(WCPO) - The 2014 tax season is finally nearing its end. That means if you are owed a refund, you probably have it by now or are expecting it in the next couple of weeks.
Now comes the hard part: what to do with it once it's in your hands. The average refund is now almost $3,000, according to the IRS-- and you don't want to blow it.
Save, But Spend a Little
Dreaming of a warm sunny beach? A plane trip to an exotic city? There are so many ways to spend that tax refund.
But before you regret it, Smartmoney.com has listed the following suggestions:
1. Create an emergency fund, to help pay six months of bills if you lose your job.
2. Pay off some of your debt, such as a credit card bill with a 20 percent interest rate.
3. Contribute to an IRA or a 529 college savings plan.
4. Finally, splurge a little bit. Take a short vacation or buy that 50-inch HDTV you've been wanting.
Doesn't That Stink?
But from the "doesn't that stink" file, the worst thing to do with your tax refund. Bankrate.com says the worst use of a refund is for a short-term thrills like a big night out at the bars with friends or a night at the casino, dropping cash like you are James Bond in Casino Royale.
Next morning you may say "doesn't that stink?"
The Bottom Line
Bottom line: Pay yourself first. Then pay your creditors.
But don't be such a miser that you refuse to reward yourself for a year of hard work.
Spend wisely, so you don't waste your money.
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