Your Tax Refund: Do This, Not That!

Woman with Piggy Bank

If you file taxes and get a return, you know that there's no better feeling than having that extra cash in your bank account. Are you considering spending your tax refund this year? Saving it?

Whatever you decide, here are some do's and don'ts when it comes to using your extra funds wisely:

Don't deposit your tax refund into a low-interest account.

Do your research and find savings and checking accounts that will give you the highest return possible. Open a Certificate of Deposit (CD's) or Money Market account to earn more interest if you don't plan to use your refund right away. If you are considering other financial options for your refund, look beyond checking and savings accounts and find investments like stocks and bonds that can give you an even bigger return. Being disciplined with your refund can set you up for financial success.

Don't spend it on unnecessary purchases.

Don't get caught up in instant gratification which can be costly. Instead, be reasonable and responsible with your tax refund. There's no harm in treating yourself to something nice, but you should focus on paying off student loans or credit card debt first. Our advice? Avoid the shopping spree or lavish vacation and put your refund to better use by tackling debt or establishing an emergency fund.

Don't gamble with your refund

You may think you can double or triple your tax return by playing slots or black jack, but the truth is you're more likely to leave empty handed. Don't waste your time (and money) on this short term fun. Instead, use your refund to complete home renovations which can help invest money back into your house. An added bonus is that it can increase your home values when its time to sell. Consider upgrading your roof, replacing your windows, or revamping your landscape to see the biggest returns.

You may also like…

The Realities of Paying Off Student Loans

Winter Side Hustles You Can Do On the Weekend

What to Do Before 30 if You Want to Build Wealth

Return to the blog archive