If you haven't started doing your taxes and aren't sure if you're even getting a refund, H&R Block has a free calculator that shows what you're likely to get back.

1. Shake off some debt

Golden Retriever shaking off water
Lorenzo Patoia / Shutterstock
A tax refund is a good opportunity to shake off some debt.

The best use of a tax refund is often the simplest: Pay down your credit cards, student loans or other bills.

The best return on your money is often found in debt repayment. Do the math! A typical credit card can have you paying out at least 15% in interest per year.

It might not be the most exciting idea for your tax windfall, but you’ll thank yourself later. Paying less interest and not worrying about your debt is a win-win!

Your taxes, your way. Do it yourself, get expert help, or hand it off start to finish. 30% of Americans who file electronically file with TurboTax.

Get started

2. Sleep on it

Customer girl is posing playfully in time lying on new mattress in the store.
Iakov Filimonov / Shutterstock
Take your refund and buy a new mattress. You probably need one.

Chances are you need a new bed, or maybe a new mattress. If the last time you replaced yours was a couple of presidents ago, you're due.

The National Sleep Foundation says you need a new mattress every seven to 10 years. We spend at least a third of our lives in bed, so it pays to invest in a comfortable spot to lay down your head.

The quality and affordability of mattresses have improved a lot in the last five years, thanks to increased competition. Mattresses can now be ordered online and sent to your door, but you may want to try them out in a showroom first.

3. Get ready for anything

Financial concept, A malaysia ringgit coin in transparent glass bottle isolated white background with word label Emergency
Aku Alip / Shutterstock
Take your refund and start or beef up your emergency fund.

Having a major expense fall into your lap can be a nightmare. But 1 in 4 of us has no emergency savings.

If making monthly contributions to a rainy-day fund would be a struggle for you, a tax refund is a great way to jump-start a savings plan. You’ll thank yourself later.

Why stress over money when you can build a buffer? Just make sure to put the money into a savings account that’s available in a pinch and earning some interest while you wait.

It seems like a tricky time to get into real estate, and being a landlord isn't as passive as you think. Look at these low-stress options instead.

Read More

4. Do some remodeling on your home

Funny attractive couple playing with color brushes while painting home
didesign021 / Shutterstock
Using refund money to repaint or otherwise improve your home is a great way to improve your financial future.

Your home may be the largest financial asset you'll ever own, and it can effectively become a major source of retirement savings. Using refund money to improve your home is a great way to improve your financial future.

Adding energy-efficient features and beautifying the outside or inside of your house can give you more enjoyment now and boost the home's resale value down the road.

Investments in the functionality or curb appeal of a home can wind up being worth far more than the money spent. At the very least, you’ll live in a beautiful and comfortable home for years to come!

5. Do some remodeling on yourself

Group of young people doing yoga lotus pose in the class with windows. Fitness, sport, training and yoga lifestyle concept.
ZephyrMedia / Shutterstock
Make an investment in yourself and your future by spending some money on self-improvement.

Instead of blowing your refund on a new wardrobe or a fancy smartphone, consider making an investment in yourself and your future.

Spend some money on self-improvement: Take a class to learn a new skill or sign up for training to upgrade your professional credentials.

Using the money to better yourself might pay off in a better job, a bigger paycheck or a healthier you. So, the return on investing in yourself can be great.

6. Send the money off to work

Financial data on a monitor. Finance data concept.
isak55 / Shutterstock
Use your refund money to make money — by investing it.

A diligent investor in the financial markets might easily achieve a comfortable retirement with monthly contributions, efficient tax planning and professional advice. But many of us never take the time to start.

Compound interest is a powerful tool to save money and earn an income from your portfolio. Opening your first investment account with a tax refund is a great way to get a head start.

If you want to put money into stocks, avoid picking individual ones until you have at least $1 million. It’s much better to play the market using mutual funds and exchange-traded funds to spread your risk.

7. Give your windfall away

A disaster relief check being written for one thousand dollars.
jabiru / Shutterstock
A tax refund can allow you to help a worthy cause.

Tax season is a good time to reflect on society and this grand experiment we call humanity. While it’s tempting to pocket your refund, it’s also a good opportunity to help a worthy cause.

Many organizations need funding to do their good work, and it often takes hundreds or thousands of small donations to make things happen.

Whether you give money to a friend in need or a local charity that supports a cause you love, your tax refund has the potential to do a lot of good.

8. Have fun! (You're allowed!)

Couple on a tropical beach in the Maldives
Netfalls Remy Musser / Shutterstock
Take a trip, go on a “staycation”, or treat yourself to a nice meal with your refund dollars.

Go ahead and live a little with your windfall! But before you hit the mall, think about better ways to spend the money, other than on stuff.

Do you really need more stuff? Seriously?

Experiences and the memories you create are usually more rewarding than purchases like clothing, jewelry and electronics. Throw a party, take a trip, or just go on a relaxing “staycation” close to home.

Are you thinking about saving? Well, stop thinking about it!

Take the change out of your piggy bank and make it work for you.

Acorns is a financial wellness tool that automatically rounds up your card purchases to the nearest dollar and puts those savings into an investment account. It takes the worrying out of investing and matches you with one of five investment portfolios.

Take five minutes to sign up for Acorns today and collect a $10 bonus.

About the Author

Tom Huffman

Tom Huffman

Freelance Contributor

Tom was formerly a freelance contributor to MoneyWise.

What to Read Next

How to file your taxes for the first time

It's not so difficult if you're organized and follow these helpful guidelines.

A paper weight around the IRS’ neck could delay your tax refund

Paper forms, manual data entry are extra problematic this year with more complex returns.

9 Overlooked Tax Breaks and Deductions

Arm yourself with a little knowledge so you don't leave cash on the table.

Don't let child tax credits and stimulus checks trip up your taxes in 2022

Here's what you should know to prevent any hangups and get your refund on time.

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.