Investors Community Bank's Podcast

Money Matters with Matt - March 6, 2020

March 05, 2020 ICB
Investors Community Bank's Podcast
Money Matters with Matt - March 6, 2020
Chapters
Investors Community Bank's Podcast
Money Matters with Matt - March 6, 2020
Mar 05, 2020
ICB

It's tax season and many of you will be receiving a refund. While we can't give tax advice, we can help you get the most mileage out of your refund. Today's show will teach you how. 

Show Notes Transcript

It's tax season and many of you will be receiving a refund. While we can't give tax advice, we can help you get the most mileage out of your refund. Today's show will teach you how. 

Speaker 1: And now, Investors Community Bank welcomes you to Money Matters with Matt, on
1240 Radio WOMT.

Jim:
Matt Lemke, hello.

Matt Lemke: 
Hello, Jim. How are you?

Jim: 
Good to see you. Let's talk taxes today.

Matt Lemke: 
All right.

Jim:
Not the bad thing about taxes, tax refunds.

Matt Lemke: 
Oh, the good side of taxes.

Jim: 
Yeah.

Matt Lemke: 
Not paying too much in, or, you know.

Jim: 
Well, what are we going to do if we get a big tax refund? We're just all going to go on a
big spending spree? Is that the best thing to do?

Matt Lemke: 
Well, it's not the best thing. That sounds like a lot of fun.

Jim: 
It does.

Matt Lemke: 
I think there's plenty of other ways that people can put potential returns to work. The
first one that we would advise is, if you don't have something, begin creating an
emergency fund. You should really have three to six months' living expenses set aside
for those unexpected items that come up.

Jim: 
That rainy day fund we always said we would get started. That's a good way to do it. If
you get a tax refund, just sock it away and just forget about it.

Matt Lemke: 
That's right. Now another popular one, a good use of your money, is pay off debt if you
have it. A lot of people carry some sort of credit card balance, and if you actually looked
at the numbers, you're probably paying somewhere between 18 and 25%. Even if you
don't have an emergency fund, putting that money in, earning 1% or less, is probably
not the best use, so you should really pay down some of that high interest debt first.

Jim:
Sure. That way you're not paying out the 18 or better percent of interest, so that's a
good thing.

Matt Lemke: 
That's right.

Jim:
What about your future? You can always think of your future, can't you? 
 
Matt Lemke: 
You can. It's always good to put some money away or extra money away for your
retirement. There's a lot of ways. We've talked on this show about funding a traditional
IRA or a Roth IRA. You could do that. You could find non-qualified investments, but just
setting it aside and planning for the future.

Jim:
If you're doing an IRA, then that becomes a deduction for next year's taxes.

Matt Lemke: 
That's right. Yes, absolutely.

Jim: 
So you can get a bigger refund next year. See how that works?

Matt Lemke: 
Yeah, that's the plan.

Jim: 
Yeah. What else can we do with that tax money?

Matt Lemke:
Well, a lot of people will put money away for kids, grandkids, potentially for college. So
there are tax advantaged ways to save in 529 plans and other vehicles that might be a
good use for your extra money.

Jim: 
Good, good.

Matt Lemke: 
One of the things that sometimes people overlook is investing in yourself, and what I
mean by that is, focus a little bit on your future education and your career. If you've
been wanting to go back to school or you've been wanting to get a secondary degree of
some sorts, it's always good to invest in yourself.

Jim: 
A special tool that you've been meaning to buy, to help make your job a little bit easier.
Upgrade your computer, do things like that. Get that special software. That could also
be a good investment, too.

Matt Lemke: 
It's a great idea. It's not maybe the most fun, but again, it goes to both paying down
debt and planning for your future, but you could begin pre-paying your mortgage. Work
to try and be debt-free instead of always being a slave to a monthly payment.

Jim:
Yeah, jump one or two payments ahead. That makes life easy, doesn't it?

Matt Lemke: 
Yeah, it does. At times, we've also seen people that have come in and invested not only
in themselves, but they've decided to put that as seed money to begin a business.
Maybe there's a dream that had of, I don't know, opening a little shop of some sort, or a
fabrication shop. You never know.

Jim: 
Yeah. A little dream fund is what we can call it.

Matt Lemke: 
That's right.

Jim: 
Things to do with our tax refund on Money Matters with Matt. What else could we do? 
 
Matt Lemke: 
Home improvements, always, always a great way to go. With limited supply of homes on
the market and low interest rates, now may be a good time for you to look to be
upgrading where you're at, if you can't move or find anything that you like.

Jim:
Maybe get the big picture window up in the front, in the living room. It's leaking air, or
just, it has that mist or something. One of the windows and crack. Put that in.

Matt Lemke: 
Well, yeah, and along with that, if you have to replace a furnace or do any other energy
efficient type items, that also can benefit you on next year's return.

Jim: 
Yeah. Cut down on your heating bill in the process, too.

Matt Lemke: 
That's right.

Jim: 
What about a less glamorous way of spending your money on your tax refund, or doing
something smart with it?

Matt Lemke:
Well, it's not one that people like to talk about, but if you don't have life insurance, you
may be able to begin building up some life insurance for yourself, and really not for
yourself, but for those that are left behind upon your death, and making sure that
you've got your affairs in order.

Jim: 
Those are a lot of great ideas to do something with the tax refund. I think the first one
we had, going out on a spending spree, is of funnest.

Matt Lemke: 
Yeah, I agree. Yeah, the rest are not nearly as exciting.

Jim: 
Well, Matt, as always, it's great to talk to you, but if we have questions about
establishing that dream fund, or a savings, or an IRA, or anything we talked about, it's
easy to get in touch with you and Investors Community Bank.

Matt Lemke: 
Yeah. A couple of ways you can do that. Investorscommunitybank.com. You can look
online. You could stop in any one of our four locations, we'd love to see you in person,
or feel free to give us a call.

Jim: 
Thanks, Matt.

Matt Lemke: 
Thank you.

Speaker 1: 
You've been listening to Money Matters with Matt, presented by Investors Community
Bank. Let your money work for you. To learn more, visit investorscommunitybank.com.
Don't forget to tune into Money Matters with Matt every Friday morning, here on 1240
Radio WOMT. Investors Community Bank, we promise to walk in your shoes. Member,
FDIC.