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How Will You Spend Your Tax Refund?

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In a recent article on CNN Money, they recommended that you do one of five things with your tax refund, which will average around $2500, and they all revolved around either saving for a rainy day (retirement, emergency fund) or paying down the rainy days you spend shopping (credit card and other debts) so I wanted to ask you all… how will you spend your tax refund?

{ 25 comments, please add your thoughts now! }

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25 Responses to “How Will You Spend Your Tax Refund?”

  1. Tinyhands says:

    Since my retirement savings are covered through my regular budget and I’ve got plenty of emergency fund, I was going to treat this as “found money.” I originally thought I would put 1/3 into long-term savings, 1/3 into short-term savings, and spend 1/3 now on instant gratification. But I was a poor, unemployed graduate student for a long time and old habits die hard. Spending the money on instant gratification doesn’t sound very appealing. Long story short, I guess it’s just going into the bank. :(

  2. Jeremy says:

    I owe about what the average person is getting back, so I’d just be happy to not owe anything let alone a refund. It was a wild year financially for us with wildly fluxing income so we got screwed.

    When I do get a refund though I usually go to the casino and let it all ride on red at the roulette table.

  3. MoneyFwd says:

    I put all of mine into savings and soon that will go towards tuition. Since I’m paying my tuition out-of-pocket and my wife and I are living on my little salary, it’s the only option.

  4. eROCK says:

    I’ve decided to put the full amount towards paying off my credit card with the highest APR.

    Next year, when I’m out of debt, I’m going to go on a vacation with the money and celebrate how hard I’ve worked to pay off my debt.

    Future tax refunds will go into my Roth IRA.

  5. Lulu says:

    I got my income tax refund back and I have decided to throw it at the debt snowball. I put one eighth of it away in the savings accounts and I am putting all the rest of it on the colt loan. Actually all of the money is in the high interest account that I have with Electric Orange for this month. I am trying to see how much interest that will be……The full story of what I did can be found on my blog.

  6. You can vote on the best use of a tax refund with a little hot or not type game: Best use of income tax refunds

  7. Lau says:

    Refund? What refund? I wish I was getting a refund…

  8. MossySF says:

    Will save it for 1 share of BRK-A. Only need about 48 years of refunds to go.

  9. TooMuchWithholding says:

    I’m getting 3200 back from fed and state–very bad! I’m investigating 529s for 6mo DD.

  10. Golbguru says:

    All refund will go towards our savings. That said, we are not even getting a three digit refund this year….but it will still go towards the savings account. :)

  11. Dustin says:

    I put mine in my savings account which is being built for a down payment on my first home.

  12. wanzman says:

    I am getting back about 550 dollars and I am going to “invest” it in some clothes for my post graduation job that starts this June.

  13. Miranda says:

    Refund? Nope. I owe money. I work for myself, so I pay FICA for myself, too. Depressing, but I found out that I can pay quarterly, and so next year it won’t be such a kick in the pants.

  14. RootAnn says:

    No refund here - we’ll be paying this year. In past years, we’ve split it up with 15% instant gratification (husband buys books, wife buys power tools), 50% house improvement (“finishing” the downstairs), and 35% to savings/investment accounts. Our IRAs are already fully funded. No debt other than house & zero-percent car loan – both in the budget already.

  15. twins15 says:

    I’ll be putting mine in savings, for future payment of college tuition… so fun!

  16. alandr7 says:

    emergency fund

  17. Matt says:

    Stuck it into my “quit the day job and work full-time building the business” fund. With luck, that’ll have $80,000 in it by the end of 2008, and I’ll be able to do exactly what the name of the fund implies.

  18. EMF says:

    I’m going to apply my refund amount of $4.90 to my 2007 taxes — not worth a trip to the bank.

    Actually I’m a bit disappointed — tried to set it up so I’d owe about $100. Means I had too much withheld.

  19. Rogers Place says:

    80% percent of our refund went to various savings sources for a rainy day. As like many average Americans we applied the remaining 20% to pay down various debt. Saving any money nowadays is hard. Once you get enough, the interest and dividends should pay for everything you need and you won’t need to work or work as hard.

  20. Rob Carlson says:

    Half to emergency fund, half to bathroom remodeling. The rest of the new bathroom comes out of the home equity line.

  21. Nathan says:

    The above-mentioned CNN Money tax refund article

  22. Miller says:

    What refund… ? =(

  23. zen says:

    It’s *all* in the bank.

  24. ChrisCPA says:

    Roth contributions!

  25. DanyO says:

    Personally, I don’t have a choice, 100% of my refunds go to my student loans, due to the way the goverment program is run. I should be out of student loans hell in a year or two, so that’s good. can’t wait.


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