Six Life-Changing Ways to Use Your Tax Refund
According to the IRS, the average refund is around $3,000. That's a lot of cash. It's far too easy to blow this money and regret not putting it to good use. Be smart, avoid refund regret, and use this windfall wisely.
6 Smart Money Moves to Get the Most Out of Your Refund
Put it towards your retirement.
Invest in your future now by moving your tax refund into a tax-advantaged retirement account. If you have an Individual Retirement Account (IRA), make a one-time, sizable contribution (be mindful of your limit for the year though).
Pay down credit card debt.
Attack the card with the highest interest rate. If you can pay off the card in full, that's even better.
Build up your emergency fund.
Stash some of your refund into cash savings. Tucking away a moderate amount — even as little as $500 — can help alleviate the negative side-effects of unexpected expenses. If you already have an emergency fund, nice work! Now you can give yourself an extra boost toward reaching that 3-6 months of living expenses recommendation.
Pay down your mortgage, rent or loans.
Whether you have a monthly mortgage or a hefty rental payment, give yourself some breathing room by using your tax refund to pay it forward. You also might consider using it to reduce the outstanding principal on your car or student loans.
Invest in Your Assets.
Spend your tax refund on higher-priced, but necessary, repairs to your home or vehicle. Go ahead and get an estimate for that leaky roof or get those new tires you've been needing.
Live your bucket list.
If you've already covered everything listed above, find a way to responsibly treat yourself. You can use websites like Travelzoo to score deeply discounted vacation packages or invest in new hardware that you can use for work and pleasure, like that smart phone you’ve had your eye on.
Helpful Tax Filing Tips:
Tax Day 2023, the last day to file your 2023 taxes, is Tuesday, April 18, 2023 (assuming you're not filing an extension).
Your tax refund will typically be available within 21 days if you file electronically.
Filing taxes electronically with direct deposit ensures the refund gets to your bank account quickly, the IRS says.
The IRS has resources to help you file your taxes and track your refund.