Received my income tax refund - Now what?

Congratulations on receiving your refund. Now it's time to get your financial house in order. Below are some priorities:

$10,000 reserve fund - You've heard this one many times. Few taxpayers have an adequate emergency fund that could be used for living expenses in the event of a major crisis, like job loss. Having three to six months in a reserve fund is recommended. With $10,000 at least it's a starting point.

Credit Card Debit - Now that the new credit card rules are in place, it's imperative that your credit card debt be managed. A credit card charging 18% interest will be difficult to pay off.

401k - Failure to fund your 401(k) can be like throwing away free money because you could be passing up the employer match. The contribution withheld from your paycheck also reduces your taxable income.

Roth IRA – This is the best way to save for down the road. Whether for retirement (after age 59 ½) or purchasing your first home (up to $10,000), withdraws from your IRA are not taxable income and are not subject to an early withdraw penalty.

Child's College – once your retirement needs are satisfied now you can focus on your child's future. A 529 plan allows you to easily invest money with tax-free growth for educational expenses down the road. Remember, your kid can always obtain student loans. Who is going to loan you money when you’re old and no longer able to work?

Good Debt – Loans used build wealth (mortgage loans) and build your career (student loans) is OK as long as the interest rates are reasonable. Currently the Fed Discount Rate is 0% to .25%. If you have good debt but your interest rate is high, consider refinancing.