It's easy to see a tax refund as some kind of gift from the universe. It's not. It is a chunk of your annual income you should have been seeing in your paychecks all along. Plan now for how you'll manage it, or your refund could easily evaporate into thin air!
TREAT IT LIKE A PAYCHECK. Give away 10 percent, save 10 percent and put the rest into your bank account. This would be especially advisable if you are having trouble keeping up with your current financial obligations.
STASH IT. Put it in your Contingency Fund (a pool of money you keep in a safe place for serious emergencies) or freedom account. Don't think twice. Just get it into the bank quickly before you are tempted to pick out a new TV or book a vacation abroad. Money in the bank lets you back away from the edge, whereas buying more stuff does not.
OPEN A ROTH IRA. Talk with your bank or go to Vanguard.com to discover your options. Provided your Contingency Fund is well-funded and you are not drowning in credit-card debt, this may be the perfect opportunity for you to boost your retirement funds.
REDUCE CREDIT-CARD DEBT. You can send any amount of money to your credit-card account at any time. Sending a great big unscheduled payment could be the jumpstart you need to become debt-free. Decide to stop using that card and keep paying more than the minimum amount due every month until it's at $0.
REPLACE AN ENERGY MONSTER. It might be time to replace that energy-guzzling refrigerator or furnace. Having the funds in hand to pay cash will put you in a beautiful position to negotiate a great deal.
SHOVEL IT INTO YOUR CAR. Get the routine maintenance or repairs on your car that you've been avoiding. Preventative maintenance is almost always cheaper than a repair.
BUILD A STOCKPILE. Set this money aside to be used weekly at the grocery store to stock up on the Best Deals. Carefully peruse the ads, and then match sale items with manufacturer coupons to get rock-bottom prices.
INVEST IN YOU. What do you need? A trip to the dentist? A couple of hours with a good therapist? A day at the spa? If doing something renews your joy, do it; it might be the best money you've ever spent.
Mary invites questions, comments and tips at [email protected], or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.