Tax refunds: Avoid the urge to go on a shopping spree

Want a new car? Granite kitchen counters? Money for vacation? How about paying down debt?

What to do with your tax refund

RICHMOND, VA (WWBT) - Is that tax refund already burning a hole in your pocket?

Fight the urge to blow it on a shopping spree. It’s basic instinct to look at your tax refund as a windfall - something to use to splurge on that vacation or fancy new car, maybe finally buy granite kitchen counter tops.

But if you remind yourself what a tax refund really is, it could reign you in. Basically, you gave the government an interest free loan and the government just gave you your own money back.

Cherry Dale with the Virginia Credit Union says when that refund check arrives, put it away for a week or two. If you get the money direct deposited, move it to savings and let it sit for a week.

"Really think about what you are going to do with that and how it’s best going to benefit you financially with your financial goals,” Dale said.

She says the smart thing to do would be to take some of that money to pay off a little debt before you buy something. She says you’ll then feel better about using the rest for one of your goals, such as a home renovation or vacation.

Dale encourages you to start comparison shopping during that week you let your money sit to make sure you’re getting the best deal possible and so you stay on budget.

Of course just leaving that money in your savings account isn’t a bad plan either.

According to a Bankrate.com survey, 66 million Americans have nothing in their savings for an emergency.

If your car breaks down or you get a surprise medical bill that savings account could be a lifesaver.

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