SOURCE: Take Charge America

March 27, 2008 18:38 ET

Take Charge America Offers Tips on Making Income Tax Refunds More Valuable

Debt Management Company Offers Tips to Maximize Refund Potential and Minimize Debts

PHOENIX, AZ--(Marketwire - March 27, 2008) - Take Charge America, a non-profit financial counseling and debt consolidation organization, is offering consumers tips on how to manage their 2007 income tax refund to maximize the money's potential to make life better.

"When receiving a lump sum of money, as many Americans do through their income tax refund, it is tempting for consumers to spend it as found money," said Mike Sullivan, director of education at Take Charge America. "Instead, consumers should view tax refunds as a chance to get ahead of debt and make a better future. It can be a 'New Year' for money matters."

Sullivan notes that the key to successfully managing refund money is for consumers to understand their overall financial situation and determine financial needs. Financial needs can include regular expenses such as mortgage payments, car payments and grocery expenses, but often include credit card debt. Take Charge America offers the following tips when considering how to handle a tax refund:

-- Get your entire return - Don't take a tax refund anticipation loan if you really don't have to. Wait two weeks and the IRS will deposit your entire refund in your account. You just may find a use for those extra dollars.

-- Understand your financial standing - Get a free copy of your credit report at If there is anything negative in it, make a resolution to fix it. If you find analyzing your credit report to be too difficult, check your FICO score at This costs $15.95 but it is easier than reading your credit report. If your score is below 700, you need to get to work by using refund dollars to get bills paid on time and setting up a budget.

-- Look at your credit card spending - Take a look at your credit card bills and determine the card with the highest interest rate and attack it with those refund dollars. As an added precaution, eliminate temptation by removing all cards but one from your wallet. Place the rest in a safe place at home that you don't access every day like a toilet tank or the trap under your sink. By avoiding credit card spending, you will eliminate a lot of unnecessary spending and save on fees and interest.

-- Prepare for upcoming expenditures - Take a look at upcoming life changes that are likely to take place over the next few months. Consider job changes, marriage, children or purchasing a new home or vehicle. Tax refunds can help pay for costs like these without making you resort to credit.

-- Build your savings account - Do you have three months worth of living expenses saved? It is critical to set aside money for emergencies, such as vehicle, housing or medical issues. If you have adequate emergency savings, why not start a fund for education or a special vacation?

-- Consider changing your withholding - If you are getting a large refund, you have been giving the IRS an interest free loan. Change your withholding amount so you have the use of that money and get a very small refund next year.

Consumers seeking financial assistance are encouraged to contact Take Charge America. The organization helps individuals through education, customized credit counseling and personal finance budgeting. Educational and informational services are available at


Founded in 1987, Take Charge America, Inc. (TCA) is a non-profit organization headquartered in Phoenix. To learn more about TCA or its programs, please call 1-800-823-7396 or visit

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