I Got a Tax Refund- Now What?

Every tax season, like clockwork, I get texts that sound like this:

• “Okay soooo I just got my refund—do I just throw it all at my credit card??”

• “Should I use it for savings? Or do something fun for once?”

• “What do I do with this?”

• “Is it stupid if I just spend it?”

• “I want to be responsible, but I also really want a new couch and this feels like the perfect opportunity.”

• “Do I put it toward my Roth or should I save it for something else?”
• “I wasn’t expecting this much… now I don’t know what to do.”

And I get it. The instinct to do something fast is real. It’s emotional, it’s impulsive, and it’s totally human. It might also be coming from fear of messing up, not trusting yourself not to spend it or an overall feeling that money should go out as quickly as it comes in. 

When that refund lands, your first instinct might be to do something. Because it feels like free money. Extra. Unexpected. A little boost from the universe.

Here’s what I want you to remember: if you don’t don’t have a plan, that refund will gone before you even realize what happened. Because inevitability that money will be needed, for something. A bachelorette, a vet visit, a new pair of shoes. You will always find reasons to spend money. Our goal is to help you see that setting an intention for what to do with your refund is the most important step after filing your taxes.

START HERE: What comes up for you when you get a refund?

Step One is an Emotional Check: Before you start transferring, paying off, or investing—pause. Take a second to get curious.

• Do you feel a hit of relief?
• Guilt? (Why do I deserve this?)
• Anxiety? (What if I don’t use it “right”?)
• That familiar little voice saying, “I should use this responsibly... but I really want to treat myself.”

Most of us weren’t taught to slow down with money. We were taught to react. To scramble. To act fast.

Step Two, Assess: This is your invitation to do it differently.

When I coach clients through this moment, we start with awareness—because before we make a single financial move, we need to understand what’s actually going on internally as in the feelings, reactions inside and also the external. What is currently happening in your financial reality at this moment. 

If a refund brings up panic, avoidance, or pressure to "get it right," that’s not something to ignore. That’s something to explore.

Step Three, Analyze: ask yourself, “do I need this refund as income?”

This is where we get practical. Because sometimes the refund isn’t “extra.” It’s necessary.

If you’re in a job or business where income fluctuates month to month—like real estate, coaching, design, service-based work, hospitality, or anything tied to client contracts or commission—you already know: one slow month, one deal that falls through, and suddenly your budget’s stretched thinner than you’d like.

If you’ve been counting on a client payment that didn’t come through, or watching sales slow down, then yes—this refund is income.

​​Using your refund to cover a dip in income is strategic. It means you’re paying attention to your cash flow, taking care of your business and your bills, and giving yourself the stability you need to keep showing up fully in your life.

If you need the refund as income when you get it, put it in your budget. If you know you’ll need it as income in a few months, put it in a HYSA so it can earn you some money while you wait.

Step Four, Strategy:

There are three main ways to use a refund strategically:

1. Cover Current Gaps
   → Think: that car insurance premium coming every six months, upcoming HOA fees, a medical procedure you’ve been needing but dreading because of the cost, or the home maintenance issue you’ve been ignoring because you really didn’t want to find out how much it would be. This is your chance to take care of it and face with confidence what you’ve been avoiding. 
2. Tackle Debt
   → If you’ve got high-interest debt (credit cards, personal loans, family loans carry heavy emotional weight), putting some of your refund here can create real relief. But don’t put ALL of it here. The “throw-every-dollar-at-debt” energy might feel productive in the moment, but it’s often rooted in emotional urgency, not long-term strategy. This is where coaching can make a huge difference. We help you unpack the patterns behind your spending, look at your cash flow honestly, and build a strategy that not only pays off debt—but keeps you out of it for good. Reach out today to chat coaching. 
3. Build or Rebuild Savings
   → We teach our clients to have at least one full month of expenses in their checking account at all times; this is your first line of defense if emergencies come up, or you need unexpected cash quickly and can’t wait for a bank transfer. Read: why your checking account should be the first place you start saving. We also recommend six months of expenses in a high yield savings account; this is your emergency fund. Read more about why these cash savings accounts are important here. 

If you’re building a checking account buffer, your emergency savings, or planning for upcoming short term goals, your tax refund could be the perfect boost. Having cash on hand gives you options, security, and support when life throws you curveballs.

You don’t have to split it evenly. You don’t have to follow some cookie-cutter formula. The best plan is one that considers your current financial reality, your upcoming big-ticket expenses, and your future goals and needs. And just as important? Understanding how to regulate your emotions so you’re not making reactive choices—you’re making aligned ones. That’s what sets you up for major financial success.

What does this look like?

Sometimes that looks like 70% savings, 30% debt. Sometimes it’s the opposite. Sometimes you add a little treat in the mix. The point is—you decide from a grounded, informed, strategic place. That’s what we do with our clients every day. Not just making the plan, but building your confidence in how you use it.

I had a client who got a tax refund (~$2000) and wanted to put it all toward debt. We looked at her debt repayment plan, played with the numbers, and discovered that the extra money would only save her about a month in her debt repayment plan. Even though she initially wanted to put all of the refund toward debt, we ended up putting it all toward savings because the security she felt putting that money in savings outweighed the month she’d save in her debt repayment plan. We couldn’t have come to that decision without running the numbers, looking at a few different scenarios, and choosing the path that made the most sense for her present AND future. 

That’s the real flex—knowing you’ve got options, making decisions that are aligned with your real life (not some influencer’s highlight reel), and owning the fact that smart money moves don’t always look sexy online… but they feel damn good in real life.

A refund isn’t a free pass or a get-out-of-debt card.

It’s a chance to practice intention. To build momentum. To see what changes when your money decisions are driven by clarity instead of chaos.

So if your refund is burning a hole in your pocket—take a beat. The goal isn’t to make a perfect move. It’s to make a move that actually supports your future.

If you want support figuring that out, that’s literally what we do. You don’t have to figure this out alone. Contact us today to get started.