It’s hard to be patient when you’re expecting a tax refund.

Peering out the window and waiting for the mail truck only seems to delay your check’s arrival. Or, you may log in to your banking portal before sunrise every day for a direct deposit.

It’s possible you have already earmarked the money for a European getaway, your new capsule wardrobe, or some upgrades for your car. You’ve earned it, right? After all, you only live once.

There is nothing wrong with enjoying your money.

But before you start swiping away your tax refund, consider one of these moves.

1. Build your 3-6 month emergency fund

Being an adult is expensive. It takes months of fine-tuning your budget to finally get into a groove. And then, without fail, an unplanned bill shatters your progress.

It’s discouraging, but it doesn’t have to throw your entire budget off track.  

You can’t prevent last-minute car bills, home repairs, or unplanned medical expenses. But you can protect yourself with an emergency fund.

Experts recommend setting aside three to six months of living expenses. Your emergency fund should stay within reach—ideally in an easy-to-access account.   

Your tax refund may not be enough to fund the whole thing, but even $250-500 is a great start.

Aim for the first $1,000 and continue building from there.

2. Pay down high-interest debt

There’s a lot of pressure to save and invest for retirement. And last year’s viral response to media “benchmarks” only proves how difficult it can be—especially when you are wrestling with debt.

It’s not as sexy as the stock market, but paying off high-interest debt is one of the best decisions you can make.

Think of it like this: the average credit card charges almost 18 percent interest.

Paying off your balance means you can begin to save and invest.

Before tackling your debt, funnel at least $1,000 into your emergency fund. A small fund may prevent you from relying on credit cards as unplanned expenses arise.

Both priorities are savvy ways to spend your tax refund.

3. Start investing for the future

The exciting thing about investing is your money may grow without putting in extra hours at work.

The power of compounding means you can earn money on your earnings. You can see it in action with this calculator.

Starting to invest can be a little scary—especially if you’re afraid of losing money. But, chances are, you are already doing it through your workplace retirement plan.

If they offer you a match— a.k.a. free money—you should definitely contribute enough to get it.

If you want to invest outside this plan, start by jotting down your goals:

  • How long until you need the money? This is your time horizon.
  • How comfortable do you feel with risk and how much risk are you able to take on? This is your risk tolerance.

After answering these questions, you may be ready to invest.

There is no right or wrong choice—and the decision is yours alone. You can learn the basics about different types of assets and asset allocation here.

4. Spend your refund on all three (plus something fun!)

The road to financial wellness is different for everyone. You may want to be debt-free as quickly as possible. Or, you may prefer some detours along the way.

If the steps we have outlined don’t feel realistic, choose a different path.

Paying off debt may take years. By building in small splurges—especially to celebrate milestones!—your plan may be easier to achieve.

Let’s say your tax refund is $1,000. If you loathe the idea of tossing the whole thing at high-interest debt, you could set aside $200 for something fun.

Resist the urge to make rules for  spending money. You may find a small splurge is enough to satisfy your desire to spend—which may keep you on track later.

Be smart with your tax windfall

Because taxes are so complex, getting a refund often comes as a complete surprise. But unexpected doesn’t mean the money is free. You still worked hard to earn it.

Blowing the whole thing may feel good in the moment, but you may be left with buyer’s remorse once you recall your unmet financial goals.

Save for what matters.

Try Twine