As we receive our refunds along with additional benefits, First Northern Bank has highlighted seven tips to help them use their money wisely.

• Save for emergencies.  More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
  
  
• Pay off debt.  Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  
  
• Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. We can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account. Click here for more information about others options to save for future expenses.
  
  
• 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 loans. Be sure to inform your lender that your extra payments should be applied to 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 your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  
  
• Invest in your current home.  Use your refund to invest in 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 pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program).
  
  
• Donate to charity.  The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.

It is important to file 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 (EITC).  Depending on a recipient’s income, marital status and number of children, the EITC refund to help them achieve financial goals. Make sure to utilize our tools to help you save.