Like any sudden in-flow of cash, your tax refund presents an opportunity to spend your money wisely or foolishly.

And while it would be easy to blow the cash on fleeting fun, like a shopping spree or a slew of the latest gadgets, experts say the money would be best used to pay down debt and invest in saving plans that can help you grow your nest egg.

Here are some ideas to help you make the most of your refund this tax season:

Eliminate Debt

Interest can build quickly, so consider using your tax refund to pay off a portion of your outstanding debt. Whether it be credit card debt, student loans, or a mortgage, opt to pay off the obligation with the highest interest first. Or, eliminate an entire smaller debt in full if possible. Doing so will give you a sense of accomplishment and motivate you to keep going.

You can use financial calculators online to help you calculate where your refund would be most beneficial.


Budget and plan how you will use your refund. Once you know the amount you’re due to receive, spend time planning how you wish to allocate the money. Free online services like can help you establish a budget for your goals. Or use personal finance desktop software, like Quicken, to help you manage the sudden cash flow.

Remember to budget in a little fun. Treating yourself to a small reward that you can afford responsibly may help you stay on track with your more serious priorities.


Consider investment options that can help you grow your wealth. A no-fee, self-directed IRA that provides predictable returns with tax advantages is a decent choice for long-term savings. Experts say that with the right investment tools, you can expect to grow your wealth substantially over time.

“The key to doubling and redoubling your money is avoiding mistakes and investing smarter,” says financial advisor, Brendan Ross of Ross Asset Advisors, Inc.

Just because your tax refund arrives in a big lump sum, doesn't mean it’s any different than your regular income. Use the money responsibly to meet goals that matter to your future.


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