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If you’re one of the lucky people to receive a tax return, before you spend the money frivolously or just throw it in the bank, consider some alternative options. Although it would be nice to book a plane ticket for a vacation or buy something expensive and shiny, there are more responsible options that will be more beneficial to your financial health and well-being for the short and long-term. 

Pay off debt. 

Use your tax return to allocate toward paying off any debt you may have. This could be credit card debt, student loans, medical debt, and beyond. Using this money to put toward some of your debt will help you with paying it off quicker. Start by putting money toward the loan with the highest interest rate. 

Invest

According to CNBC, 74% of Americans received a tax return in 2020. That’s three quarters of those who filed! With Tax Day just days away, if you’re receiving a refund, it’s time to consider your options. 

Add it to your emergency fund. 

Everyone should have a “rainy day” emergency fund built up with three to six months of expenses for those unplanned occurrences in life. It would be rational and financial responsible to add your tax return to this fund to supply extra cushion and comfort.

Pay off debt. 

Whatever it may be - credit card