NORFOLK, Va. — As the tax deadline arrives, Smart Shopper, Trae Bodge offers tips for wisely using any potential refund — from high-yield savings accounts to educational investments, here's how to plan smartly.
While it can be tempting to spend that money on frivolous products, Bodge suggests making more fiscally responsible choices.
Watch: Tax season made easier with free local help
Whether the refund is $1,000 or $50, consider opening a high-yield savings account. Bodge notes that most banks offer an average interest rate ranging from 4% to 4.6%.
However, there are things to consider with a high-yield savings account as they often have variable interest rates and limitations on withdrawals. Just make sure you read the fine print when choosing an account.
Watch related coverage: Seniors in Suffolk join fight against scams, share tips to stay safe
“With this kind of topsy-turvy economy right now, it’s really important to have a little bit of a nest egg,” Bodge said. “Starting smaller and being consistent is better than not doing it at all.”
Bodge recommends "Bread Financial," but advises exploring local credit unions, or checking with your bank about specific savings perks.
In addition to saving, Bodge encourages homeowners to assess their property for expensive items that may need replacing soon. With fluctuating tariffs and prices, having a plan in place is crucial.
Watch related coverage: Tariffs impact on U.S. consumers and global trade dynamics
“For example, if your dishwasher is kind of on its last legs, it might be a good time to take a little bit of your tax return and put that towards a new dishwasher,” she added.
If you have children, consider investing in a 529 education savings account. This type of savings plan is specifically designed for education expenses, such as those related to traditional universities and trade schools, and offers tax advantages.
As a final reminder, Tuesday, April 15 is the tax filing deadline.
If you need additional time, the IRS allows you to request an extension, but it must be done by April 15. An extension grants you until October 15 to file.
