Four Ways to Put Your Tax Refund to Work

Tax season is upon us. The filing deadline is not too far away, and some Americans have already received their refund. With an average refund of $3,000, you may be looking for some ideas on how to use that cash and make a smart investment at the same time.

By Cummins Inc., Global Power Technology Leader

Calculator with small house on a table

Here are 4 ways you can put your tax refund to work for you:

Pay Off a Small Debt

Put your tax refund toward paying off a high-interest credit card. Start with the credit card that has the highest interest rate. Doing so will save you much more money in the long run. If you have already paid off your credit card debt, think about making an extra payment on your school loans, car payment or mortgage.

College Fund

Thinking about booking a big vacation? Consider smaller day or weekend trips for the family and invest surplus cash in a fund for future education. Look into 529 plans and Coverdell Education Accounts; these investments offer potential tax benefits as well. Saving for your children's college education now reduces the chances your kids will face heavy student loan debt down the road.

Retirement Savings

As tempting as it may be to purchase that brand new 80+ inch curved TV, consider making small adjustments in your savings plans that will reap huge benefits later. Increase contributions to your 401K plans and take advantage of the matching opportunities your employer has in place. If you already invest in a 401K, think about contributing to an IRA or Roth IRA account.

Home Improvements

Small investments to your home can increase its value tenfold. With the wide range of improvements you may be thinking about – from a new tile backsplash to a new garage door, consider investing your refund in a home standby generator. In fact, the return on installing a standby generator is even greater than adding a bathroom!* Power outages can strike at any time and standby power means immediate restoration of electricity to your home. Cummins home standby generators are safe, permanent backup solutions for your home. Connected to your home’s gas line, they automatically turn on the moment an outage strikes and run powerfully, quietly and efficiently until the outage is over. They’re simply the best choice for backing up your home and ensuring your peace of mind. Use our personalized calculator to determine your unique power needs.

For more home improvement tips, check out smart home expert Eric Murrell’s suggestions to improve your home. And be sure to sign up for the Cummins Home Generators newsletter to get valuable resources to help your family weather the storm, safely and comfortably while saving money.”

Author Profiles

Cummins Office Building

Cummins Inc., Global Power Technology Leader

Cummins Inc., a global power solutions leader, comprises five business segments – Components, Engine, Distribution, Power Systems, and Accelera by Cummins – supported by its global manufacturing and extensive service and support network, skilled workforce and vast technological expertise. Cummins is committed to its Destination Zero strategy – the company’s commitment to sustainability and helping its customers successfully navigate the energy transition with its broad portfolio of products. Cummins has approximately 69,900 employees and earned $3.9 billion on sales of $34.1 billion in 2024. See how Cummins is leading the world toward a future of smarter, cleaner power at www.cummins.com.

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