February 27, 2026: Do These With Your Tax Refund and You’ll Be Better Off

This weekly newsletter will be short, sweet, and actionable. We are all in the midst of filing our income taxes. For those of you who are fortunate enough to get a refund (i.e., provide an interest-free loan to Uncle Sam), here is what you can do with it.

Your future self with thank you if you:

• Pay off high-interest debt, typically credit cards, car loans, student loans, etc.

• Build your emergency fund. A rule of thumb is at least 3 to 6 months of expenses.

• Pay to fix or maintain critical assets like your health, home, and vehicle. Neglecting these can turn minor issues into major ones. Health is the most valuable asset we have.

• Contribute to your “sinking fund” for an upcoming large purchase (e.g., new car, vacation, home renovation)

• Contribute to your Traditional IRA or Roth IRA

• Contribute to your Health Savings Account

• Contribute to your child’s 529 college savings plan

• Contribute to your taxable investment accounts

You may be tempted to spend the refund as soon as it comes in. Although saving isn’t the most exciting thing to do with your refund, the thrill of purchasing something else with your refund will be gone quickly.

I like to remind people that saving is actually “spending” and what they are buying when they “spend” on a retirement account is financial security and freedom in the future. So spend wisely.