Re: What should I do with my refund?
Level 3

Your money stories

I concur with all the above advice with one exception:

 

I would pay off debt before I buy stocks, mutual finds or ETF’s. Why?

As Steve L noted, if you pay off a loan with 18% interest, you have effectively earned a guaranteed 18% return. You have no such guarantee in the financial markets. Once all credit card and installment debt (car loan) is paid, I would save for a down payment on a home.

 

Also as noted above, you should balance a 6-12 month emergency fund with paying off your debt.

 

Finally, I would deploy savings in an internet bank. As of today, one can earn over 2% in an internet bank such as American Express. and CITI.

 

Good job everyone!
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