You’ve been waiting for it all year. That nice little chunk of extra change we call a tax return. Perhaps you’ve already earmarked that money for one big splurge or a few necessities. Maybe your pattern has always been to blow it on little stuff (“impulse buys”) you don’t really need just because you have the money.

It’s time to graduate from the Becky Bloomwood (everyone’s favorite Shopaholic) approach of spending money and put that money to good use. There are several smart ways you can apply your tax return money for long-term success (or even just a little good-earned fun).

Here are some ideas:

1. Save for a down payment on a house

In most cases, renting is for the birds. You waste so much money that could be going towards a mortgage on a forever home, short-to-medium-term home or an investment home. Even if you don’t think you’re ready to settle down and buy something, start saving now and buy when the market is right.

When my daughter’s then-boyfriend (now husband) suggested she stop renting and buy her first home back in 2011 when foreclosures abounded and prices were low, she initially scoffed at the idea claiming she wasn’t “ready.”

Fortunately she took the leap and scored an amazing home at a great price. Now that the market has gone back up she is in a position to sell at a net profit of almost what she paid, meaning she essentially doubled her investment!

So buying low and selling high works not just for the stock market but for real estate, and the first step is saving for a down payment.

2. Prepay down the principal balance on your home

Those of you who are already homeowners can take at least 10% of your tax refund and apply it to your principal as a mortgage prepayment (check your loan contract terms for prepayments to make sure there is no prepayment penalty). If you do this consistently over the years it will save you a lot of money in interest, and get you closer to living mortgage-free. This is something I have done personally in addition to re-financing to get lower interest rates.

3. Invest in a Chanson Water ionizer for the health of your family

Water ionizers are electric devices that hook up to your tap to filter your water and create ionized alkaline water for drinking and ionized acidic water for external uses.

When people switch to drinking Chanson water they tend to report things like better sleep, more energy, fewer instances of illness, an average body fat loss of 10-15 pounds and some are even able to reduce or go off of prescriptions (always consult your doctor).

These machines start at $1,200 but will likely pay for themselves in 2-3 years as they will save you money on bottled water, household cleaning products and skincare products not to mention potential healthcare savings.

4. Pay off/down your highest interest credit card

This is pretty much a no-brainer. While having a savings is important, if you are carrying high balances on credit cards with high interest rates you are throwing money away in interest. So aim to tackle the highest interest credit cards first.

5. Splurge on a vacation
When was the last time you took a vacation? We all need a little R&R sometimes, so give yourself permission to take a vacation at least once every few years if not once a year depending on your circumstances. Using your tax return for even a budget vacation or a staycation may be the way to go if you’re overdue.

6. Divide the whole amount by 10 and put it into ten different things

If you’ve got way too many buckets on your list to choose just one or two to apply your tax return to, consider breaking it up into percentages of 10 (or whatever number fits your situation) and spreading it across the board. So one example would be:

• 10% tithe or charity
• 10% down payment for home or home prepayment
• 10% emergency fund
• 10% retirement fund
• 10% vacation fund
• 10% college fund
• 10% credit card debt
• 10% savings for a big purchase like a computer, car, or new appliance
• 10% start up costs for a business
• 10% investments

Hopefully this sparked a few ideas for ways you can best apply your tax return.

Now it’s your turn.

Tell me your favorite tip or what you’re going to do with your tax return in the comments!

Note: My posts often can contain affiliate links to products or information that I believe will be useful to my readers.