Charles Schwab is encouraging people receiving tax refunds to resist the temptation to use the money for impulse purchases, but, rather, to use the money for long-term financial goals, especially retirement, and paying down high-interest debt.

Even though the economy appears to be out of the woods, Schwab reminds people to stick to realistic budgets and sock away an emergency fund to cover three to six months of living expenses. For those 50 or over, Schwab reminds them that they can contribute an additional $1,000 to an IRA. Parents, as well, would do well to take advantage of a 529 college savings plan, Schwab says.

“While new electronics and vacations are tempting, we encourage our clients to use refunds to support longer-term financial goals,” said Kim Segal, a financial consultant in Schwab’s Boston branch. “Particularly in today’s economic environment, it’s important for investors to maximize the impact of this influx of cash by paying down debt or growing an emergency fund.”

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