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Transcript of Using Your Tax Refund Wisely Video


Interviewer: So while you're waiting for your refund check from Uncle Sammy, maybe dreaming of a new pair of shoes or maybe new floors for your kitchen, but we're talking about how that money can actually help you make more money. We're chatting live with financial expert Matthew Stout, President and CEO of Stout Joyce out of Camp Hill. Good morning. How are you?

Matthew: Doing very well, thank you.

Interviewer: Well, thanks so much for coming in. Let's start first. Lots of us are gonna be getting those checks in the mail if you haven't gotten them already from the IRS, what should we do with that tax refund?

Matthew: That's a great question, and I think the first question should be is if you're consistently getting that refund, maybe you want to talk with a tax professional and have your withholding changed so that you get more in your paycheck every week. Everybody can kind of use that for their budget. But I think a lot of people are looking forward to having this refund, and one of the initial reactions is, "I'm going to get something nice for myself, going to reward myself."

There's still other people who say, "Hey, let's save this for a rainy day. There may be some emergencies." I think there's a healthy mix between the two of them. Take a small portion of that and buy something nice for yourself now to kind of treat yourself, but the bulk of that, let's make wise financial decisions to help yourself and your family, not just now but for years down the road.

Interviewer: Okay, so we should invest this money, or it's worth thinking about investing it.

Matthew: I think we should, number one, make sure we have an appropriate amount of emergency reserves, a rainy day fund, if you will. Aside from that, let's take a look at some of the debts we have, high interest credit card debts. If you can retire some of those, put more cash into your pocket on a weekly basis, then you set yourself up for a long-term investment plan, which makes a lot of sense.

Interviewer: Okay, so when we're getting those checks back, how much money would we need in order to invest, to make it worth our while?

Matthew: You know, not much. You could start a lot of investments with as low as $500, and then be committed to putting another $25 to $50 a month automatically into that investment and allow it to build over time.

Interviewer: Now, when we are talking about maybe credit card loans or, you know, if we have to pay off any other debt, should that take priority over investing?

Matthew: I think it depends on the amount of interest you're paying. If the amount of interest is significantly high and your opportunity to invest a return is not as great, then you want to pay off the higher credit card debt. If you have some very low interest loans that are also tax deductible, maybe making an investment is wise at that point in time. I think you can also do both.

Interviewer: Well, and as we know, the stock market is always a risk, and it's up, it's down. You can't predict it. Why is it worth it for us right now to invest and to take that risk?

Matthew: Well, I think that's the reason why it's important is that we don't know what the future is going to hold. And if you can do it systematically over time, you're lessening the risk you have by automatically investing into the market on a regular basis. Some days will be up, some days will be lower, but over time, you will build a very significant asset for yourself by consistently doing the right thing for yourself.

Interviewer: And hey, if we have $500 now, if we can make more, that'd be pretty nice, right?

Matthew: That's a start, absolutely. Absolutely.

Interviewer: All right. Great. Well, we have more information on our website, fox43.com. Just click on the ads seen on tab, and also you have a great Facebook page as well, and a website. So we have links to all of that if you want to get more information. Matthew, thank you so much. We appreciate it.

Matthew: Very welcome to be here. Thank you.

Interviewer: Great.

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