Don't Waste Your Money: Best and worst ways to spend tax refunds - Toledo News Now, Breaking News, Weather, Sports, Toledo

Don't Waste Your Money: Best and worst ways to spend tax refunds

Posted: Updated:
(Toledo News Now) -

Tax season is finally at its end. If you received a refund, do you know what you want to do with it?

If you're owed a refund, you probably have it by now, or are expecting it within the next couple of weeks. Now comes the hard part: What do you do with it once it's in your hands? The average refund is now almost $3,000, according to the Internal Revenue Service, and you don't want to blow it. 

Save, But Spend A Little 

Dreaming of a warm, sunny beach? A plane trip to an exotic city? There are so many ways to spend that tax refund. 

But before you regret it, Smart Money has listed the following suggestions: 

-Create an emergency fund to help pay six months of bills if you lose your job. 

-Pay off some of your debt, such as a credit card bill with a 20 percent interest rate.

-Contribute to an IRA or a 529 college savings plan. 

-Splurge a little bit. Take a short vacation or buy that 50-inch HDTV you've been wanting. 

Doesn't That Stink? 

But from the "doesn't that stink" file comes the worst thing to do with your tax refund. 

Bankrate says the worst use of a refund is for short-term thrills, like a big night out at the bars with friends, or a night at the casino.

The Bottom Line 

Pay yourself first. Then pay your creditors. 

Don't be so hard on yourself that you refuse to reward yourself for a year of hard work. 

Just spend wisely, so you don't waste your money. 

Copyright 2013 Toledo News Now. All rights reserved.