18 People Tell Us How They’re Spending Their Tax Refunds This Year
Tax Day is right around the corner — only two and a half weeks left to get those returns filed! I know it’s a normal and expected part of adult life, but taxes are…beyond stressful to me. I have a relatively irrational fear of making some huge mistake on my return and unwittingly ending up in jail because of it. And I’m pretty good about money — I make big deposits in my savings every month, and I pay my fiance for my portion of the rent weeks before it’s actually due. But for some reason, I always do my taxes at the very last minute. I’ve even — gasp — filed an extension before to give myself some time. (This is always an option, but just make sure you’re smart about it.)
I think part of the reason doing my taxes stresses me out so much is because I don’t always get a tax refund. In fact, in my years as a freelancer/contracted employee, I’ve usually ended up owing something. When I have gotten a refund, I’ve either a) used the whole thing to pay off credit card debt or b) put the whole thing in savings. Not the most exciting uses, but definitely worth it!
In this week’s episode of Making It Work, one contributor breaks down how she spent her whole tax refund — and whether each item on her list was worth it:
Tax refunds sometimes feel like “free money,” but of course, there are many responsible ways to use that slight influx. To give you some ideas, we reached out to the TFD community to hear how others are spending (or saving!) theirs. Here’s what they had to say:
1. “Wedding dress! I’ve never worn a really nice dress, not to an event or prom or anything, so my tax refund was my dress budget!” – Taryn
2. “The majority of it went toward paying off debt, and I tucked a little bit away for savings.” – Elise
3. “Jumpstarting a savings account for a car! Mine will need replacing in a few years, so I’m socking away money now with the goal of buying a new one with cash.” – Maggie
4. “Having it go directly into my savings!” – Ashton
5. “Just used all of it to pay down debt.” – Chris
6. “I tend to just keep it simple and pay off my remaining credit card balance and split the rest evenly between my checking and savings accounts.” – Carmen
7. “I only got $96 back this year, but it still went right to my savings account. But overall I got more in my paychecks in 2018 because of the tax changes, so this helped me boost my savings rate a bit more throughout the entire year. Win in my book.” – Invested Wallet
8. “We used ours to pay off a 0% loan on an HVAC that we sold nearly 2 years ago.” – Melissa
9. “We’re getting married this year, so we’re scrounging together everything we can. Most of my tax return went directly towards that. I did set aside a little bit to spend on a trip to visit a friend in San Francisco as well.” – James
10. “It all went straight into my emergency fund.” – Isabella
11. “A smidge went into my travel fund and the rest to student loan debt. Sigh.” – Shabana
12. “As a bartender who works for tips, I very rarely get any money back on my return — I usually owe over $1,000. This year, I’m getting back $400, and I rented a cabin for two days with friends and going for my birthday!” – Sandi
13. “I started an IRA with my tax refund!” – Crystal
14. “Paying off debt baby. $1,500 down.” – Laura
15. “A tiny little shopping spree on some new shoes for spring and the rest to my savings account! If I pretend that it’s not real money it can go right to savings and sit there for when I need it.” – Lydia
16. “We used all of ours to pay off the remaining balance on our hospital bill from when our daughter was born. Sad, but buh-bye monthly payment!” – Lunashine
17. “I spent it mostly on my trip to New Orleans — I went for a week over Mardi Gras and shared an Airbnb with several friends.” – Victor
18. “I’m putting it towards a mini graduation trip with 2 of my grad school friends! I’m just using it for the Airbnb and possibly a new bathing suit and then putting the rest in my savings.” – Hailey
Image via Unsplash
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