Don't Waste Your Money: Best and worst ways to spend tax refund - News, Weather, Sports, Toledo, OH

Don't Waste Your Money: Best and worst ways to spend tax refund

(Toledo News Now) -

The 2014 tax season is finally nearing its end.

That means if you're owed a refund, you probably have it by now, or are expecting it within 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 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. 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 comes the worst thing to do with your tax refund.

Bankrate says the worst use of a refund is for a short-term thrill, like a big night out at the bars with friends or a night at the casino.

The 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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