My tax refund

What to do with my refund? I bet that's a question on everyone's mind...if you're in fact receiving some money back from the IRS and the state.

Our 2008 refund will certainly help us pay down some credit cards and put much needed $$ into our savings account. "Savings" account. That's a laughable term because there's probably about $200 in there. Some savings. We've tapped into that account last year that it amazes me we have anything left!

But is paying down credit cards a smart use of the refund? I'm beginning to seriously reconsider paying down balances. My AMEX credit limit was reduced and interest rate was increased because of a couple of late payments. Not 30 days late mind you. I was 6 days late in one and 13 days late in another. Why am I late? Because I'm juggling and prioritizing bill payments with the one income our household is currently trying to survive on. Banks aren't willing to help me, so why give them a chunk of my refund to pay down my outstanding balance? I think I'm going to continue making a little over the minimum monthly payments, ask my credit card companies to lower my interest rates and keep my refund for emergencies.

So my husband and I talked about it and came up with a plan for our specific situation:
a. Invest some $$ into a CD account. Use some of the gains from the matured CDs to pay some debts. Re-invest some $$ into another CD.
b. Put most of the $$ into savings
c. Invest a little $$ in the stock market (some good deals out there)

Now, the only thing to figure out is which CD and stocks to invest in for a good return, both short and long term. Gotta do our research and make wise financial decisions. Wish we had taken this strategy with the last two refunds instead of splurging on window treatments, new furniture and backyard landscaping with the 2006 refund and paying a credit card balance in full with most of the 2007 refund. Oh well, we learned our lesson. Now we move on.

Take-away from this: Depending on your circumstances, invest some of your tax refund wisely so that it will give you a ROI. Do not use it all to pay off debts. Put some $$, if not all of it, into your savings.