How you should spend your tax refund


Don’t blow the three grand you just got from Uncle Sam on a vacation.

Now is the opportune time for the average American to use the tax refund to reduce credit-card debt or start an emergency savings fund.

That’s the advice of financial pros on how one should spend a refund.

“The Federal Reserve said millions of Americans don’t have any emergency reserve fund. Use your refund to set up an emergency fund of at least $1,000,” said Simon Zhen, a research analyst with He said the second priority is to reduce card debt.

With average card interest rates at around 20 percent, cardholders carrying that debt month to month have a great opportunity to get out from under by paying more than just the monthly minimum, advisers say.

“For many people, it makes a lot of sense to reduce credit-card and student loan debt,” said Lewis Altfest, an adviser in Manhattan. Altfest said an emergency fund is also needed to ensure one won’t fall back into debt.