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 

Weinberg House Renovation Brings New Life to Senior Living

By Vickie Mills • June 2, 2026
Exciting, the final renovations of the last two units are underway at Weinberg House, a long-standing affordable senior living community in Fredrick, Maryland. Originally built in 1994, the property provided safe, stable housing for older adults for decades. Renovations began on May 1, 2023. At that time, they had a total of 23 units to renovate. The renovations included freshly painted walls, new carpet in the bedrooms, new flooring in the other rooms, new cabinets in the bathroom, as well as new kitchen cupboards, fixtures and new appliances. The final two units will be ready for lease up June 15, 2026. The renovation of Weinberg House represents a meaningful investment in both people and place. By modernizing the property while protecting its mission, this project will help ensure that affordable, welcoming housing remains available for seniors for years to come. It is an encouraging example of how thoughtful redevelopment can strengthen communities and honor the residents who call them home.

Interfaith Housing Alliance (IHA) is proud to announce three funding awards during the last quarter from our community partners.

By Rachel Gardner • June 2, 2026
In March 2026, IHA was awarded a $50,000 grant through the Frederick County Government’s Helping Empower Area Resources Together (HEART). These one-time operational funds were awarded to mitigate the effects of the longest federal government shutdown in history. This grant has allowed IHA to continue providing essential programs and services to Frederick County residents despite challenges at the federal level. IHA was also awarded a $5,000 grant from the City of Frederick through the Community Promotion Grant program. This grant supports aging in place and youth development needs among City residents through IHA’s Supportive Services. The program serves residents of IHA’s senior and multi-family affordable rental communities at 222 Broadway Street (Weinberg House) and 520 N. Market Street, respectively. In April 2026, IHA was also awarded a $25,000 Community Partnership Grant from Frederick County Government. This grant supports IHA’s full range of Financial Dignity and Empowerment Services, including our homeownership and financial education programming. IHA’s Purchase-Repair Program provides an avenue to homeownership for those who otherwise would not qualify for a traditional home loan. In Credit Café, participants work specifically on improving their credit. Financial Freedom Bootcamp helps participants improve their skills in budgeting, saving, debt reduction, and financial goal setting. The Frederick Affordable Housing Incubator (FAHI) brings multiple sectors together to increase the affordable housing inventory in Frederick County.

36 Years of Building Stability, Opportunity, and Hope

By Lacy Ames • June 2, 2026
For 36 years, the Interfaith Housing Alliance has stood beside individuals and families as they navigate some of life’s most difficult moments. What began as a mission rooted in compassion and community partnership has grown into an organization that continues to make a lasting impact across our region, helping families find stability, build financial confidence, and create brighter futures. As we celebrate this milestone anniversary, we are not only reflecting on where we have been, but also recognizing the incredible growth, resilience, and innovation that continue to shape IHA today. Over the past 36 years, IHA has evolved to meet the changing needs of the community while remaining committed to the same core belief: everyone deserves access to safe housing, financial education, and the opportunity to thrive. Through housing counseling, financial education workshops, community partnerships, and affordable housing initiatives, IHA has empowered thousands of individuals and families with the tools, support, and stability needed to move forward with confidence. Beyond education and counseling services, IHA’s long-standing commitment to affordable housing development has helped create lasting impact throughout the community. Over the years, IHA has developed, built, and managed affordable housing units that have provided safe, stable homes for countless individuals and families. These housing initiatives represent more than buildings, they represent opportunity, dignity, and the foundation for stronger futures. The growth and preservation of affordable housing remains a vital part of IHA’s legacy and ongoing mission. Behind every program, every workshop, and every success story is a community of people who believe in the work we do. Our staff, volunteers, donors, partners, and supporters have played an essential role in helping IHA grow over the last three and a half decades. Their dedication and belief in our mission continue to fuel the impact we are able to make every day. Most importantly, we celebrate the individuals and families who have trusted IHA to be part of their journey. Every financial goal reached, every housing challenge overcome, and every moment of renewed confidence is a reminder of why this work matters. As we look ahead, we remain focused on continuing to innovate, educate, and advocate for stronger communities. The need for affordable housing resources and financial empowerment remains as important as ever, and IHA is committed to meeting that need with the same compassion and determination that has defined the organization for the past 36 years.  Thank you for being part of the Interfaith Housing Alliance story. Together, we celebrate 36 years of impact and look forward to the many more lives we will continue to support in the years ahead.
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