You Got a Tax Refund Check. What to Do with It?

Getting a tax refund check can feel like a financial reset button when you need it the most. If you’re one of those early-bird-gets-the-worm types, you may be filing your taxes as early as January or February this year.

If money will be coming back your way in the form of a tax refund check, now’s the time to decide what to do with it.

How Much Money Will You Get Back?

Start by figuring out how those funds can positively impact your budget for the coming year. You have a budget, right?

For many Americans—including lower-income families living paycheck to paycheck—the refund is one of the largest single payments they receive all year. Refund amounts vary, but for households with modest incomes, that lump of cash could range anywhere from several hundred to several thousands of dollars for folks declaring dependents and benefitting from credits or withholdings.

Plan How You Will Spend the Refund Before It Arrives

Once that refund arrives, the big question becomes: what should you do with it?

There’s no single right answer, as every refund recipient’s situation is unique. However, a thoughtful money plan will have a more lasting impact on your future financial wellbeing.

1. Determine What Expenses Are Most Urgent

For many people, the most practical move is using the refund to catch up. Should you be:

• Paying overdue rent, utilities, or car payments?
• Reducing high-interest credit card balances?
• Covering essentials that were on hold last year?

Thinking ahead helps people stabilize their finances and reduce stress at the same time.

2. Cash It Using RCheck at a CCEA Currency Exchange

By cashing your refund check using RCHeck at a CCEA Currency Exchange, you’re ensuring you have access to the funds as quickly as possible. It’s also a safer way to get your own dollars in your pocket than some of the alternatives.

While you’re there, check out the other helpful financial resources that may keep your spending in check this year.

For perspective, read about what would happen to communities without currency exchanges.

3. Reduce Your Debt—Even if by Little

If you carry debt, using part of your refund to pay it down can have lasting benefits. Even a partial payment can:

• Lower interest costs over time
• Improve your cash flow month to month
• Reduce the risk of falling further behind

You may not need to use the entire refund if your debts are low. Splitting it between debt and dinners out or entertainment expenses might be more realistic (and more fun!).

4. Load Money Onto Your Prepaid Debit Card

Some people simply prefer a safer way to spend that won’t lead them down the wrong road. In that case, options like loading funds onto a prepaid debit card can make sense. This allows you to:

• Access money immediately
• Pay bills or shop electronically
• Avoid carrying large amounts of cash or spending what you don’t have

It’s a practical option for anyone who wants control without committing to something in the long-term.

5. Get a Money Order/Money Transfer to Help Family Members

Money orders and money transfers are a great way to use your refunds to help others, particularly if either or both of you don’t have bank accounts or the other person lives in another country. Here’s what families can do through a CCEA service:

• Send money to a family member facing an emergency
• Help with an unexpected personal expense, like a funeral, medical bill or moving costs
• Support a loved one in need who doesn’t have access to money

Services like money orders or money transfers (such as Western Union) will come in handy next time you need to send funds quickly and securely.

6. Add to Your Emergency Fund

If possible, consider saving even a small portion of your refund to set aside in a contingency fund. This can be for emergencies as well as rainy day expenses or even a future vacation. A few hundred dollars can make a big difference:

• Cover unexpected car repairs
• Reduce your reliance on a credit card or short-term borrowing
• Provide peace of mind

You don’t need a perfect savings plan—just a starting point, and the rest will follow.

Start Your Year Off the Smart Way: at CCEA Currency Exchange

Do you want a place that can help you do all of the above, where you can also pick up auto stickers and take care of other care-related tasks?

This year, take advantage of everything that your local Community Currency Exchange (CCEA) has to offer, starting with multiple ways to use your tax refund wisely.