Spend your tax refund wisely

Tools

Reporter - Kathryn DiGisi

CARTERVILL, Ill. - Whether you have already gotten your tax return or you are still waiting for it, you want to know how to use that money to its fullest.

Financial expert, David England, explained his method to Local 6.

He calls it the 'Rule of Thirds.'

Here is the good news: England says the 'Rule of Thirds' does not mean you have to deprive yourself of a vacation or a shiny new toy.  It just means you should not blow all of it.

"Take a third of it, pay off some debt. Especially the high interest stuff. Take some of that and go out and enjoy some things. And the other third of that, invest it," said England.

But the word 'invest' can be intimidating.

England says people are scared to invest because they either do not understand the market or they are fearful of another financial collapse.

"They saw what happened in the market in 2000 and also in 2007 and that's one thing they don't want to experience again," said England.

So, here's what some of your neighbors are doing with their refund:

"Our youngest daughter's getting married in July, so that's where whatever is left of it will go after we pay the accountant," said Tom Anderson of Marion.

"I put some in retirement and a trip for vacation this year over Memorial Day weekend," said Jonathan Waggoner of Marion.

England cannot shake his head at that.

What he will advise against is something called 'Day-Trading,'

It is similar to gambling and England says it is the last thing you should be doing with your refund.

"Going in and buy the market just thinking and hoping it's going to go up. You have no business entering into the market until you do your research and homework," said England.

England says the stock market can be an incredible tool, as long as you have studied up.

 

 

 

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