This Day On The Street
Continue to site
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 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.  

2 of 2

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
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community


Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs