6 Ideas of What To Do With Your Tax Refund

Getting a tax refund? You’re not alone. 

Most Americans overpay their federal taxes each year. The IRS issued 104.8 million tax refunds in 2024, and the average individual refund for 2023 was $3,004!

It’s tempting to look at this refund as a windfall. While there’s nothing wrong with using your refund for a vacation, tickets to a sporting event, or a shopping spree, you may want to consider using your refund to:

• Prepay Bills
  Get ahead by prepaying utility, insurance, or other regular bills to reduce future financial stress.

• Save for a Big Purchase
  Put the refund toward a down payment on a car, house, or another significant item you’ve been planning to buy.

• Pay Down Student Loans
  Target student loans with high interest rates to save money over time.

• Take a Course or Certification
  Invest in your education or career with a certification or course that boosts your earning potential.

• Focus on Wellness
  Spend on health-related items, such as gym memberships, therapy, or a medical procedure you’ve been putting off.

• Give Back
  Donating to your favorite charity can make a meaningful difference and may also offer you additional tax benefits.

It’s hard to resist the allure of doing something fun with your refund, but it's worth looking at your overall financial picture for other priorities before the money is gone. 

Still waiting on your refund? You can visit the IRS's Where's My Refund? tool to see when you can expect it.