These Are the 4 Best Money Moves for April

Spring has officially sprung — and while many may be excited for the warmer days ahead, few probably feel the same way about the paperwork that comes with tax season, which wraps up this month.

We’re here to help you get organized, with tips on how to reset your finances with a “spring clean.” We also have some investment advice that could help boost your savings, and if you’re a federal student loan borrower with older loans, there’s an upcoming important deadline that affects student loan forgiveness.

Keep reading for the best money moves to make this April.

 

1. File your taxes by April 15

More than 80 million Americans have filed their 2023 tax returns so far — far less than the 146 million the IRS expects to receive. If you’re one of the tens of millions who still need to get down to business and file, you have roughly two weeks before the federal deadline (again, it’s April 15).

Most state income taxes are due on this day too, unless you’re a resident of Massachusetts, Maine, Hawaii, New Mexico, Oklahoma, Delaware, Iowa, Virginia or Louisiana. These states’ filing deadlines fall a little later than the federal deadline. (You can see a full list of state tax deadlines here.)

The sooner you file, the sooner you’ll get your tax refund(s) if you expect to receive money back from your state or the federal government. When you do get your refund, be sure to use it wisely (that means not blowing it all on a shopping spree). We have a few suggestions you should check out on investing your refund money.

If you’re not anticipating a refund, you may be tempted to put off the paperwork and delay figuring out how much you owe. But that’s not going to help: If you fail to file your taxes, you will typically owe a penalty of 5% of the tax owed for each month your return is late. Failing to file for more than 60 days past the deadline comes with a minimum penalty of $100, or 100% of the tax owed with your return, depending on which is less. You can avoid these penalties by filing an extension by Tax Day if you know that you’ll need more time, which will move your deadline to Oct. 15.

Don’t let the next couple weeks get away from you by procrastinating. Go forth and file!

 

2. Spring clean your finances

April is Financial Literacy Month, and what better way to honor the occasion than by conducting a financial check-up?

Regardless of your financial goals, now is the perfect time to revisit them and get to those pesky tasks you’ve been putting off. Maybe you’ve been meaning to devise a game plan to improve your credit score or roll over a retirement account from a past job. Do you have a bunch of Hello Fresh recipes sitting untouched on your kitchen counter? It may be time to cancel that meal kit subscription.

A good place to start is to check your personal information, payment history and open accounts on your credit report. Last year, the three major credit bureaus (Equifax, Experian and TransUnion) permanently extended a program that allows consumers to check their credit report with each agency once a week at no charge. You just need to go to AnnualCreditReport.com to request your free copies.

While there’s no overnight remedy to fix credit problems, the first step is figuring out exactly what’s in your records. Then, you may need to remove negative information from your credit report, like a payment incorrectly marked as late.

Next, review your budget to see if you have expenses that you can trim or get rid of entirely. Americans think they spend an average of $62 a month on subscriptions like streaming services or fitness memberships, but they actually spend $273, according to 2021 research from consulting firm West Monroe. Those dollars could be redirected to your “fun budget” for the summer months, when you’d probably prefer a trip to the beach over binge-viewing TV shows.

While you’re at it, if you have retirement accounts like an IRA or 401(k), make sure you’re contributing the maximum amount you can afford. You may also want to look at your recent statements to see if your asset allocation (aka the mix of stocks, bonds and other assets in your retirement portfolio) needs an update. The best allocation for you will depend on factors like your age and risk tolerance.

For example, you can handle more risk when you’re young, so it’s typically best to have the majority of your portfolio in stocks and shift them to more conservative investments as you get older. If you’re not sure what the right asset allocation is for you, you can use a calculator to figure it out.

3. Put your money in high-yield accounts

High interest rates resulting from the Federal Reserve’s inflation-busting rate hikes have been haunting borrowers for about two years now. But on the flip side, the rate hikes also sent annual percentage yields on certificates of deposit (CDs) soaring, creating a rare environment for investors looking for safe ways to grow their money,

With the Fed poised to cut interest rates three times in 2024, APYs on CDs are unlikely to increase again. (In fact, they’ve already started declining in some cases.) A recent survey found that more than 40% of certified financial planners are advising their clients to move their money into these high-yield investment accounts while rates are still high.

CDs are especially good investments at the moment because of their fixed rates and term lengths — guaranteeing you returns over the next few years regardless of what happens in the stock market. You can check out our story on how to ladder CDs to get the most out of your savings, or learn more about where experts expect CD rates to go this year.

4. Consolidate your student loans by April 30

If you’re a student loan borrower with certain types of older federally managed loans, you may want to consolidate your loans this month to qualify for a temporary benefit that’s helping borrowers get credit for past payments. So far, more than 850,000 student loan borrowers have qualified for forgiveness through this income-driven repayment plan (IDR) account adjustment.

Under income-driven repayment plans, borrowers can have the remainder of their balance forgiven after making a certain number of qualified payments, ranging between 12 years and 25 years, depending on the type of loans you have. During this one-time account adjustment, the administration is essentially bending the rules of what counts as a qualified payment in an effort to retroactively fix problems with how income-driven repayment was managed in the past. Payments will count regardless of what repayment plan you were in, and periods of forbearance or deferment will also count.

The result? Many borrowers will have enough payments to qualify for forgiveness after the recount, and many others could be much closer to having the number of payments needed for forgiveness.

If you have loans that are owned by the Education Department (that includes all federal Direct loans), you do not need to take any action for your payments to be recounted. But if you have privately-held Federal Family Education Loans (FFEL), Perkins loans or Health Education Assistance Loan (HEAL) Program loans, you must consolidate them by April 30 to be eligible for the account adjustment.

Note that consolidating your loans can take a few weeks of processing time, but you only need to have filled out the paperwork at studentaid.gov by April 30 to be eligible.

 

More from Money:

To Afford a Down Payment, Young Homebuyers Often Need ‘a Pot of Family Money’

What to Do if Your Tax Refund Isn’t What You Expected

Can’t Make the Tax Deadline? Here’s How to File for an Extension or Set up a Payment Plan With the IRS

 

© Copyright 2024 Money Group, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.

 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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