| Savings & Tips
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Tis the season! Tax season, that is. If you’re among the roughly 75% of Americans who receive a refund, you’re probably excited to get your money back, especially since the average refund is typically well over $1,000. 1 But when the direct deposit hits your bank account or the check hits your mailbox, what are some of the best ways to use your tax refund? Here are some options to consider and some ways you can get your refund more quickly.

10 Ideas of What to Do with Your Tax Return Money

1. Create or bulk up emergency savings.

Kids get sick. Tires pop. Dogs eat stuff they shouldn’t. Layoffs happen. No matter how carefully you plan things out, unexpected expenses or financial setbacks will come up. With an emergency savings fund, you’ll be more financially prepared for whatever life throws at you. Many financial experts say your goal should be to have three to six months of emergency savings. However, if this figure seems daunting or isn’t possible right now, pick a smaller savings goal and start with that. Any amount can help during a time of need, and you can slowly build up your emergency fund over time.

2. Pay down debt.

If you’ve got debt, this is a great time to put a sum of money toward it. The advantage of using refund money is that you won’t necessarily miss the funds because you weren’t even sure how much you’d receive a few weeks ago. Plus, you’ll save in the long run when it comes to interest fees and your credit score.

3. Pay in full for your auto insurance.

If you haven’t decided what to do with your tax refund, consider spending it on your peace of mind. How? By paying in full for your auto insurance coverage, typically a 6-month or 12-month term, you’ll be protecting yourself, your family, and your car for many months ahead. Paying in full frees up money in your monthly budget, and it actually saves you money because you’ll avoid the fee associated with setting up a monthly installment plan.

If you want to get covered, give Direct Auto a call, stop by one of our locations, or visit our website. You can get a free quote and learn more about our available discounts and flexible payment options.

4. Buy a term life insurance policy.

Does your family depend on your income? While it’s not fun to talk about, if the unthinkable were to happen to you, term life coverage can financially support your loved ones through this difficult life change. The payout from a term life insurance policy can help pay for expenses like medical bills, funeral costs, mortgage payments, and even student loans. The price of term life policies varies from company to company and depends on your age, your health, the selected coverage amount, and the length of the term. However, they can be quite affordable. For example, the policies offered by Direct Auto can start at less than $1 a day*, much less than the average tax refund.

5. Pay for auto maintenance or buy a new-to-you vehicle if necessary.

Is your car making a strange noise or struggling to start sometimes? Get it checked out and fixed with your tax refund money. If the repair costs are too high for the value of the car or if you’ve been contemplating a new-to-you vehicle for a while, put your tax refund toward upgrading your ride. Even a used car can be a good long-term investment if you do your research and shop carefully. Depending on the size of the tax refund and a potential sale or trade-in of your current vehicle (if you own one), you might be able to knock off a sizable portion of the purchase price.

6. Take care of home maintenance.

Is your fence falling apart in one spot? Does the hot water heater need to be replaced? Instead of putting off much needed home maintenance, use your tax refund to bring in an expert or two to fix the problems that have been annoying you around the house.

7. Start a college fund.

If you have children, or are planning to start a family soon, you certainly want the best for their futures. Starting a college fund for them is a wonderful way to ensure that they’ll have access to higher education. If you live in a state that has state income taxes, you’ll likely be able to contribute to a 529 plan—which is a tax-exempt savings option for future college expenses. It’s never too early to put away those education dollars!

8. Invest in your career.

Is there a professional certification or class that could score you a raise, a promotion, or even your dream job? Now’s the time to take the plunge! Set aside some of that tax return money and sign up for an online class that will give your professional goals the boost they need.

9. Make a charitable donation.

We all have causes and organizations that are near and dear to our hearts. Maybe your cause is the animal shelter near your home, your church’s food bank, or even your child’s school! If you’re unable to spare anything from your usual paycheck but still want to give back, now’s the time to put your money where your heart is. If you save your donation receipt, you might be able to deduct your donation during tax season!

10. Attend a memorable event or take a memorable trip

Maybe it’s been a while since you’ve taken a family vacation, or perhaps you and your spouse’s favorite musician is coming to a nearby city this summer. Material things may break, but memories last forever! If you can’t decide what to do with a tax refund check, consider using it to create treasured memories and experiences with those you love.

How long does it take to get your tax refund?

Most tax filers can expect to see their refund within 21 calendar days, according to the IRS. However, there are certain issues that can delay the process, including:

  • Errors in your return
  • Incomplete portions in your return
  • If your return requires further review
  • If your return includes certain claims

It’s also worth noting that filing your return on paper can significantly delay your return, potentially up to 6 months or more.

How can I speed up my tax refund?

If you want to get your refund quickly, file as soon as possible and make sure to double-check your return before filing. Ensure it is complete and error-free. If you can, choose to receive your refund via direct deposit.

If you’re really counting on your refund for help paying bills or due to another financial emergency, you might be able to ask the IRS for an expedited return. You’ll likely need to explain your situation and provide documentation.

How to Track Your Tax Refund

The IRS created Where’s My Refund? as a resource for people to track their refund from the time they file to the moment it’s complete. You’ll receive notifications when your return is received, approved, and sent. Check back each day for status updates.


  1. https://www.lendingtree.com/debt-consolidation/average-tax-refunds-study/


* Individual term life insurance by Direct General Life Insurance Company, Policy Nos: 58TL02010713, 12400 (OH), 12802 (WA), IIC21-12815, and in Michigan, by National Health Insurance Company, Policy No. 12815. Per day amount based on annual premium for insured 18-50 years old with a $25,000 policy. Additional fee applies. Policy terms and conditions apply. Premium will vary by insured’s age and coverage level selected.