This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Questionable Uses For A Tax Refund

The alternative: Make a list of all of the things you've wished you could purchase outright during the last year, and carefully select something from it. You're less likely to overlook other, more useful purchases this way. Even then, once you've reached a decision, it couldn't hurt to sleep on it.

A phone on its own may not be an unwise purchase, but a new phone is often cheaper when you agree to extend your contract at the same time, and it may also require a more expensive data plan. Using your refund to heighten your financial obligations in the future is no way to get ahead.

The alternative: If your phone truly needs to be replaced, make sure that your new plan won't overextend your monthly budget. If that's not possible, consider giving your old phone a tune-up by transferring your old photos to your computer and deleting your rarely used apps. This won't make your phone new, but it's unlikely to wreck your finances either. 

Sure, all of the items above can result in your refund evaporating quickly. But most of them will still yield a decent story. Letting haphazard spending habits erode your refund as it sits in your checking account is a great way to end up with no money and no real tale to tell about how you spent it.

The alternative: If you suspect your refund may fall victim to checking-account overspending, have it direct-deposited into your savings account instead. While you'll still need to exercise discipline to avoid spending it, it will at least enjoy a buffer from your debit card.

As pleasant as it is to receive a refund, adjusting your tax withholding status to prevent future refunds has its advantages. No, you may not get a lump sum each spring, but investing the extra money you get in your paycheck in a high-yield savings account or certificate of deposit allows your funds to earn interest throughout the year.

Although deposit yields remain at historic lows, shopping around can still result in a reasonable return. And if you've already abstained from throwing a legendary party and spending an afternoon at the horse races, you deserve every penny you're entitled to.  

null
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs