When tax time comes rolling around, your refund can feel like free money. News flash: That cash was yours all along. Rather than treating your cash like a windfall, it’s best to spend it wisely.
Impulsiveness gets the best of everyone once in a while, which could leave you footing the bill for a ridiculous purchase down the line. Check out some of the absolute worst ways you could splurge with your yearly check from Uncle Sam.
Read on to see the worst things to do with your tax refund.
Dumb Choice No. 1: What Happens in Vegas Stays in Your Bank Ledger
Oh, gambling. Taking your cash to a mecca of chance might spark some inspiration if you possess a true gambler’s spirit. Whatever you do, don’t bet it all on black — you might not get any of your hard-earned dollars back. Don’t let your refund surplus turn into a new debt you owe. Remember, gambling is how people go broke.
Dumb Choice No. 2: Tackling Brand New Athletic Dreams
If you ask the majority of 7-year-old boys what they want to be when they grow up, “athlete” is sure to rank pretty high on the list. Although big dreams of the big leagues are more than acceptable, when you’ve got a few decades under your belt it’s best to take those far-fetched dreams with a grain of salt.
If you’re a desk jockey and haven’t shot hoops since the ’90s, don’t drop hundreds on sports equipment for your next big thing — you’re most likely not going to learn how to play just because you bought the gear.
Dumb Choice No. 3: Bon Voyage to You and Your Massive Debt
When you get bit by the travel bug, it’s understandable to want to plunk some of your cash down on an indulgence in your wanderlust. Remember, however, along with packing your necessities, you’ll also have the baggage of all your other debt coming aboard with you, too. You’re far better off paying down existing debt before traveling the world.
Related: Find Out Where Your Tax Refund Is and When It’s Coming
Dumb Choice No. 4: A New, Financially Dependent Best Friend
It’s nearly impossible to resist adopting a new furry friend when you suddenly have the cash influx to expand your family. Remember, however: A pet is a life-long commitment, and much like a new human addition, pets come with their own set of extremely high expenses — particularly as they grow. (College kids are extremely susceptible to the lure of fluffy faces, making this one of the dumbest ways people spend their student loans, too). Although you might be flush at the moment, think about all of Fido’s soon-to-be needs and be sure to budget accordingly.
Dumb Choice No. 5: Give Your Cash Away to Anyone
Everybody loves free money, but don’t get your tax refund confused with being a financial benefactor. One of the single dumbest decisions you can make with your tax refund is loaning it out to friends or family. If they’re irresponsible with their cash flow, odds are likely that they’ll be irresponsible with your financial gift, too — which leaves you on the hook for the long haul.
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