Planning for Financial Success: Spending (Your Tax Refund) Wisely

Lacy Ames • February 28, 2023

Planning for Future Financial Success:

Spending (Your Tax Refund) Wisely

April is National Financial Literacy Month!

This is a fantastic reminder to check in on our financial situation and enhance our skills. April is also the perfect time to discuss finances as it overlaps with the tax season and many individuals receive a tax refund. Are you unsure what to do with those extra dollars you are receiving? Then look no further. Below you will find some helpful tips/suggestions on planning for future financial success through spending wisely. 

 

IHA will be hosting the first of a three-part webinar series in April to discuss this topic in further detail.  Please read to the end to see how to sign up for this free resource! 

 

Reducing Debts 

The first place to consider spending your tax refund wisely is to pay down your debts, especially credit card balances.  Credit card interest rates have been climbing quickly over the past year and reducing these expenses could result in easier and faster savings for future financial goals or to establish an emergency savings account.  High credit card balances have a negative impact on your credit score. Lowering your credit card balances to 30% or less of your total credit limit will improve your credit score. Having a better credit score could open many more opportunities for you in the future, whether it’s being qualified to rent an apartment or being eligible for the best interest rate on a loan. The quickest way to see all your credit card debts in one place is to pull a copy of your credit report. There are free options online, or you could attend an IHA Credit Café Workshop for free too. 

   

Trying to pay off debt can be overwhelming, but there are strategies that can help. There are two well-known approaches to reducing your debt known as the ‘snowball method’ and the ‘avalanche method’ which each have their own set of pros and cons. One isn’t any better than the other, so you will want to review each method to see which one would better motivate you to reduce your debts.   

  • Snowball Method – This method is where you start by paying off the smallest of your balances as quickly as possible. Then with that bill paid off, you can use the money you were spending on that bill and put it towards the credit card that now has the smallest balance. You would continue this process until all your credit cards are paid off. This method may provide quicker successes with paying off the smaller balances early, while waiting to tackle the bigger ones. This sense of accomplishment might be the motivation you need to keep going.   
  • Avalanche Method - This method would require you to know the account balances and their associated interest rates. The first account you would pay off would be the one with the highest interest rate, regardless of the amount you owe. Like the snowball method, once that account is paid off, you would move onto the account with the next highest interest rate. This method should help you pay less overtime since you address the higher interest rates, however if the account with the highest interest rate is also your highest balance, it may take longer to see results and feel that sense of accomplishment.   

 

Establishing Credit 

Maybe you don’t have credit card debt, which is great, but if the reason is because you don’t have any credit cards, you may want to set aside about $500-$600 of your tax refund to establish new credit.  We recommend doing this for two reasons – having and managing your current credit properly are the best and easiest ways to increase your credit score!  And, as mentioned above, a good credit score can open doors to financial opportunities.  Plus, having some available credit can be a lifesaver when unexpected emergencies occur. 

There are two secured credit card offers out there specifically designed to help establish and build credit and they don’t charge an annual fee: 

https://www.discover.com/credit-cards/secured/ 

https://www.capitalone.com/credit-cards/platinum-secured/ 

 

If you manage these cards wisely, they will become unsecured after 6-12 months and then you can put the deposit you were required to make initially into your future goals or emergency savings. 

It is important not use these cards if at all possible (except for the first small purchase that you make to ensure they are active) because they will have very high interest rates.  Remember, you are getting these cards to establish credit – not to use credit! 

 

Eliminate Bank Fees 

If you are currently paying bank fees because you haven’t met the minimum deposit or balance requirement, and you don’t want to switch to another bank, use a portion of your tax refund to meet the deposit requirement.  I know $5 a month doesn’t seem like much, but it is essentially money thrown away.  If you dropped a $5 bill you wouldn’t just walk on by, would you? 

 

Buy in Bulk 

If you tend to live paycheck to paycheck and only have enough cash on hand to buy what you need for the week, set aside a portion of your tax refund to help you get out of that cycle. 

You are probably already aware that not everything you need from the grocery store is on sale every week.  You also know how seldom you see something you do need regularly available at a highly discounted price.  By adding a cushion to your grocery budget, you can stock up on sale items! 


For example, let’s talk about facial tissues.  My 2-person household uses 100 tissues per week.  Typically, that box of tissues runs at least $3.00 at the grocery store.  However, every once in a while, the same box sells for $1.25 – 4 boxes for $5.00.  I can buy an entire year’s worth of tissues for $65 – a $91 savings! 


