Getting A Tax Refund? Wait Just A Minute!

Feb 17, 2023 Personal Finances

Making a plan for your tax refund is a sure way to help your financial situation and keep you from making an impulse decision you’ll regret.

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According to the IRS, the average tax refund issued last tax season was $3,253. Additionally, many Americans spend the refund before it even arrives. Before buying new electronics or taking the family on a fabulous vacation, consider taking a pause. Given the economically challenging times we face, it may be best to take a more practical approach to designating the funds.

Making A Thoughtful Decision

During the time between receiving your refund and deciding what to do with it, think about the options that make the most sense for you and your family. Take yourself out of the psychology of the “feel good” cycle where spending the refund in one fell swoop provides instant gratification, and give yourself space so you can make a clear decision when you’re ready.

Most taxpayers surveyed by Jackson Hewitt in March 2022 say they’ll immediately spend their refund on essentials like groceries, rent, utilities, and bills. If this is the case for you, then kudos for prioritizing the essentials. However, if this isn’t you and you’re in survival mode this year, it may be a good idea to reexamine before finalizing your decision.

On the other hand, if you’ve been hunkered down, paying off debt, getting caught up on bills, and putting away money here and there in savings, you may feel like you’re getting ahead with your finances. With so many options available — paying bills, building savings accounts, investing, or remodeling your home — how do you know what the best move is? Taking a more practical approach, particularly this year, may be wise when deciding what to do with your tax refund.

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Are you in survival mode? If so, consider using your refund to:

Do you feel you’re getting ahead of your finances instead of behind them? Here are some ways you can keep the momentum going:


Making a plan first is the absolute best thing to do when you get lump sums of money. The plan might include using a portion to build up an emergency savings account, putting some towards debt, and taking an incremental amount to buy something small and frivolous for yourself. The key is to be mindful about how you’ll spend sums of money before you have it.


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Life Guidance for:


Ready to take control of your finances? See what steps to follow to develop a spending and saving plan and follow through on it.

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