#223: Choices, Choices (Friday, April 8)

Every choice you've made in your life has gotten you to this point. Even the seemingly "insignificant" ones.

With the tax season closing, many people are probably looking forward to their tax refund. What will you do with yours? Spend it or save it?

A few years ago, I decided to spend my entire tax refund. It was good while it lasted, then I felt like, "Now what?" You can choose to spend your entire tax refund on a big-ticket item, or you can use it to serve multiple purposes. Consider dividing your refund as follows:

• 20% for yourself; do whatever you want with that money. I generally put this money in my Vacation Fund or buy something ridiculous for myself that I wouldn't ordinarily buy.
• 30% in your savings; if you don't have an emergency fund, this is a good opportunity to start building one.
• 30% towards your bills; use that money to reduce your outstanding debt. Since my student loans are paid off and I don't own a credit card, I usually divide this between my savings and miscellaneous.
• 20% for miscellaneous; if you have kids or other family members that you support, this can be used for them. I use this for gifts to my parents and to fund 529 plans for my niece and godchildren.

I promise it'll be more rewarding to handle multiple financial needs with your refund than spending (or saving) it all.