Bear in mind that when you use onetime income to meet recurring expenses, you’re likely headed for trouble down the road. And if you’re splurging out of frustration or some misguided notion that you will help rescue the economy, think again. Spending to feel better is a temporary fix and usually just buries you further and makes you feel all the worse later on. Think about how you spent your refund last year. 

This article from Time is on the right track. Spending your tax refund unwisely could pose problems in the future, but using a tax refund to add to your mortgage principal or add to your savings would be a great deal. Splurging our of frustration – we’ve all been there before. Thinking that it will help rescue the economy maybe not but we have been in the  position to think that if we just buy one more thing it can’t hurt.  Splurging without the finances to back the purchases creates havoc on your budget.

How did I spend my refund last year? Symphony tickets. The year before that I used money to go on a cruise and digital camera

These were things I was planning anyway, so there was no harm in using the money for those purposes. In previous years, I invested some of the money that I received from my tax refund. 

Using a tax refund to buy a used car or to pay your rent or something else might be problematic, because where would you get the money otherwise to make the paying and there is always maintenance and upkeep of certain items that you buy.

There are recommendations to spend the money on classes, paying off a loan, donating money, purchasing something that will save you money in the long run or investing. All good ideas but what is really important and impressive is using money wisely. If you need to use your tax refund to pay off your heating bill from the winter or to reduce your credit card debt then do it.

A tax refund is still your money. Getting a large refund may be considered a bad thing by tax professionals but getting a refund rather than having to pay taxes is better, especially if you don’t want to raid your savings. Also, if you have investments in previous years when you earned more in interest and capital gains your taxes may have been higher.

Even with a tax refund, it is important to spend wisely.