework and figure out where to put this money. Do you want to open a savings bond? Do you want to buy a certificate of deposit, or CD? Whatever goal you decide, find the most profitable path for your money. Compare CDs and money market accounts at bankrate.com.

Once you know how much your tax refund will be, you can complete this goal or reevaluate it. If you have to reevaluate it, be sure to discuss the next steps with your spouse and set another SMART goal together.

My husband and I recently decided to get the most out of our tax refund by setting three different types of SMART goals: One for saving, one for paying down debt and one for treating ourselves.

When to focus on one goal
Sure, it would be nice to put a little bit of money into the three types of categories I described above, but there are times when you may need to focus on just one goal. Was the year a bit challenging with a move, unforeseen medical expense or emergency purchase? If so, then you may want to focus your goal on paying off that debt or replenishing your own emergency fund.

Perhaps now is the time to take some much-needed family time, something you may go without for long periods of time in the military. If this is the case, you could consider using your return towards a family vacation or staycation.

Be sure to plan it out and prepare as best as you can! This past year, our family used our return towards a trip to Walt Disney World. We knew we weren’t going to have a change in duty station, and we knew just when my husband was going to have some down time. So, we took advantage of that and had a wonderful family vacation.

Remember, if you’re expecting a tax refund for 2016, consider saving a portion of it with SaveYourRefund towards your SMART goals and be entered for a chance to win up to $25,000 in cash prizes! For more information, visit saveyourrefund.com

Take the Military Saves Pledge today and start setting your SMART goal(s). Whatever your goals are—saving for an emergency fund or a large purchase—allow your tax return to help you get started. Be SMART! Set a goal, make a plan, save automatically.

Tip of the Day

  • Written by Tammy G. Bruzon | February 3, 2017

    Savers with a plan are 2x more likely to save for #retirement, have emergency savings, and stick to a budget - @MilitarySaves #MSW2017

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