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So, are you special? Are you one of the nearly 96 million Americans who received a tax refund in 2019, according to the IRS? The number of people receiving refunds should be similar this year. The average refund, according to the IRS, was $2,725 in 2019. What to do with that tax refund check or any cash windfall including a stimulus check? Oh, the options are endless. Here are 10 immediate (and long term) smart tax refund ideas. Start down the path of becoming a self-made millionaire by using your cash windfall wisely!

It might be worth putting a portion of the refund into each main category. Based on our theory of financial independence, there are three key money categories to focus on: paying down debt, saving money, and investing money.

At the end, don’t forget to splurge….go get that Starbuck’s coffee! You earned it.

How to spend your tax refund to pay down debt, increase savings and invest in order to gain financial freedom #goalachievement #taxrefundideas #financialindependence
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Paying Down Debt

There are a few theories on how to pay down debt.

You might start by paying down the debt with the highest interest rate.

Compounding interest is an investor’s dream. Compounding interest is a debtor’s nightmare.

Quicksand is similar to compounding interest on debt … nearly impossible to escape.

The other option is to finish off a loan.

Finishing off a loan is immediately gratifying.

Here are a few tax refund ideas for gratification to make being a responsible adult feel a little better.

1. College Loan Debt

Put some extra money towards the base (principle) amount and start seeing your loan shrink.

2. Credit Card Debt

Credit card debt is probably the worst kind of debt after owing money to the mafia or to one of those shopping mall get money quickly stores. Payoff those credit cards now and feel so much better.

3. Make an Extra Mortgage (or Car) Payment

Give yourself a cushion, a little bit of an emergency plan just in case things go sideways. It is always nice to know that if you are having financial difficulty one month that you are not going to lose the house.

Saving Money

If we can save money, it prevents the likelihood of going into debt in the future. Here is a starting point for your list of items that you know might come up this year or next.

4. Fund Your Emergency Plan

Everyone knows you should have at least 2-3 months of income saved for an emergency, but how many people actually do it? Now is the time to start. Please fund your emergency plan. It is so important.

Having an emergency fund makes life a little less stressful.

5. Holiday/Birthday Fund

The bills after the holidays can be rough. Pre-fund it, so there is less stress next December. You will thank yourself later.

Another option is to create a birthday fund. Those birthdays creep up on you during the most inconvenient time.

6. Vacation and Camp Fund

Summer is coming and camps and vacations are expensive. Yes, there will be a time in the future for vacation and camps.

Set the tax refund aside to send the kids to camp for a few weeks and enjoy the quiet.

It really is like a vacation at home.


We will continue to say that the best investment for your future is in yourself and your family. Investing is the best way to start down the path of becoming a self-made millionaire. Investing in your career can pay big dividends down the road.

7. Purchase a few Promotion Outfits

Career advancements will bring in more money than trying to save an extra few dollars every week using coupons.

If you are ready for that next step up the career ladder, dress the part.

Need more career tips. We have you covered with two awesome articles full of proven tips to impress your boss and finally get ahead.

How to get promoted at work with career work advice tips #careeradvice
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How to get promoted at work by impressing your boss with career work advice tips #careeradvice #impressboss
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8. Fund a Roth IRA

This after-tax funded IRA is a good place to sock away money for retirement! Feel good about being less dependent on social security in your “golden” years. Use the power of compounding interest to make your extra cash work harder for you.

9. Fund a 529 for the Kids or Yourself

Are you thinking about going to college? Start putting away money to make that happen. Make your dreams a reality.

10. Do Smart Home Improvements

Doing a few home improvements can really help the value of your home. Now, $2,725 won’t pay for a kitchen remodeling, but it can go along way on smaller projects. Even better, consider doing many low cost projects that can add value.

There are few things more gratifying than completing a nagging home improvement project.


Hopefully, these tax refund ideas get your creative juices flowing and you just don’t blow your refund on stuff. Use your cash windfall to start taking your next steps towards financial independence and possibly becoming a self-made millionaire.

Make this little windfall be meaningful.

On a side note, a tax refund means that you are willingly giving the government a tax-free loan.

It is better financially to adjust your withholding and be disciplined about saving money each month instead of getting a refund each year.

Just something to chew on. We know it is not as exciting as getting a big, fat refund check.

Pin this article for when that refund check comes in. Follow us on Pinterest for more great money ideas. Of course, sign up for our email. Below are some awesome reads.

Regardless of how you decide to spend your tax refund or other cash windfall, don’t feel guilty about it. It is your money and you earned it! Just try and use some of that refund responsibly.

Good Luck, WhipperSnapper Finance

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