What To Do with a Tax Refund

So far this year, the IRS has delivered more than $200 billion in refunds. The average refund was $3,011, a 4.6% increase from last April’s average of $2,878.

If you did receive a refund, what to do with that cash? Here at Sonder, we know your unique personal situation means the right answer will vary and could also change on a moment’s notice (like if your car suddenly starts making strange noises or your washing machine won’t spin anymore).

Here are three plans to consider:

• The 50/50 plan! Spend half on something that makes you happy. This could be a long weekend getaway to your favorite destination, over the top barbecue grill, new camping and outdoor recreation gear. Also consider a series of workouts with a personal trainer, golf, ski or tennis pro lessons or hire a doggie obedience coach. The other half gets socked away to your rainy day fund, or goes to paying down debt.

• Sleep better at night plan! You know your furnace or boiler (or other major appliance) is ancient, inefficient and could die at any moment, but you just tune it out. Instead, get proactive. Get estimates on its replacement and use the refund cash to move forward, start savings towards that repair.

• The we haven’t had a real vacation in several years plan! The health benefits and the energy you will return home with will exceed your expectations, says the Harvard Business Review’s Rebecca Zucker. This is a great read on why vacations are so important to our well being and careers.

Whatever you decide to do, don’t stall or you might find those dollars can easily get spent on day to day purchases.

Sources:

https://www.irs.gov/newsroom/irs-delivers-strong-2024-tax-filing-season-expands-services-for-millions-of-people-on-phones-in-person-and-online-with-expanded-funding#:~:text=The%20average%20refund%20was%20%243%2C011,Improved%20phone%20service.

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