When the deadline to file your taxes arrives, it is time to wait for your refund check.
"The average refund in recent years has been around $3,000,” Personal Finance Expert Gail Cunningham said.
Unfortunately, not everyone spends that money responsibly. Cunningham said most people will splurge. People will buy things they want, like a new smartphone, a bigger and better television, a new wardrobe, etc. However, no one said you can't spend a little green on yourself.
She said, “Reward yourself because it's your money. You've worked hard for it, you've earned it.”
Just be smart about how you spend it. It only comes around once a year.
“I would suggest, of course paying down debt,” Cunningham said.
So, look at how much you owe and figure out how much you can pay towards your debts. Sure, it won't be something new and shiny, but you will feel great with your payments are reduced or the balance is zero.
Another way to use your tax refund is to just save some of it.
“So many people have zero safety net when it comes to savings and it's not a matter of when or if the emergency will come in the long,” she said.
Emergency situations will happen and usually at the worst possible time. So, if you are not prepared, you are left with poor choices, like going into more debt.
You should also consider spending the money on maintenance for your vehicle and home.
But if you have the urge to splurge, spend it in a meaningful way. Maybe put some of the cash towards a summer vacation, so the tab won't end up on a credit card later on. Another idea, get your kid some braces, but only if they need some. You could also put it towards a college fund for your kids, but don't forget about yourself. Put some of the money towards your retirement plan.
Either way, just make sure you are looking at the bigger picture.
“You know, a person who responsibly manages their money is constantly thinking short term and long term,” Cunningham said.
Also, don't rely on your refund since the amount can change each year. In fact, Cunningham said you shouldn't want a refund check.
“What that is, is Uncle Sam giving them back their hard earned money without the benefit of interest,” she said.