Start an emergency fund
Putting your refund away for a rainy day is a wise decision. It keeps you from having to use your credit card whenever a financial emergency arises. Since so many debt situations stem from unexpected expenses, starting an emergency fund will give you some of the protection you need to ward off debt.
Get current on past due credit card bills
Tired of late notices and debt collector phone calls? Avoiding them doesn't make them go away; it simply prolongs the collection process. Use your tax refund to take care of those late bills. Your credit score will thank you and you'll thank yourself for finally getting rid of annoying collectors.
Pay off your credit card balances
What do you do when you have an emergency fund and you're current on all your bills? Bring your debt level down by paying off your credit cards. You'll likely see an increase in your credit score and relief in your wallet.
Make an extra loan payment
If you have a mortgage or auto loan, each extra payment you make reduces the life of the loan and the amount you pay in interest. Overall, you'll end up paying less than if you hadn't made any extra payments.
Treat yourself, but don't overdo it
How fun would life be if you only spent your money on bills? It's ok to spend money leisurely, but remember, there's a balance. The key is to take care of your responsibilities first, then enjoy your money second.
