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How to Use Your Tax Refund Wisely

Tax Refund Tip: Split Your Refund Into Chunks

There’s nothing quite like the feeling of finally getting hold of your refund from Uncle Sam. Since most of us never know how much — if any — we’re going to get back until we file our dreaded tax returns, getting a refund feels like an unexpected gift. But it’s all too easy to blow your check almost as soon as you receive it, if you aren’t careful. If this sounds like you, take a cue from Money magazine, and split your refund up into chunks.

Money recommends immediately putting most of your refund in savings, where it won’t be touched (this is usually my intention, but I don’t always follow through like I should!). Then comes the fun part: take the rest of your refund out in cash (or split it between you and your partner if you filed jointly). This way, you still get that Christmas-morning feeling when your refund arrives, because you know you’ll get to spend at least some of it on something fun. But you’ll also avoid that post-refund-spending sense of regret, as you watch your mounting credit card debt and wish you’d paid it off.

Join The Conversation
chloe-bella chloe-bella 7 years
No refund for me this year. I had to pay $1500 extra :(
Spectra Spectra 7 years
Here's what we're doing with ours: Go down to the bank and write them a big, FAT check for the principal on the mortgage. It feels SO awesome to be there to pay off a big chunk of debt in person like that.
supercoolnat supercoolnat 7 years
I just put all of mine in savings. Since we have a long-term goal we're saving for, there's no reason to spend any of the extra money right now.
skigurl skigurl 7 years
i agree with this since we're getting $7000, i think we will put about $1000 of it into a new bathroom, $1000 into a central vac, $2000 into RRSPs, $2000 to save for a trip, and $500 for general stuff around the house
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