How You Should Use Your 2022 Tax Refund, According To Experts

Casual man is counting american dollar banknotes, close up of hands with money.
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In the first pandemic year without stimulus payments, the good old tax refund will be the only windfall most households can expect this year — and boy, do they expect it.

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A new study from GOBankingRates surveyed 1,000 American adults from all over the country and found that a full 85% of respondents anticipate getting money back from the government.

Since that will be the only cash coming back to most households, they’ll have put an extra helping of thought into how they spend it. GOBankingRates asked the experts to help guide you in the right direction.

Shrink Your Debt and That Stack of Bills

Three out of four people who responded to the survey — 75.6%, although respondents could choose more than one answer — said they would use their tax refund in the least exciting way imaginable: to pay down debt or keep the bill collectors at bay.

It’s not the stuff that dreams are made of, but when you’re behind the 8-ball, needs trump wants.

Make Your Money Work

“The best way to spend your tax refund is to pay down high-interest debt,” said Chloe Choe, owner of Off Hour Hustle. “High-interest debt will restrict you from reaching your financial goals, and it’s important to pay it off as soon as possible.”

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Save It for a Rainy Day

Another 44.6% planned to sock their tax refund away into savings — and the experts agree on that logic, as well.

“Building up your piggy bank for a rainy day is going to save you a lot of heartbreak when your finance plans fall through,” said Amanda Sullivan, a research analyst with CreditDonkey. “Placing extra money in an emergency savings account will help you be prepared for the worst.”

If your emergency fund is already flush and you have kids pursuing higher education, a college fund is a great place for your tax refund to land.

“Whether you’re just starting the college fund or you need to boost it, using your tax refund to do so is a wise move to make and can help you pay for your kids to go to college down the road,” said Julie Ramhold, a consumer analyst with “Make sure … you choose an account that will accrue at least some interest so that you’re always earning a little something as you build it up over time.”

Make Your Money Work

Invest It in a Smart, Safe Fund

About 15% of the people polled planned to put their refund to work by investing it. Global turmoil and rising interest rates have the market off to a rocky start in 2022. If you’re leery of stocks, you’ve got good instincts — and options.

“I would recommend investing in real estate because the risks are generally low but the rewards are high,” said Carter Seuthe, CEO, Credit Summit. “An attainable option is REITs.”

Seuthe speaks of real estate investment trusts, which allow you to buy into real estate without owning a physical property through funds that are bought and sold in shares just like stocks.

Oliver David, founder of Green in Black and White, is a fan of a different kind of alternative investment.

“A TFSA is a tax-free savings account that lets you withdraw money at any time,” David said. “It is placed in different investments that either you or an investment agent chooses that will earn you more money over time. This is a great way to use your tax return and will be helpful in the long term.”

Invest It in Your Home

If you’re a homeowner, the smartest long-term investment might not be in stocks or real estate — unless it’s the real estate you live in.

Make Your Money Work

“One of the best ways to spend your tax refund is to use it to repair or upgrade something around the house,” said Matthew Robbs, founder of Smart Saving Advice. “You will get to enjoy that repair or upgrade every day, and long term it will also increase the value of your home.”

Invest It in Yourself

Another option is to spend your tax refund on a new-and-improved future version of yourself.

“Using your tax refund to invest in stocks or real estate could be a worthwhile financial investment, but you should also use some of that money to invest in yourself,” said Erin Ellis, an accredited financial counselor with Philadelphia Federal Credit Union.

“Do you need some more professional clothes? Buy a few versatile pieces that can help you feel more confident. Is there a skill you’ve wanted to learn to help advance your career? Sign up for a class or seminar where you can attain that knowledge. Want to exercise more or eat healthier? Look into affordable gym memberships or nutrition programs that can work for you. These are all opportunities to use your money in ways that will benefit you in the long run.”

If You Can Afford It, Let Loose a Little

About one in five of the study’s respondents — 19.3% — planned to use at least part of their refund not to pay bills or build their savings, but to treat themselves and have a little fun. If you have the means, that might just be the single best thing you can do.

“You don’t have to deprive yourself of some extra self-care,” said Jeffrey Zhou, co-founder and CEO of Fig Loans. “Use your tax refund to treat yourself to a relaxing spa massage or a satisfying meal. A little luxury once in a while is fine if that’s going to help you keep your sanity and make you feel better — because you can’t pour from an empty cup.”

Use It To Get Away

Following the same line of thinking are the 10.6% who plan to use their refund to satisfy their wanderlust, which many haven’t been able to do since at least 2019. Here, too, if your immediate financial needs are met, that’s just fine.

“This might not be the most sensible or money-savvy idea; but, after the global pandemic, we’ve had nearly two years of our lives wasted and are unable to get them back,” said Karl Tippins, finance expert at Pension Times. “This might be your time to do something fun, unexpected and live wild for a moment. You can’t take your money with you at the end, so enjoy it while you can.”

Give It Away

Spending your refund on yourself might make you feel good, but spending it on someone else could make you feel great — and 2.6% of those surveyed plan to do exactly that.

“Spend it on other people,” said Krishna Rungta, founder of Guru99. “Use your tax refund to make a donation to a good cause or invest in someone else’s future. Consider giving some of your refunds to a friend or family member in need, or investing in a program that helps others in your community. You’ll feel good about helping out and you may even create some new relationships along the way.”

Brian Bram, founder and CEO of Home Gym Strength, concurs.

“Help other people in need in your community,” he said. “Helping others is a great way to make a difference in your community and also makes you feel good about yourself. It’s a win-win situation. So why not take some time this spring to find an organization that needs your help and do what you can to support them?

“Try donating money or time to a local charity, volunteering at a homeless shelter or soup kitchen, or taking part in a food drive. It doesn’t need to be huge. What matters is that you helped and made a difference, and you’ll certainly be glad you did — and nothing can ever replace that feeling.”

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for, a financial publication in the heart of Wall Street's investment community in New York City.

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