8 Ways To Spend Your Tax Refund

Posted on Jun 22, 2021

529 Plan

The average federal tax refund so far this year is $2,856 – up from the average for 2020. But instead of using the money for a summer vacation, many people who lost income because of the coronavirus pandemic will need to use their refunds to pay the mortgage or buy groceries.

If you're fortunate enough to have the essentials covered, you may be tempted to treat yourself to takeout from your favorite restaurant or a nice bottle of wine. Fine. But once you've scratched that itch, consider these ways to put the rest of your tax refund to work for you.

  1. Shore Up (or Start) Your Emergency Fund
  2. Pay Off High-Interest Debt
  3. Save for Retirement
  4. Support a Worthy Cause
  5. Invest in a 529 College Savings Plan
  6. Protect Yourself from Unexpected Health Care Costs
  7. Protect Yourself from Natural Disasters
  8. Upgrade Your Home Office