10 Ways You Should Not Be Using Your Tax Refund

Tax Refund check

First and foremost, we have to say two things about tax refunds. The first is that not everyone gets one, and some of us have to pay. The second is that a refund is not necessarily a good thing. It means you are giving the federal government too much of your money throughout the year, and you should not be doing that. With that said, millions of people get a refund every single year. Depending on your tax situation, it might be a little and it might be a lot. Regardless, however, there are a few things that you should do with this money that will really help your financial situation. The first is pay off your debts. If you have debt, you should pay it off. It will make your finances so much less stressful all year long. You should also use it to create an emergency account for those unforeseen emergencies or to pad your savings. But what you should not do is waste this money – especially if you cannot afford to waste it.

Plastic Surgery

Let’s be serious here; you do not need to spend your tax return money on a breast augmentation or a nose job or Botox. What a silly and frivolous way to spend your money. First of all, we’re not all about ruining your natural beauty. But even more so than that, we are not into ruining your natural beauty by paying for things you can’t afford without your income tax return money.

Drugs and Alcohol

Must we even elaborate on this one? The worst thing you can do with any money you have is spend it on things that are dangerous and not useful to your life. These are things that are a huge waste of money, brain cells and even your own personal safety. It’s time to stop spending money on these things and spend it somewhere else.


A trip to Vegas or the local casino is not the way to use this money. You’d be better off saving it or using it to pay for college or something along those lines. You should not gamble away this money so that you have nothing left. Save it; use it for something useful like house upgrades, but do not waste it on gambling.

Shopping Sprees

If you can’t afford to go shopping throughout the year, perhaps you should save this money so that you can buy what you need when you need it. Getting some money back and wasting it on things that you don’t really need is not a good idea. If you can’t afford to pay for designer shoes or bags on a regular basis, don’t buy them now.

Down Payment on a Car You Can’t Afford

If you want to pay for a car with your tax refund, that’s actually a smart thing to do. However, you should not use this money to make a down payment on a car you can’t actually afford to make payments on throughout the rest of the year. A better idea is to use this money to pay cash for a car that you can rely on and drive without making payments for the rest of the year or longer.

Splurge on Things You Can’t Afford

If you can’t afford to buy the things you want throughout the year, you shouldn’t use your tax refund money to buy them now. This is just a silly way to spend this money when you could just save it. This will help you be able to afford what you need when you need it, instead of using the mindset that you have money so you might as well buy things you can’t really afford to say you did.

Take a Vacation You Can’t Afford

Okay, if you have no debt, you make decent money and you’re living within your means, you save, you have an emergency fund and you get a tax refund, you might want to splurge and use this as your vacation money each year. Travel is nice, and there is nothing wrong with using this money to travel so that you have no debts to incur. It’s responsible. But if you have debts or no savings, you shouldn’t pay for a vacation with your money.

Not Using it for Needs

We all have needs in life. Some people need a new engine in their car or a new air conditioner or refrigerator in their house. If you are not buying the things that you need in your life, you are wasting your money. You should buy what you need so that it is taken care of and you have nothing left to worry about.

Leaving Debts Unpaid

If you have debts, pay them. The best use of this money is to pay down money you owe to others. This is what is going to improve your credit, make it possible for you to live a financially free life and really enjoy yourself. What you should not use it for is anything that is not related to debts. You shouldn’t shop and leave a card unpaid. Pay off that debt and live the good life. It’s the best way to use your income tax refund.

Buying Things You Don’t Need

So now you have money you don’t usually have. That does not mean you need to go out and buy things you don’t need. If you have a television that’s nice already, you don’t need to go out and buy a new one just because it’s a little bit bigger and you need to keep up with someone else in your life with a bigger television. You know what you could to with this money? You could save it so that you can put a new roof on your house, send your kids on their next field trip or just so that you can have it in case of an emergency of some sort. It’s a nice concept, so go ahead and try it out.

Photo by Mark Wilson/Getty Images

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