What to do with your PFD?
When considering what to do with your Alaska Permanent Fund Dividend (PFD), you can choose to save it for a rainy day, invest it in a retirement account, pay down debt, use it for a significant purchase like home repairs or a new appliance, donate to a local charity, or simply spend it on necessary expenses or personal treats; the key is to create a budget and plan based on your individual financial needs and goals.
Of course, There’s always the enjoyable thought of taking yourself, or yourself and the family, on a vacation someplace warm and exciting. The thought of digging your feet into the warm sand somewhere, while the sun’s heat hugs your skin as you sip on a wonderfully iced uplifting beverage, is always delightful!
Key points to consider when managing your PFD:
Budgeting: Create a plan for how you will use your PFD, considering essential needs, desired purchases, and potential savings opportunities.
Debt Reduction: Prioritize paying down high-interest debt like credit cards with a portion of your PFD to save money on interest.
Investing: Consider investing a part of your PFD in a retirement account like a 401(k) or IRA to grow your long-term savings.
Savings: Set aside a portion of your PFD in a dedicated savings account for emergencies or future goals like a down payment on a house.
Home Improvement: Use your PFD to cover necessary home repairs or upgrades.
Education Funding: If you have children, consider contributing to a 529 college savings plan with part of your PFD.
Charitable Donations: Donate a portion of your PFD to a local charity or cause you support.
Important factors to remember:
Tax Implications: Your PFD is considered taxable income on your federal tax return.
Garnishment: If you have outstanding debts like child support, a portion of your PFD may be garnished.
Application Deadline: Be sure to file your PFD application before the deadline each year to receive your dividend.
Can you feel the excitement in the air? PFD season is upon us, and Alaska is brimming with joy! This year, you’re going to make that PFD stretch further – have more fun, reach more goals, and avoid any PFD hurdles. With our advice at your fingertips, you’ll save time, energy and funds!
__________
Check the status of your PFD
You submitted your application ahead of the deadline and you're eagerly awaiting those extra funds. Verify your application was approved at myPFD. If you applied online, requested direct deposit and are in "Eligible-Not Paid" status as of September 20, the PFD website states your funds should be distributed on October 3!
Set deposit alerts
What’s more instantly gratifying than waking up on October 3, looking at your phone and BAM! A notification says, “funds have been deposited into your account.” You won’t need to call, wait in line or even log in to Online Access to check on your PFD! Trust us, deposit alerts are the best thing ever.
Make sure you’re all set up with Online Access for your bank or credit union, so you can modify your alerts and manage funds at any time.
Set aside $$$ for taxes
Don’t forget that you'll need to claim PFD income on your taxes! Added income may also mean you owe money come tax time, so ask your tax professional for details today. You’re welcome for the heads up. :)
Set up a spending plan
With a little extra planning, you can invest PFD funds in yourself and earn an even bigger reward. Here are a few great “investment” ideas:
Put your PFD down toward a secured loan. These funds will act as collateral for the loan, which can help you secure a lower interest rate. Your PFD funds will be saved, and you’ll also save money on your loan! Bonus: on-time payments toward a secured loan will boost your credit score. It’s a win win!
Set aside some “rainy day” savings. Put your PFD into a Certificate of Deposit (CD) so you won’t be tempted to spend it on a whim. Watch your money grow at higher dividends!
Make a donation. You may not want to donate your entire PFD, but consider how a small chunk could make a big impact on your community. You can also claim your donation on your taxes when you donate to a nonprofit.
Pay down your current credit card balance. The amount you’ve charged to plastic makes up a whopping 30% of your credit score. Paying down the balance can help your score go WAY UP!
With your preparations and plans in order, you're ready to thrive this PFD season! Go out there and lay the groundwork to achieve all your financial goals.
