Six Smart Ways to Spend Your Tax Refund


You’ve won the motherlode! Usually when taxes come up in conversation, it’s not a discussion with celebration in mind – but on this occasion, you’ve been given a tax refund.

Getting a tax refund means that you’ve overpaid on your taxes, and now that the tax period is here, it’s been determined you did not owe that money, and are due it back. However, don’t look at like you’ve lost out on money at some point – because you managed to survive without it anyway!

Instead view it as getting some free money for nothing, and a potential investment opportunity. Tax returns don’t come round often, so if you’ve won this lottery, spend it wisely, or at least creatively. Here are six smart ways to spend your tax refund:

Create a rainy day fund

If you don’t know what to do, and can’t decide on something you need immediately, remember that you don’t have to spend this money at all.

You can save yourself future hassle or headache, simply by preparing for when it unexpectedly arrives. Despite the clichés, don’t put the money in a jar on top of the freezer, or in the sock drawer.

Start an emergency fund in one of your savings accounts and have that money accumulate over time to save you when you need it most.

Invest your money

Thanks to plenty of easily available online services out there, anyone can begin investing in stocks and opportunities out there with very little capital investment.

While it may not be the first thing you think of with your usual spending money, or whether you usually don’t have the option, it’s a very clever opportunity for you, considering that since it’s a refund and we’re thinking of it as free money, there isn’t really a losing situation.

The stocks will either depreciate over time, and you have to chalk it up as a loss, or it could pay off over time, and increase your potential spending until a time when you better know what to do with it.

Always remember you can even invest in a local business if you’re feeling confident!

Pay off your credit card debts

If you have any outstanding credit card debts – get rid of them!

Credit cards can be so useful, but it’s important not to forget that if they aren’t paid off, it can end up in a very nasty situation arising, and your bank would be forgiving for unpaid debts.

Get rid of this worry, and pay off your debts. Simple as that.

Make a donation

The tax refund could be big or small, it might mean a lot to you or a little.

But regardless of that, if you’re really unsure of what to do with it, remember that there are people out there who could really use it and are waiting for generous donations like this one.

You shouldn’t feel compelled to do this with your money, but just remember it as a potential option and a nice thought.

Pay off a long-term loan

Unfortunately, long-term loans are an everyday part of adult life, and we all know occasionally the worry can get to us.

While your tax refund probably isn’t going to remove a long-term loan entirely, don’t forget that little extra contributions to your loans can not only remove that worry from your head for a surprisingly long period of time, but it also reduces how long you’ll have to be paying off some of those debts, and get your closer to earning what you deserve.

Depending on your package, you can pay off your home mortgage, car loans, and even student debts!

Have a treat!

Remember that this is still your hard earned money that you’re entirely entitled to, you just didn’t have access to it until now. With that being said it’s totally an option to just treat yourself for once, you deserve it!

You can either blow it all at once in a bit of a catharsis by buying something you’ve always wanted. But another nice option is simply to be a little easier on yourself over the long term. It’s nice to not have to be so frugal about some of the smaller things.

No matter what you decide, this can be a great time for you and it’s come entirely out of nowhere! Do exactly what you want to do with it, it’s as well deserved as every other paycheck you’ve ever worked for. And if you’re still unsure, you can always head over to for a variety of services to help your decision!