Top 10 Dumbest AND Smartest Things You Can Do With Your Tax Refund

Photo Credit: JD Hancock

Top 10 Dumbest Things You Can Do With Your Tax Refund

  1. Pay for a refund anticipation loan – Pay hundreds of dollars to get your refund faster? Hmmm. You may as well pay the Government to cash out your retirement fund while you’re at it?
  2. Buy lottery tickets – Instead just give it to me. I’ll give you 30% back, while making you believe there is a chance you could win big.
  3. Waste it on a new car – New cars lose value as soon as you drive them off the lot…duh!
  4. NOT use it to pay down/off your debt – Continuing to pay interest on your debt while you waste it away on something meaningless is quite frankly immature.
  5. Have it prepared by H&R Block – Maybe it’s just me, but I have never walked away without feeling completely taken advantage of financially. I eventually learned my lesson. Sorry H&R Block, I gave you three chances! Like they say, 3 strikes and you’re out.
  6. Loan it to your broke relative – Just give it to them because chances are you will never see it again.
  7. Ignore the fact that you have ZERO dollars in your emergency fund – Hint: unemployment, medical emergencies, a bad economy, and that little thing called life will happen. It’s just a matter of when.
  8. Buy something that you think will impress your friends – The Joneses are not going to help you when your life comes crashing down. They will probably laugh at you though.
  9. Blow it all by throwing a party – Perhaps the most fun way, but definitely the dumbest if you have not prepared for your future.
  10. Drive down the interstate throwing it out the window $100 at a time – Believe it or not, a lot of people do this — I certainly used to!

Top 10 Smartest Things You Can Do With Your Tax Refund

  1. Not get one at all – The money you loan the government interest-free, could be earning you interest somewhere else.
  2. Pay off/down your debt – The absolutely smartest thing you can do in your life is eliminate your debt. ๐Ÿ˜€
  3. Build your emergency fund – Hint: Imagine you had 6 months of expenses saved up. Now imagine the economy tanking. How does it feel to be recession-proof?
  4. Grow your nest egg for retirement – Taking your retirement in your own hands instead of relying on social insecurity will make you look like a genius!
  5. Use it to pay 100% down on a reliable used car…if you need one – Buying a good used car can save you lots of money in terms of depreciation and interest.
  6. Prepare it yourself using Turbo Tax – We have NEVER been disappointed with this option. Now you can even do your Federal return for free online. For us – $50 versus WAY TOO MUCH $$ anywhere else. Way worth it!
  7. Give it to someone in need – If your financial situation is solid, why not give it to someone who is struggling if you can?
  8. Use it to help fund your kids college – It will be time for your kids to go to college before you know it. Wouldn’t it be nice to bless them with a nice education without the debt that usually comes with it?
  9. Use it to pay down your mortgage – If you have no debt, except for your mortgage, imagine how nice it would be to owe NO ONE!! Your income is COMPLETELY yours! What a feeling!
  10. Donate a portion of it to Love Drop ๐Ÿ˜€ – Okay so maybe this isn’t the smartest, per se, but changing lives a dollar at a time is definitely a lot of fun! I donate $30 a month, and get to watch events like this happen each and every month! For most people that’s a very small chunk of their refund.

About Brad Chaffee

22 Responses to “Top 10 Dumbest AND Smartest Things You Can Do With Your Tax Refund”

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  1. Ok I will be brave and be the first to comment and say I planned on doing #8 on the dumb list!!

    Having a game night at my house in a couple of weeks and I thought about how my tv is 19″ and no cable and no xbox 360 what kind of game night is that and what will people think of me!!

    Then I got another refund check for my insurance and seeing that money made me think about how dumb it would be to waste a good $1,000 on t.vs and games for 1 freaking night!! Needless to say im not going out and purchasing a new t.v to look good in front of my friends (the ones that dont know im a debt free loon) instead I am going to take both my insurance check AND tax refund and apply it to my snowball ๐Ÿ™‚

    Live like no one else so LATER you can live like no one else!

    • Brad Chaffee says:

      LOL! I have a debt free game I can send you! ๐Ÿ™‚ I admit it’s not as awesome as what you can play on an xbox360 though. LOL

      I have wanted an xbox360 ever since I sold mine back in 2008! Now more than ever since they released the Kinect thingy!

      “instead I am going to take both my insurance check AND tax refund and apply it to my snowball” That a girl!! ๐Ÿ˜€ Temptation is sometimes hard to fight off. I am certainly guilty of most of the dumb things I have listed above with exception of the lottery ticket thing. Haha!

  2. Wade says:

    Well, my wife and I are not completely debt free as we have mortgage and car payments to pay. With that in mind, we are planning on putting our tax return towards paying down some of this debt in pursuit of eventually living debt free.

  3. Crystal H says:

    OMG! I want an Xbox 360 too! But I am hoping to wait till my car is paid off. But Brad I totally see what you mean by throwing it away $100 at a time. I am so guilty of this. I’m gonna do a better job of watching out for this. And yes I did receive a call from a relative who is always in need of money. I have yet to call them back tho-LOL!

    • Brad Chaffee says:

      Me too Crystal! Haha! I sold mine when we decided to get out of debt. THAT WAS HARD! REAL HARD! haha! I’ve done all of the dumb things above except for the lottery and I have never been in a position to loan a friend my refund either now that I think about it. Now that I am a little smarter I would definitely just give it to them. Throwing money out the window $100 at a time has happened to many of my returns unfortunately. Ever since 2008 though, they have gone towards debt elimination and savings. ๐Ÿ˜€

      You should definitely pay your own debt off before helping a relative. My question to you: Do you hear from this relative regularly throughout the year or just at tax time. ๐Ÿ˜€

  4. Vicki says:

    The old me would be doing number 4, 7 or 8 on the dumb list. Thankfully, I will be doing 2 and 3.

  5. Will Lau says:

    As for smart tip #6, do one better and get StudioTax. It’s 100% free to use and file with. It’s fully audited and approved by CRA. I’ve been using it for the last 3 years and no problems encountered.

  6. Nunzio Bruno says:

    Wait wait wait wait! People throw money out of cars on the interstate and that is actually a thing that happens? That should totally be number one on the not-to-do’s lol. I think you have a pretty great list composed on both sides – this time of year is one of the few for most people that will allow people to better their financial situations in one lump sum type move. I am not opposed to rewarding yourself though – if you have been working really hard at achieving goals and you are then positive reinforcement can help keep the positive train going. http://www.financiallydigital.com

    • Brad Chaffee says:

      LOL Nunzio!! Not against reward either. I just think that when you have a dire financial situation, rewarding yourself for working hard to get out of it prematurely is a recipe for disaster. People seem to reward themselves a little too early if you ask me. With that said, I would rather someone reward themselves, as opposed to jumping off of the plan all together because they are burnt out -0- as long as they jump back on that is. LOL

  7. David Willis says:

    Love. This. Post. Fortunately I will be doing none of the dumb things this year. I did my time in stupid camp. Learned my lesson. Those days are gone. Paying down the debt. Looking forward to having a small party when I don’t owe anyone anymore! It will be a while, but we are on the way!

  8. RW says:

    I’d also add to the smart list doing things to your home to improve energy efficiency. You benefit from lower heating/cooling costs, and get a credit on your taxes. I just had my attic insulated and can notice a huge difference in things already, and the cost was under $1,000.

  9. Sass says:

    Mine is definitely going toward debt repayment. That should take a nice hunk out of it and make my goals a little easier to achieve!

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