With the government shut down, there may be delays on receiving Earned Income Credit. Instead of getting stressed out over this- it can’t last forever–spend the time planning how to use it to help improve your finances this year. One way is to put it towards a down payment on a used car, so that you have lower monthly payments. The ideal down payment for a car is 20%. There are three big advantages to this.

More Money in Your Pocket

Lower monthly payments mean that you pay less interest over the life of the loan. This is particularly important for subprime borrowers who pay higher interest rates.

More Skin the Game

While a car is a necessity in modern life, and yes, some are luxuries, it’s not considered an investment. In fact, it depreciates rapidly in the first few years. By having already paid off a good portion of it, you don’t have to worry about the value of your car being less than what you owe on it.

Stay Above Water

Owing more than a car is worth is known as being “under water.” The problems with this is that if you want to trade it in for a new car, you might not have a credit, and could even end up owing money. Another issue is if the car is totaled, the insurance pay out might be less than what you owe on the car.

So when you receive a tax refund this year, think of ways it can be used to improve your financial health for the year. One of these is to make a bigger down payment on a used car so that you have more money in your pocket and can always sell for more than you owe if need be.