1. I haven’t had a tax refund in a LONG time, so I have no idea what I would do with one, but last year I advised a client to pay down some of her credit card debt because she was at a pretty high debt utilization level and her credit score increased over 40 points after doing that so she really got a good bang for her refund buck on that move.

  2. I like to follow Liz Weston’s advice, which is to take 10% of a windfall to spend on something you want. The rest goes to practical things like savings, debt, etc. The 10% keeps you from feeling deprived, but you’re not burning through useful money.

  3. I usually put a little of my tax refund aside for savings and a mini vacation, but this year I’m putting 90% of it toward my debt. It feels better than any trip can make me feel right now.

  4. I tend to overestimate how much I owe so I always get a refund back. It’s not very smart, like you said, but it’s hard for me to estimate taxes each year since I’m self-employed. We’ll probably just add ours to our emergency fund or possibly put it into retirement.

  5. Great article! I wrote almost this exact same article last year, something 33 ways to productively spend it and I included the same little disclaimer. HAHA. Some people will get money back to matter what, because of credits. Anyways, great list! The important thing is to use it well and not let it drain out of your account. And all these are good ideas for doing so. 🙂

  6. Anytime you can pay off debt, it’s a great feeling. I used to use my refunds to invest, and still do. If I need the refund for a vacation, and would not have the money otherwise, I should stay home…

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