Bank it or Blow it? What Should You Do with Your Tax Return?

Bank it or Blow it? What Should You Do with Your Tax Return?

According to the IRS, the average tax refund is about $3,000. What should you do with all that money?

Three words: Big screen TV!

Well, that might be your first thought. (It was, obviously, ours.) But money experts warn we should think differently. According to various financial websites, a few wise money moves would be to pay off credit cards, start an emergency fund, pay off student loans, deposit it all into savings, and other really boring-but-totally-practical ideas.

Here’s a different idea that’s not endorsed by money experts but would probably be endorsed by psychologists. (More on that in a sec.) Ready for the idea? Here you go: Be practical with 90% of your tax return. Spend 10% on something cool.

Why? Life’s better with occasional treats. Ask any three-year-old. But you shouldn’t just go out and blow your hard-earned money on any ol’ treat. Buy something that creates value in your life.

OK, back to psychology. This study in The Journal of Positive Psychology (and related articles like this one) found that people tend to be happier when they spend money on experiences rather than stuff.

We agree. So what are some cool experiences we could “buy”?

  1. Build something. When was the last time you experienced making something by hand? For many of us in this modern consumer society, it’s been a very long time. Whether it’s something small like a side table or bigger like a she-shed, use your tax return to buy some tools and materials and get busy making memories. And when it’s time to clean up, a Shop-Vac® Wet-Dry Vac is perfect. Check out our blog on woodworking to see all your options.

  2. Go camping. No, not glamping. Camping. As in a tent. In the woods. With no cell phone coverage or Netflix®. Psychologists – what, more psychobabble?! – say that being in the forest improves mood. In Japan, there’s a whole movement called forest bathing said to boost well being. (As long as you can still eat s’mores we’re all for it.) And because camping usually brings lots of dirt home with you, might we suggest this Shop-Vac® 1.5 Gallon* 2.0 Peak HP** All Around EZ® Wet Dry Vac. By the way, you can score all your basic camping gear plus this vac for under $300.

  3. Do something crazy. We’re talking bucket-list stuff. Bungee jump. Parachute. Race car experience. Mountain climbing. Experiences like those are bound to make you happier than buying a big screen TV. Why? Bragging rights. And we don’t need a psychologist to tell us how good that feels.
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