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TheStreet Open House

5 Ways To Blow Your Tax Refund Wisely

Stocks in this article: JBLU AAI M SHLD HMC

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:

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