Spend It or Save It? What to do with your tax refund

by Wade Barnes 12. March 2012

Average Annual Tax Refund

It's that time of the year again, and if you haven’t already started working through the process of filing your taxes, now is the time.  While it likely isn’t the most favorite chore you’ll tackle this year, it might be one that pays off.  According to the IRS, the average tax refund this year is about $3,000.  Some might argue that getting a tax refund isn’t the best way to manage your money throughout the year, as you essentially gave the government an interest free loan.  Nonetheless, using your tax refund wisely can greatly benefit your financial position and might even help you get a bigger refund when you file your taxes next year.

Resist the urge to spend the money before it hits your bank account.  Most certainly avoid refund anticipation loans unless absolutely necessary to deal with an emergency, as these are expensive and might even leave you owing more money than you get back in your refund.  Consider having the money refunded via direct deposit from the IRS directly into your bank account.  Direct deposit isn’t only a safe way of receiving your money, it is also the quickest way of getting your refund from the IRS.

Once you know how much you can expect to receive in your tax refund, make a plan and consider spending the money in the following three categories to invest in your future.

Emergency Fund

Nobody wants to think that something bad might happen, but it’s always a possibility, and planning for an emergency in advance can help lessen the burden if it happens to occur.  Experts suggest you should have 3-6 months of salary tucked away in an emergency fund.  With this money in savings, you should be able to offset hardships that could come from illness, unemployment, or other unexpected events.  Another way to plan for an emergency is to stock up on nonperishable food items and household supplies that are not only good for natural disasters but can provide a source of stability if an unexpected event, such as job loss, was to occur.  While providing for an emergency isn’t a fun way of spending your tax refund, according to Maslow, by securing fundamental needs we can move on to talking about ways to maximize your full potential.

Invest in Yourself

There isn’t much in life more important than your future, so be sure to spend some money to ensure your future is strong.  Consider going back to school or taking a class that can help you learn new skills or techniques that will help advance your career and earning potential.  Attend a conference relevant to your industry – not only will you be exposed to cutting edge information, you’ll also be exposed to networking with people you may not have otherwise met.  Spend some money to update your professional wardrobe.  We all know first impressions are important, so be sure your professional attire is sharp.  Invest money in a retirement account.  Even if you love your job, the time will come when you want some time for yourself.  By investing in a retirement account, you can look ahead to life after work.

Tax Deductible Activities

Consult your tax advisor on this topic, but there are ways you can spend your tax refund that could potentially reduce your future tax burden.  Tackling home improvement projects like purchasing energy-efficient windows or doors, adding insulation, and installing energy-efficient appliances or solar panels are all good ways to improve your home and potentially lessen you tax burden.   Consider saving for or buying a house, as there are many tax benefits to being a homeowner.  Make a donation to your favorite charitable cause.  Not only will you feel good about making the donation, you’ll being doing good for the community.  Many self-investments that are career oriented might also help reduce your tax burden.  Again, consult a tax advisor to understand the details, but using your refund to improve your house, your retirement, or your community might mean less tax in the future.

While the above activities are all important, it is just as important that you treat yourself too.  Don’t blow it all on a weekend in Vegas, but make a smart plan to further your financial progress and after making smart investment decisions, do something to reward yourself as well.

Spring Forward With These 5 Energy Saving Tips

by Renee' Anderson 9. March 2012

Breakdown of Your Energy Bill

Saving energy was one of the original purposes of Daylight Savings Time. With the days being longer, it’s thought that you use less energy to light your home. Well, that’s one way to save energy in your home, but according to Energy Star, lighting generally only accounts for about 12% of your energy bill.  I don’t know about you, but I could use some other ideas! With my spring project list expanding, I would really love it if my BGE bill would lighten up ($50 off my BGE bill = $50 towards my new deck).

Here are some tips on how to save energy:

1. According to Energy Star, heating and cooling accounts for close to half of the average household’s total energy use. Keep your thermostat set at 68 degrees or lower in the winter and 78 degrees or higher in the summer to see your energy bill decrease.

2. As we finish out the winter season, open your blinds during the day to let the sun in. As the weather gets warmer, you got it – do just the opposite and keep the blinds closed.

