Spend Your Tax Refund Smart


Not sure how to spend your tax refund responsibly? Learn how to spend your tax refund smart.

Every year when my tax refund arrives, I automatically hear the O’Jays echoing in my head.

“Money, money, money, mon-nnney! … Do things, good things with it. Talk about cash money, money. Dollar bill, y’all”

It seems like before the song has even finished, I’ve spent that mean, mean green. This year, I’m trying to spend my tax refund smart. Before you go out and purchase that new big screen you’ve been eyeing, let’s talk about some other areas the money might be better spent.

Your Emergency Fund

How should you spend your tax refund? Trick question! Maybe you shouldn’t spend it at all. According to a Bankrate.com survey in January of 2015, more than 60% of Americans do not have enough set aside to handle even minor emergencies. Life happens. We all should have at least three times what we make per month set aside for an emergency fund. That will cover life’s unexpected surprises, like a trip to the emergency room or a big car repair.

Lighten Your Debt Load

If you have any debt, your tax refund is a great opportunity to make headway on eliminating it.

Your Career

Maybe you’re not where you want to be in your career. Or, maybe you don’t feel that you’re in the right career at all. One of the best investments you can make in life is to invest in improving your career, because it can increase your lifetime earnings and possibly your overall happiness. Spending your tax refund on continuing education courses or online classes to learn a new skill may be the right choice for you.

Retirement Account

You may be thinking you still have plenty of time to stash money away for retirement. But, a phrase you’ll hear yourself and others saying more often over the years is, “Well I’m not getting any younger!” Time has a way of sneaking up on us. Start saving early and regularly. Early withdrawals, missed contributions and loans can result in lower savings, fewer assets and less compounding in retirement. It also affects how early you can retire. I don’t know about you, but I’m trying to be on a beach and sipping a margarita when I’m sixty-five. See you on the surf!


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