Its TAX TIME! You are already planning on how to use that money, aren't you?  Whether you are getting back a little or a lot, the way you use that money can have a real impact on your personal and financial well-being.  So think through all the options, even the ones you don't really think sound appealing.

Three general rules you should follow before getting your refund:  DO plan ahead before spending your refund.  Have a plan, and involve the family to increase the chances you will identify all the possibilities and think about which ones are most important.  DO devote a portion of your tax refund to build long-term financial security.  DON'T throw away part of your refund on preparation fees and/or loan fees.  Those companies who offer "quick refunds" are really just giving you a loan, and taking part of your refund as interest.  If you need help you can get free tax preparation programs like VITA at<> or from AARP<>.

I have been working on my taxes and will not be receiving a refund, but for those of you who are lucky enough to be receiving one, here are some great ideas for using that money you are getting back.

  1.  Pay off bills.  Your first priority is to pay any regular monthly bills if you have fallen behind.  Most other debts should be prioritized with highest interest rate debts being paid off first.

  2.  Save for needs in the coming year in an emergency fund.  Having money saved for emergencies can get you through small emergencies, like car repair or medical bills, without breaking a sweat.  In the ultimate emergency (loss of income), an emergency fund can keep you afloat until you find another income source.  Use part of your tax refund to start or build your emergency fund!  Occasional expenses are those big bills that come once a year or every few months (like car insurance) and can cause huge problems for families.  Avoid those problems by being ready for the bills!  Use your tax refund to start a special savings fund, then keep adding to it throughout the year.

  3.  Long term savings!  You can make progress toward long-term goals, and your tax refund can help make that happen.  Adding just $500 a year into a retirement account such as an IRA can make a big difference over a period of decades.

  4.  Special purchases, like a new refrigerator or a new sofa are important too.  Some may be essential, others may just add enjoyment to life.  Ask yourself if this is a want or a need?

  5.  Invest in yourself by taking a course or workshop that will improve your job skills.  If you've been looking for a way to get a better job and increase your salary, money from your tax refund may be the answer.  Check out courses at your local community college or tech school or your workforce center for options.

When you get your refund, don't put it all toward one need.  Pay off some debt, plan for needs in the coming year, and invest in yourself.  If there is money left over, use it to make your day-to-day life better.  If you are getting back more than $1000, you might ask your employer to lower your withholding so you will receive more take-home pay each payday.  More money in your paycheck can be used to meet monthly expenses and could be the difference between making ends meet or not.  To change your withholding, you will need to file a new W-4 with your employer.