Top 5 Things to do with Your Tax Return

Most of us dread tax season. Even with sites like TurboTax, Tax Act, and H&R Block, we still have to sit down and fill out complex tax documents. Things get extra complicated when you’re self-employed or own your own business.

But, with taxes comes one exciting thing—tax returns!

While it’s not technically free money, getting a couple thousand dollars (or just a few hundred) feels great.

It’s ridiculously easy to spend that money on frivolous things (last year I spent a chunk of mine on a tattoo, for example), but there are better things you should spend your tax return on (don’t worry, I also put some of my return in savings).

This tax season, be more responsible and use your tax return to do one (or more) of these five things.

1. Apply for a secured credit card

If you’re looking to build credit, getting a secured credit card can help you improve your credit fairly quickly.

A secured card works like a traditional credit card, but you must put down a cash deposit before you can make charges. In most cases, that deposit becomes your credit limit.

Some cards offer a higher limit with a lower down payment if you have somewhat decent credit. The Capital One® Secured Mastercard®, for example, offers a $200 credit line if pay a down payment of $49, $99, or the full $200—it all depends on your credit.

Since you’ll need to pay a down payment for the secured card, set aside your deposit from your return.

2. Put money towards your retirement account

This, of course, is one of the most responsible things to do with your sizable return. If you don’t yet have a retirement account, here’s our beginner’s guide to saving for retirement.

Whether you have an employee-sponsored 401(k), an IRA, or a Roth IRA, put some (or all) of your tax return towards your future.

If you have a 401(k), chances are you don’t really know what you’re doing when choosing how to invest your money. Most people simply guess, which is a good way to lose money. But there’s good news: there’s a great young company that can help you invest your retirement plan: Blooom.

Blooom provides online 401k optimization, and automatically makes difficult investing decisions for you.

For more information on how Blooom can work for you, check out our review.

3. Invest

If investing in your retirement account is a little too boring for you, there are other investment options for you to consider. You can go the traditional route and invest in stocks or mutual funds. Or, you can invest in the following, more unique, options:


Investing is complicated and most of us just don’t want to think about it. Luckily, in our technological age, we don’t have to.

Robo-advisors are diversified account investors that use a complex algorithm to best manage your investments. Note that you will need to pay fees for the robo-advisor, but those feels will be substantially lower than fees you’ll pay for a financial advisor. Your tax refund will be more than enough (depending on your income and the size of your portfolio, of course) to cover the fees.

Betterment and Wealthfront are our top picks for robo-advisors, but there are many more to choose from.

Real estate crowdfunding

Real estate crowdfunding is similar to other crowdfunding (think GoFundMe), except they offer investors the opportunity to lend money to other investors looking to purchase real estate.

Crowdfunding as a whole is growing, and there are a few reputable companies that allow you to invest in real estate for just $1,000.