There are lots of products that lend themselves very well to bulk purchasing.  Another frequently purchased product instantly comes to mind.  Canned soup!  I can pay $2.79 per can when not on sale, or I can buy in bulk when on sale for just 99c a can.   

If you put $1,200 of your tax refund aside to spend on regularly purchased products when they go on sale, you can easily turn that $1,200 into a $3,600 savings on groceries over the course of a year.  The trick is finding places to stash your purchases. 


Plan (and Pay) for a Vacation 

We all deserve at least one vacation a year, right?  But, when money is tight, your vacation may turn into a staycation, or even worse, get postponed another year. 


That tax refund could be your literal ticket to someplace else you have always wanted to visit and for less than paying for your vacation by using credit. 


By earmarking a specific dollar amount for vacation and then taking the time to research and plan for your trip – you can enjoy your getaway.  In fact, you will probably enjoy it even more because you know it is all bought and paid for up front! 


With credit rates averaging 20%, a $3,000 vacation could easily end up costing you $375 more dollars in interest, assuming you are paying 1/12 per month ($250) to pay it back.  And, it will take 15 months to pay it back, not 12. 


Plus, by doing this now, assuming you have been budgeting for an annual vacation, you can now do it every year because next year you will have saved the money you would have been paying every month to pay off that vacation. 


"An investment in knowledge pays the best interest."

- Benjamin Franklin


As we mentioned earlier, we will be offering a webinar in April (the first of three planned for 2023) to help you with Planning for Future Financial Success. Please visit https://www.interfaithhousing.org/Financial-Literacy-Webinar-Series to register! 

 

You can also take advantage of the workshops and financial education programs we offer right now.  For more information, please visit https://www.interfaithhousing.org/programs 



Volunteer Spotlight

By Vickie Mills • March 4, 2026
Veridian Capital Partners Brightens Weinberg House with Hands-On Volunteer Work On Friday February 20, 2026, the team from Veridian Capital Partners, led by founding partners Brian Runkles, CFP, Chandru Ramachandran, CFP, and Brian Williamson, CFP, brought a splash of color—and a lot of heart—to Weinberg House. The group dedicated their time and resources to repaint the hallway rails and residents’ doors, transforming the spaces leading into each apartment. Built in 1995, Weinberg House has long been a warm and supportive home for its residents. The recent makeover not only lifted the spirits of the IHA staff and residents, but also gave the building a refreshed, welcoming appearance that reflects the care and community within its walls. “It’s incredible to see the space come alive with new color, and the joy it brings to our residents is priceless,” said a member of the Weinberg House staff. Thanks to the generosity and hands-on effort of Veridian Capital Partners, Weinberg House is now brighter, more inviting, and a testament to the power of community collaboration.

Unity Campaign 2026

By Lacy Ames • March 4, 2026
Stronger Credit. Stronger Families. Stronger Frederick. The 2026 Unity Campaign & IHA’s Credit Café Interfaith Housing Alliance (IHA) is proud to participate in the 2026 Unity Campaign for Frederick County. What is the Unity Campaign? The Unity Campaign is Frederick County’s annual, fully online giving event that brings together local nonprofits, sponsors, and community members for one powerful purpose: strengthening our community together. Every dollar you donate goes directly to the nonprofit of your choice — and we hope you’ll choose Interfaith Housing Alliance. Why Your Support Matters All nonprofits participating in the Unity Campaign serve ALICE households. ALICE (Asset Limited, Income Constrained, Employed) families earn above the Federal Poverty Level, yet still struggle to afford basic necessities like housing, childcare, transportation, food, and healthcare. In Frederick County, 36% of households fall into the ALICE category. That means more than one in three families in our community are working hard — but still living on the financial edge. It could be your neighbor. Your coworker. Your child’s coach. Your family member. Your donation helps create stability where it’s needed most. Where Your Donation Goes: The Credit Café Workshop Unity Campaign donations directly support IHA’s Credit Café Workshop — a completely free program designed to help individuals build stronger credit and greater financial confidence. Just $94.10 covers the cost of two credit reports for one participant. That one step can open the door to: Safer housing Lower interest rates Reliable transportation Better employment opportunities Credit impacts nearly every major financial decision — from renting an apartment to turning on utilities. When someone improves their credit, they improve their future. How the Credit Café Works The program combines education, personalized strategy, and continued support. Step 1: Group Education Participants attend a one-hour virtual workshop offered multiple times each month. They learn: How credit scores work What impacts their score How to build or repair credit Smart financial habits for long-term stability Step 2: One-on-One Advising Within one week, participants meet virtually with an advisor for a personalized 30-minute session. They receive: A free tri-merged credit report (pulled the day of the session) Help understanding their report A customized action plan with realistic credit goals Step 3: Continued Support Participants don’t navigate the process alone. Advisors follow up at 3 and 6 months (by text, email, or phone — participant’s choice) to check progress and provide guidance. They’re also invited back for: A second advising session An updated credit report The program is currently 100% virtual, with expanding hybrid options. Interpretation services are available at no cost in more than 240 languages. How to Donate There are two easy ways to support IHA through the 2026 Unity Campaign: Visit the campaign donation page and select Interfaith Housing Alliance: https://fundraise.givesmart.com/vf/UnityFC26/team/InterfaithHousing 2. Text the campaign code to donate directly: UnityFC2661 to 71777  Every gift makes a measurable impact. Not Able to Donate? You can still make a difference. Share this campaign. Talk about it. Spread the word. Community awareness fuels community change. Interested in the Credit Café Workshop? Contact Lacy Allen Email: lames@interfaithhousing.org Text: 301-818-5606 Together, we can build stronger credit, stronger families, and a stronger Frederick.

