Recent stats showed that the IRS has already sent out 30 million refunds in 2022. While you may be planning to do some shopping or take a trip if you receive a refund, here are a few other options to consider.
Using your refund to pay down credit card debt will improve your overall finances, especially since the Federal Reserve is planning more rate increases to help slow inflation. Putting a sum of money toward credit card balances may lower the amount of interest you pay while increasing your credit score.
If the pandemic put a dent in your emergency savings, consider using the refund to restock your coffers.
Emergencies hit when we least expect them, and if you have an
emergency fund, you won't need to resort to using credit cards to handle them. If you or a family member is unable to work for more than a few weeks, this fund will help keep the bills paid during this time.
If you're comfortable with your emergency savings and have minimal debt, there are several other ways to put your tax refund to work. Deposit some or all of it in your savings or retirement account or use it to finance a home improvement project.3