Northeast Wisconsin
  • Northeast Wisconsin
  • March 2018
Written by 

What will you do with your tax refund?

Has your 2017 income tax refund arrived? The average Federal refund last year was about $3,050. A financial windfall like this offers many spending and planning opportunities. What will you do with your refund?

Don’t give in to the urge to splurge on the first thing that comes to mind. Try using a “Want List.” Put it on your refrigerator or favorite electronic device where you’ll see it often. As you think of things you want or need, add them to the list.

What do you often think about? Do you wish you had more money in savings? Would you feel better if you paid down debt?

Dream a little. What’s on your bucket list? Is there a vacation you have always wanted to take? Is there something you’ve always wanted for your home?

Build your list for at least a few weeks. Then sit down and sort through your ideas.

Here is an example of a possible strategy:

Emily and David have six items on their want list. They would like to add $800 to car repair savings, pay off their $800 Visa bill, pay off their $500 Kohl’s card balance, save $1,000 for a vacation, add $1,000 to their emergency savings and buy a new couch for $2,000. While they received a $3,300 refund, their want list includes $6,100 of ideas. So, they prioritize.

Many financial professionals would recommend paying off the Visa and Kohl’s bills ($1,300 total) to eliminate the high interest debt. They still have $2,000 left.

They will need new tires soon, so they decide to add $800 to their car repair savings. That leaves $1,200 of their refund to allocate.

It would be quick and easy to put the remaining $1,200 aside for a vacation, but nothing has been added to their emergency fund. They really want to do both, so they decide to split the remaining money.

They put $700 into their vacation savings fund, which is 70 percent of the way toward that $1,000 goal. Because they paid off their credit cards, instead of making monthly payments on those bills, they can put the money that was going toward credit card debt into their vacation fund and look forward to a nice vacation.

They put $500 into their emergency fund. To continue building their emergency savings, they set up an automatic monthly payment from their checking account to their emergency savings. They will continue to save automatically until they have at least three months of living expenses set aside for emergencies.

A combination of paying down debt, adding to their emergency savings fund each month and having a vacation to look forward to offers immediate financial strengthening, plus positive encouragement to stay on track financially. 

Alan Prahl

Alan Prahl is the Education Leader with FISC, the Financial Information & Service Center. He has an undergraduate degree from the University of Wisconsin in Madison and law degree from Hamline University. A nonprofit program of Goodwill NCW, FISC provides financial counseling and coaching, including a no-cost, no obligation 30-minute consultation with the “counselor on call.” To learn more, call 920-886-1000 or visit

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