What to Do With Your Tax Refund
March 10, 2008
What is the best thing to do with your income tax
refund, i.e., the return of your enforced, interest-free
"loan" to the U.S. Treasury?
If you have any credit card debt, pay off principal.
If you have no credit card debt, pay down some other
debt, other than your mortgage.
If you have no debt to pay down, make a contribution
to your IRA.
If you are maxed out on your IRA, set the money aside
in a special bank account for your next car repair or new
tires. This way, you can avoid charging this to your
credit card. If you can get an extra year out of your car,
you can defer purchasing a new car for another year. (Do
this for the next five years. Then buy a used car.)