Save. It is absolutely necessary to have money set aside in case of emergencies, unemployment or other unexpected costs. If you haven’t adjusted your budget to allocate 10% of your monthly income to savings, adding your tax refund to the pot should help you get to your annual savings goal.



Invest. If you are preparing for retirement or investing to build your general wealth investing your tax refund is a smart choice. Why spend your tax refund when you can let it grow? Investing in a Traditional IRA may qualify you for a tax credit that results in more dollars on your tax return. 

Build Credit. If your credit score is below average you should consider a secured credit card or secured loan. With secured cards and loans you use your money (your tax refund) as a deposit and the lender extends credit. As you use the funds and make regular payments, your lender reports your timely payments to the credit bureaus which in turn increases your credit score.

Pay Down Debt. Consider making an extra mortgage payment or making a lump sum credit card payment. Did you know that just one extra payment per year can take years off of your mortgage? Paying down your credit card not only improves your debt-to-income ratio that lenders look at but it will also lower your monthly payment.

Start A Business. We have all heard the saying you have to spend money to make money. Having the funds to start your business is usually the first hurdle to get over when starting a business. As long as you have attainable goals and a solid business plan, use your tax refund to get your business up and running. You can turn that one time tax refund into monthly income for years to come.