What To Do With Money From a Tax Refund?

Happy Tax Day! You made it through another year of filing taxes and, for the lucky ones, you may even have money coming back to you in the form of a tax refund.  Before you take your refund check and run off on a shopping spree or a little vacation, stop for a minute and ask yourself – how can I use this money to benefit me the most? I know. Sorry to be a buzz kill but I promise that you will thank me later, maybe much much later…

A tax refund, like any money other than your normal paycheck, however big or small, is what I refer to as a “windfall,” extra money that has fallen into your lap. Capturing and really using windfalls to reach your financial goals will take you a long way towards your goals, especially if you are one of those girls who lives paycheck to paycheck and struggles to pay your bills much less save for anything else.

So, the next question would naturally be, what are your goals? What are the things that you always have always wanted to do but never seem to have the money for it. Make a list of these things (Yes, I am fond of lists because I am a visual person) and then rate them from most important to least. This will give you a better idea of how you can use your tax refund, or any “windfall” to benefit you the most. If, at the end of the day, you decide a vacation or a shopping spree is want to use your money for, that is great. But, at least put some thought in it first. Just the simple exercise of asking yourself what you really need and making a list will completely change your mindset on how to spend this money.

For more about how to use your money to be financially secure, see What To Do With This Cash.