This Day On The Street
Continue to site right-arrow
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!

4 Ways to Improve Your Life With a Tax Refund

NEW YORK (TheStreet) -- You may already have received valuable tips on spending your tax refund, but in this case more is better.

Pouring your refund into a retirement fund, credit debt repayment campaign or straight into the stock market are all good ideas. But they're not the only ones, and Philadelphia's East River Bank has a few additional ideas to handle that "nice little payout" that could be coming your way from the IRS pretty soon.

In general, bank executives say to keep it simple with a tax refund, and always use it to improve -- not damage -- your personal finances.

"A tax refund is a great opportunity to re-invest your money wisely," says Christopher McGill, president and chief executive of East River Bank. "Make sure to invest in ways to improve your financial position for today and the future."

McGill estimates that 75% of Americans earned a tax refund last year. He advises those getting one this year that while they should pay down debts first -- he calls that the "smartest decision" -- they might do it by following the "rule of thirds." In this model, here's how the refund gets used:

  • One-third toward debt, especially credit card debt.
  • One-third into retirement savings such as an IRA or 401(k) plan.
  • One-third just for you, even on a pleasure purchase.

But instead of buying a "frivolous" expensive handbag or a new set of skis, McGill and the bank suggest steering the money into a personal item or experience that is rewarding over the long haul. One example of that could be a new bike, which costs less than skiing and can keep you healthier, keeping health care costs down.

Instead of spending your tax refund drip-by-drip at a local Starbucks, go ahead and buy yourself a nice espresso machine that will pay for itself over time and save you money while still keeping java flowing through you on a regular basis.

You could also se your tax refund to enhance your job prospects by using some of the cash for continuing studies programs designed to make you more money in your career and make that career more fulfilling.

If you don't have life insurance (and you should, especially if you have children or a dependent spouse), apply some of your tax refund to a life insurance purchase. Taking care of your dependents will allow you to sleep better at night.

Select the service that is right for you!

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!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • 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