Spend your tax refund wisely

Financial expert advises on how to spend tax refund

CLEVELAND, OH (WOIO) - Tax refunds are big business. Eighty-percent of all taxpayers will get a refund this tax season and the average return is 2,500 dollars.  Tom Stockett from
Cleveland Wealth advises you avoid an impulse purchase like a big screen TV.

Instead, he says, start with paying down debt, specifically credit card debt, "Look for the card that has the lowest balance on it and attack that card, feel the gratification of knocking that out."

If your credit cards are under control, it's not a bad idea to spend the money as long as you have a plan.

"You're making a purchase, you're upgrading your lifestyle but at the same time you're making a smart money move, almost as if it's an investment,"  Stockett says.

One idea is to buy a big freezer or a new grill, the thought being that having food at home and a fun way to cook that food can save you from spending thousands going out to eat.

Stockett says that for the first time ever, last year, as consumers we spent more money eating out at restaurants as opposed to buying groceries.

Another idea, he says, involves cutting down on trips to the coffee shop, "Buy an espresso maker so you're not going to Starbucks
every single day and spending four or five bucks."

Or you may want to get to work on what is most likely your largest investment, your home.

"Changing out the doors, the siding, putting a new floor in, updating the kitchen here and there a little bit can really have a positive impact on the value of the home," Stockett says.
Saving your tax return is also a very good idea, Stockett says it never hurts use the money to start an emergency savings account or a fund for your child's
college education.  The important point being, he says, is to have a plan and avoid the impulse purchase.

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