Extra Income? What to do before it’s gone.

As spring’s arrival gets closer, you may also be anticipating the arrival of a large inflow of “extra” income.  This may be in the form of an income tax refund, pay raise, annual bonus, stock grant or restricted stock vesting.   Before this extra income actually hits your bank account, take some time to consider the best use for these additional assets.  Otherwise, it is too easy for the additional dollars to erode away while they sit in your checking account commingled with your regular income. Tax Refunds: In the case of a tax refund, let’s first examine the circumstances surrounding a big refund.  If this is a rare occurrence, then you need to consider the best use for your one-time windfall.  This might include a contribution to a Roth IRA, rebuilding your emergency savings or setting aside for an upcoming car purchase. If a sizeable refund is an annual event for you, consider the following.  By withholding more tax than you need on all your paychecks throughout the year, not only are you forfeiting use of that money, but typically Read on! →