What should I spend my refund on?

The long wait is almost over!  You have survived The Great Tax Refund Delay of 2017!  Now what should you spend all of that money on?

New Car:

This tax refund season can be the best time in years to buy a car.  Dealers are ready to sell and have plenty of vehicles to choose from.  But with the extended delay of refunds, many dealerships and car lots are desperate to sell what they have.  This puts you in the driver’s seat…literally.

When the IRS pays out your refund, you will have the money for a down payment that the dealer needs.  This will allow you to get a better interest rate, lower payments, and a shorter loan.


PAY IT OFF!!  Credit card interest can be brutal.  Prioritize and pay off what you owe immediately.  This will help you save money on interest and allow your tax refund to go much further.

Do you have multiple credit cards or loans?  Ignore which card you owe the most on, pay off the card with the highest interest rate first.  This will maximize your refund dollar and extend your savings.

Second, pay off cards with the lowest balances.  This will reduce the number of minimum payments that you have to make every month.


It hurts to pay for something that you may not use, but insurance is a great purchase if you ever need it.  Car insurance is a legal requirement to drive.  Health insurance is essential in case something really bad happens.  Even if nothing bad happens in the next year, insurance always buys you something.  Peace of mind.

You don’t want to cut corners by not covering your children, but medical insurance for yourself is also for them.  If something major or unexpected happens to you, how are your kids expected to pay for it?   Your options are limited if you do not have health coverage, so insuring yourself is another way of insuring your family.

Rainy Day Fund:

Set SOMETHING aside for an emergency.  You never know when you might need it.

Treat your finances like a business.  Create a policy & stick to it.  “I am only allowed to spend my rainy day fund on x, y, and z.”  It may take some discipline, but the effort is worth it.

Last on the list, luxury items:

The calendar year changes on January 1st, but your financial year begins and ends with your tax refund.  You work hard all year to get ahead or get caught up.  Do not start the next financial year off on the wrong foot by spending money on things that are not essential.

Get ahead with your tax refund and stay ahead.  Make a Financial New Year’s Resolution to stop paying backwards every year and start thinking forward.  You spent all of this refund money to pay debts on things you no longer use.  Take inventory on what is important and reduce stress for the coming year.