LendingTree.com Shares Five Smart Things to Do with Your Tax Refund

Released  April 11, 2007
By Megan Greuling

CHAROTTE, N.C., April 11, 2007 – Dreaming of a new TV or a shopping spree? Instead, use your tax refund for the benefit of your financial well-being instead. Depending on the size of your refund and your financial situation, consider the following smart uses for your refund.

1. Get rid of your credit card debt. Before you go spend your refund, consider paying off money you’ve already spent on your plastic. Credit card debt can cost you the most when it comes to interest rate charges. Getting rid of some of your outstanding balances can have a big impact on your pocketbook so consider starting here first.

2. Establish a rainy day fund. Though we don’t like to imagine them, unexpected emergencies – a child’s or parent’s illness, loss of a job, or a serious accident – can cause a major drain on your bank account. It’s a good idea to keep a buffer of about three month’s salary, just in case. If you’ve already got an account for this purpose, start a fund for other big ticket investments: child’s college tuition, for instance, or a down payment on an investment property. Stashing this money away in a CD or High-Yield Savings Account ensures the money doesn’t get spent, and has the added benefit of earning interest.

3. Fund a home improvement. Been putting off getting that leak fixed? Fund costly repairs or maintenance to your home like a new furnace, plumbing or electrical work. For larger renovations – like a new roof, kitchen remodel or home addition – combine your tax refund with a home equity loan or line of credit. Home improvements are an excellent way to increase the equity in your home, money you’ll almost always get back out when you sell.

4. Invest. Put that refund to work, earning more money. Invest in a Certificate of Deposit (CD), Money Market Account or High-Yield Savings Account and start earning between 4-5% interest. You might also consider an investment account – either a standard account for trading stocks and bonds, or an Investment Retirement Account (IRA). You can usually deduct IRA contributions on your tax return, and there are many no-cost funds to choose from, through just about any investment institution or bank. Of course, be sure to consult your tax advisor to be sure of any tax implications.

5. Get ahead on your mortgage. Plan to be in your house for a while? Consider paying down your mortgage balance. The more you pay down on your principal, the less you pay in interest over time, which will reduce your monthly payment and equals substantial savings in the long term.

About LendingTree, LLC

LendingTree, LLC is the nation’s number one online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 20 million loan requests and $152 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, credit cards and high-yield savings accounts via www.lendingtree.com and 800-555-TREE.

Launched in 1998 with headquarters in Charlotte, North Carolina, LendingTree, LLC is part of IAC Financial Services and Real Estate, an operating company of IAC (NASDAQ: IACI), which also owns or operates LendingTree Loans sm, LendingTree Settlement Services, LLC, GetSmart®, RealEstate.comsm, Domania®, and iNest Realty, Inc.