3. Wash your clothes using cold water, and run your washing machine and dishwasher at night to take advantage of off-peak hours. Some newer dishwashers have timers that you can set to run at night.

4. Take shorter, cooler showers.  Besides saving energy, this is also a refreshing way to cool off on hot summer days.  If you can’t live without your hot showers, keep reading – we’ve got you covered.

5. Use compact fluorescent light bulbs.  While they cost a little bit more than conventional incandescent bulbs, they are a huge energy saver.  According to The Home Depot, compact fluorescent bulbs use approximately 75% less electricity than incandescent bulbs and last about ten times longer.

You can get a more detailed guide to saving energy in your home from BGE Home’s Energy Saving Center.

Be sure to click on the Energy Saving Tips link, and download this brochure.

The tip that was screaming at me? Stop waiting for warm water (before your shower, washing your hands and face, etc.). Waiting for warm water can waste thousands of gallons a year. A hot water circulator pump and timer can provide instant hot water and help reduce your overall water usage.

Looks like I need to look into one of these hot water circulator pumps!

What are you going to do to save energy in your home?

5 Mobile Banking Security Tips

by Erica Starr 16. February 2012

1st Mariner Bank Mobile BankingIt wasn't that long ago when the only way to deposit, transfer or withdraw money was to physically visit your local bank branch or ATM. Today, thanks to the wonderful world of technology, consumers have a full suite of options to choose from when conducting their financial transactions.

With online and mobile banking on the rise, it's only natural that security be on the minds of both financial institutions and customers.

So what's the deal? Is mobile banking a secure way to bank? In sort - yes. 1st Mariner's Mobile Banking solution offers the full encryption and security suite that is utilized for our traditional (desktop) online banking platform. However, as with most things, as technology gets more advanced you can never be too safe.

There are certain precautions customers should keep in mind when opting to go mobile.

1. Download the official app from your bank's website.

It's only natural to go to the iTunes store or Android Market when you are looking to get a new app. However, non-reputable people are putting apps out there everyday, for the purpose of phishing consumer information. It's always better to start with your bank's website to make sure you aren't being scammed.

2. Don't send personal information via SMS (text messaging).

Regardless of the situation, never EVER send personal information, (PIN, account numbers, social security number, passwords, etc.) via SMS. SMS is not encrypted, so your bank will not send personal information via SMS, and you could leave yourself vulnerable to phishing if you send sensitive information through this medium.

3. Avoid conducting your banking needs on public networks.

While enjoying your coffee at the local coffee shop might sound like a good time to check your account balances,you might want to think again. Most public Wi-Fi networks are not secure so always be sure to switch to a secure network (i.e. your phone's 3G or 4G data plan) before logging into your account information.

4. Take advantage of your phone's security features.

Perhaps the biggest risk associated with mobile banking is the risk of losing your phone. Almost all smart phones offer some sort of security feature that is built into the phone itself. From screen locking mechanisms to GPS locating apps (i.e. Where's my Droid or Find My iPhone), your phone offers several different ways to prevent your personal information from getting into the wrong hands. As new phones hit the market, the security features will continue to become more and more advanced (i.e., facial and fingerprint recognition).

5. Take advantage of your bank's mobile banking security offerings.

If you are considering a mobile banking app, look for one where data can be wiped from your cell phone, if you lose it. With 1st Mariner's mobile banking, users can access their account from their desktop and shut down access through their mobile phones and thus eliminate the risk of fraud.

Still not sure if you are comfortable taking your banking mobile? That's okay - we commend you for being overcautious when it comes to your finances. We are too! That's why we're here to walk you through the ins and outs of our mobile banking services and answer any questions that you have. You'll see for yourself just how secure mobile banking really is.

Answer our Facebook Question of the Week.

Are you using a mobile banking solution? How so? Feel free to leave some commentary on our wall as to why or why not.

 

If you found this article helpful, be sure to check out these related articles:

Top Three Myths About Online Banking Revealed

It's 11:00 p.m. Do You Know Where Your Money Is?

I'll Take "What is Check Fraud" for 500, Alex



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