Money Saving Monday: How to maximize your tax refund
Financial expert shares four steps to turn a tax refund or bonus into real financial momentum.
PHOENIX — For many families, a tax refund is one of the largest lump-sum deposits they will see all year.
But with everyday costs like gas and groceries still climbing, financial experts warn that money can disappear quickly without a plan.
Gwendolyn Bailey knows the feeling well. As a veteran, author, and project manager for CVS Health, Bailey said this tax season felt different—more intentional.
“There’s a lot of new things that have happened in this tax season for me with regards to investments… learning how to invest, so it’s been pretty lucrative, pretty good, I would say,” she said.
When extra money hits her account, Bailey says she already has a plan waiting.
This year, her refund and a bonus arrived at the same time — and she was ready.
“They both came in at the same time, so imagine your bank account going wow! And so, I had already pre-planned joining the investment club. I had already had some ideas of what this milestone year in my life would look like moving forward as it relates to investing in my legacy,” said Bailey.
That kind of intention is exactly what Kyle Taylor preaches.
As VP and Consumer Regional Manager at BOK Financial, Taylor said extra money without a plan is money at risk.
“Have a plan in place to be able to have intention with that money,” said Taylor.
Taylor recommends a four-step framework he calls the PLAN Method:
P — Prioritize emergency preparedness.
Build a cushion so an unexpected expense does not send you back into debt.
L — Lower high-interest debt.
Chip away at balances that cost you money every month.
A — Advance long-term goals.
Think about retirement, an education fund, or saving for a home.
N — Neutralize impulse spending.
Decide ahead of time how much money is reasonable to spend on fun — so you can enjoy it without regret.
“Do you want to pay down high-interest debt? Do you want to create a savings plan for yourself, or do you have a long-term goal that you need to put some money aside for, so instead of just spending it and it disappearing, have a plan so it does not do that,” he said.
For Bailey, the PLAN Method is already a way of life. With three adult children and a grandson, where she puts her money is personal.
This year, that included joining an investment club, making home improvements, contributing to savings, doing charitable work, and throwing herself a 55th birthday party.
“Of course, home improvements are always kind of a long-term investment, but one of the new things was to join an investment club — a big chunk of funds went to that,” said Bailey. “I did some charitable work… I did throw myself a 55th birthday party and just a lot in savings.”
At the same time, Bailey encourages everyone to pay off their bills.
“Add a little bit more to your mortgage payment to cut down that interest,” she said.
And as everyday costs continue to rise, Bailey says the key is balance.
“When you’re looking at your everyday needs, gas and groceries and things like that, and how they have skyrocketed, you have to kind of balance everything else around that… and if you work hard, you play hard… but you have to make sure that everything is a balance,” said Bailey.
If you have any money-saving topics you would like 12News to look into, send your ideas to money@12news.com.
You can now watch 12News content anytime, anywhere, thanks to the 12News+ app!
The free 12News+ app from 12News lets users stream live events — including daily newscasts like “Today in AZ” and “12 News” and our daily lifestyle program, “Arizona Midday”—on Roku and Amazon Fire TV.
12News+ showcases live video throughout the day for breaking news, local news, weather and even an occasional moment of Zen showcasing breathtaking sights from across Arizona.
Users can also watch on-demand videos of top stories, local politics, I-Team investigations, Arizona-specific features and vintage videos from the 12News archives.
Roku: Add the channel from the Roku store or by searching for “12 News KPNX.”
Amazon Fire TV: Search for “12 News KPNX” to find the free 12News+ app to add to your account, or have the 12News+ app delivered directly to your Amazon Fire TV through Amazon.com or the Amazon app.
Catch up on the latest news and stories on the 12News YouTube channel. Subscribe today.
