01 Feb 2007 10:04 PM

How Are You Going to Spend Your Tax Refund?

by Miriam Caldwell | More from this Blogger

     

What are you planning on spending your tax refund on? There are several options available for you. No matter what you decide to do, you need to exercise caution as you use this money so that you do not spend more than you actually receive back.

One option you have is to pay off part of your debt with your tax refund. It can be satisfying to see large amounts of debt quickly eliminated. It is important that if you do decide to pay off your debt, that you do not simply rack up more debt for next year. You can adjust your withholdings to get your refund back in your paycheck spread out over the year. This will help you if money is tight.

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You can save the money that you receive. It can go towards your emergency fund, your retirement or your child's education. You can use it to open a mutual fund account, and really allow interest to work for you instead of against you. You can save it for the down payment of your home or to put towards the purchase of a new vehicle in a year or two.

You can go ahead and spend it all. It is easy to spend money, and you can quickly use it to buy the new big screen television that you have been eyeing. You could also use it to fund that trip to Disney World you have been planning to take. You could splurge and do something fun for each member of your family.

Or you may be planning to spend it on practical things. You can visit the dentist or get new glasses. Your car or home may need new repairs or you can finally get the new washing machine. You may use the money to fund your children's extracurricular activities.

Depending on your financial situation you can make the best choice for your family. I would suggest doing a little bit of all four things. You can put a large amount towards debt repayment, and some in savings. I do advocate spending a little of the money on something fun for the family. You can find the right balance for your family.

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Adjust Your Withholdings for the New Year

Don't Lose Money on Your Tax Refund

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Learn more about Miriam Caldwell

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Miriam is a SAHM mom of three children. She has a daughter who is five, a son who is two and a new baby boy. She loves being a parent and spending time with her children.

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5 comments so far

Julie Gentry (5734) 01 Feb 2007 11:49 PM

Half of ours is going to a credit card; the other half will be used to add to my stockpile :-). Just came back from QFC with almost $200 worth of food for $30. We're using the tax money for the "extra" sales.

What are you going to do with yours?

Miriam Caldwell (7407) 02 Feb 2007 07:03 AM

I think that we are going to use most of it towards debt, some towards our emergency fund. We are also thinking about getting a freezer so we can start stockpiling. Maybe we will take 50 and go out to eat at a nice restaurant. That is about it.

Sara Denomme (1063) 02 Feb 2007 08:26 PM

Our tax returns are going toward home remodling. We do it every year. We also want to save some for our wedding. whenever that will be LOL We will probably use some for a vacation as well.

miraclebaby06 (16488) 02 Feb 2007 09:03 PM

we are paying off debts and putting advices on utilities. we are also hoping to get a new computer and get some things weve been wanting/needing and the rest is going in the bank

Miriam Caldwell (7407) 03 Feb 2007 08:24 PM

It sounds like you are all being pretty wise with the money that you will get back! Enjoy the fun stuff and be happy about getting rid of the debt ; )

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