Bensman Risk Management, Inc.


Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS). Kestra IS and Kestra AS are not affiliated with The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C.

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Insurable Interests

Vol. 6, Issue 6February 2011

FINANCIAL INTERESTS

What To Do With Your Tax Refund

You filed your taxes, and it turns out you overpaid and you are getting a nice refund. What are the best uses for this welcome windfall? You should talk to your financial adviser about what might be best in your particular situation. In general, though, there are several options.

You can use it to pay down debt. Think first of high-interest debt such as credit card balances. The interest rate on some cards can cripple your efforts to get control of your financial life. Start with the highest-interest debt first, and work your way down.

Build up your emergency savings. Many people end up with credit card debt because they don’t have an emergency fund so they have to turn to credit when unexpected expenses arise. You should have several thousand dollars that you can get at in a hurry if you need it. Talk to your financial adviser about exactly how much you need and where you should stash it.

If you don’t have any debt and if your emergency fund already is adequate, consider using some of your refund to fund the future. If you have children or grandchildren, you can start or add to a college fund. There are several options for college saving, including some that have tax advantages. If your child is a long way from college age, you can let the compounding value of time work for you. If college is just around the corner, you need to build up your college fund fast.

You can use some of the money to pay off your mortgage faster, which can save you money in the long run. This might be especially attractive if you are nearing retirement and want to retire with as small a mortgage as possible -- or none at all. If you are planning to sell your house in the near future, make some needed improvements or just spruce the place up a little.

Add to your retirement plan, whether retirement is decades away or coming at you fast. If you already are retired, add to your savings as a hedge against unexpected expenses.

You can use the money to do good. Celebrate your good fortune by making a contribution to your favorite charity or helping a friend or loved one with expenses.

And after you have found sound and practical uses for almost all your refund, treat yourself to a nice dinner or some other type of celebration.

Finally, especially if your refund was large, consider whether you need to adjust your withholding so that you get to keep more of your money throughout the year and let it go to work for you instead of for Uncle Sam.

This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.

Photo: iStockphoto.com

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