Spring Grant Updates 2026

By Rachel Gardner • March 4, 2026
Interfaith Housing Alliance (IHA) is proud to announce 12 funding awards totaling more than $333k during the last two quarters from our community partners. In September 2025, IHA was awarded two grants that will support the organization’s Financial Dignity and Empowerment Services. IHA received a $30,000 grant from the Maryland Department of Housing and Community Development’s (DHCD) Maryland Housing Counseling Fund (MHCF). IHA also received a $10,000 grant from Truist Financial Corporation. These grants will support the full spectrum of community programming we offer, including: group educational workshops on financial health; individualized financial coaching and housing counseling; and pathways to homeownership. In October 2025, IHA received a $125,000 grant from Morgan Stanley. This grant supports IHA in its ongoing quest to create and provide affordable housing opportunities for LMI community members. It also allows IHA to continue supporting community members through our Financial Dignity and Empowerment Services.. IHA was also awarded a grant by the Ausherman Family Foundation. This 2:1 matching grant will match up to $30,000 in donations raised from community members and IHA’s Board of Directors during the organization's 2025-2026 annual appeal. Funds will support the full range of IHA’s services and programming. In November 2025 and January 2026, IHA was awarded a total allocation of $45,000 in State tax credits through the Community Investment Tax Credit (CITC) Program of Maryland’s DHCD. Donors who make contributions of $500 or more to IHA in support of our mission are eligible to earn tax credits equal to 50% of the value of the money, goods, or real property contribution. These tax credits are in addition to the deductions on both Federal and State taxes as a result of the charitable contribution. In November 2025, IHA was awarded a $20,000 grant from Delaplaine Foundation, Inc. This grant supports three of IHA’s programs: Credit Café; Financial Freedom Bootcamp; and the Frederick Affordable Homeownership Incubator (FAHI). Credit Café participants work specifically on improving their credit. Financial Freedom Bootcamp builds critical foundational skills for financial success. FAHI is a new program in the planning phase that takes a multisectoral approach to affordable housing. IHA also received two funding awards in support of its Credit Café program. IHA’s $10,000 application to participate in United Way of Frederick County’s Annual Unity Campaign was approved. This approval enables IHA to participate in the Spring 2026 Unity Campaign alongside other local nonprofit organizations to collectively raise funds in the Frederick County community. IHA also received a $1,500 Community Grant from the Rotary Club of Carroll Creek (RCCC). Credit Café promotes financial stability among LMI households through group credit education and free, individualized credit advising. Participants partner with a financial coach to create a strategic plan to either build, boost, or improve their report. In addition, IHA received a $1,518.91 designated grant from The PNC Homeownership Fund of The Community Foundation of Frederick County. These pass-through funds will directly support low- to moderate-income (LMI) households in achieving homeownership in Frederick County. In December 2025, IHA was awarded a $55,676 grant from the Maryland Affordable Housing Trust (MAHT). This grant supports the rehabilitation of IHA’s Weinberg House. This 23-unit affordable rental community in Frederick, MD was originally built in 1994 and houses senior members of our community ages 62 and older with very low to moderate income. The rehabilitation project includes upgrades to heating, appliances, plumbing, drywall, flooring, lighting, cabinets, and countertops. IHA also received a $5,000 donor-advised grant from The Nicholson Family Fund of Morgan Stanley. These unrestricted funds will support all of IHA’s endeavors in strengthening the communities we serve.
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