This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Ways To Blow Your Tax Refund Wisely

WASHINGTON ( TheStreet) -- Tax refunds shouldn't come with a scolding, and the average $3,164 refund being handed out by the IRS this year is no exception.

For much of the economic downturn and recession that preceded this year's tax season, taxpayers were repeated the same line when they asked what they should do with their tax return: Pay down debt, put it into an IRA or mutual fund, save. Contrary to the prevailing sentiment, however, not everybody spent the early 2000s popping Cristal, building McMansions and bedazzling their clamshell cell phones with diamonds while their jobs hung by a thread. Those who saved, lived within their means and held down jobs while their neighbors applied for every credit card that came with a free T-shirt while still collecting unemployment may feel entitled to use their refund on something borderline frivolous this year, and don't need their self-righteous neighbors who recently found financial religion telling them what to do.

According to the National Retail Federation's 2011 Tax Returns Consumer Intentions and Actions Survey, conducted by BIGresearch, of the 66.2% of Americans expecting a refund this year, 42.1% will sock their refunds away -- up from 40.3% last year. Meanwhile, 41.9% will pay down credit card and mortgage debt.

That perfectly OK, we guess, but it seems like the 13.2% of Americans who are going to spend their refund on a big-ticket item this year, up from 12.5% last year, will have a lot more fun.

"Despite the difficult unemployment situation across the country, Americans receiving a tax refund this year seem eager to plow this money back into the economy," said NRF President and CEO Matthew Shay. "With sales momentum continuing to build, NRF is becoming more bullish about the economic recovery."

The national unemployment rate dropped from 9.8% in November to 8.9% last month, with 27 states reporting increases in jobs from last year. It couldn't come at a better time, either, as the Consumer Confidence Index fell 8.6 points in March based on worries about inflation and increasing gas prices. Simply put, new workers and thrifty recession veterans, your economy needs you.

With that in mind, there are several ways to spend that tax refund without getting stuck with a piece of technology that will be obsolete by the holiday season or a car that seems fuel-efficient now but will suck up gas like the space shuttle once prices top $4 a gallon. Here are five ways to take that $3,164 shopping while still spending wisely:

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
DAL $43.91 -3.00%
EXPE $98.75 -2.10%
LUV $40.53 -3.10%
UAL $59.22 -2.80%
LCC $0.00 0.00%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs