NewsChannel 11 spoke with a number of Lubbockites about their tax refunds. Some said they will use the refund to pay off credit card debts.
Dr. Vickie Hampton is a professor in the Family Financial Planning Department at Texas Tech University. She suggests thinking before you go spending that big tax refund.
"The first downfall is that you start to think about how you're going to spend it and maybe not think comprehensively about the good things you could do with the money. IRS refunds are like in some sense opportunities, and you don't want to think of them as something you want to blow."
It is easy to spend the refund in a hurry, especially with a number of tax refund sales or specials.
Dr. Hampton say, "We're seeing a lot of advertisements on TV to bring in your tax dollars and buy a new car. That's almost a double whammy."
Dr. Hampton also says the tax refund usually takes care of the down payment on a big payment. Then, you're still stuck with the monthly payments that incur interest. Instead, think about your priorities.
"I think everyone just needs to think about what needs they have at the time. Pay off credit card debt. Put some money in savings. It's always very nice to have a little money in the bank just in case there's an emergency," says Hampton.
Dr. Hampton adds that spending the money as a down payment on something you've been saving for is not a bad idea, if it is a priority.
"You can invest it and help it meet some goals you have where the normal cash does not allow enough money," she says.
If you have a really big refund, you may want to rethink the taxes you pay all year long.
Dr. Hampton says, "If you have a big refund at the end of the year, that means you've made an interest free loan to the government for that period of time. You could've had that money earlier, the change in deduction would reflect in your paycheck."
But you don't want to change your deduction status so much that you end up having to pay money on tax day. To change the deduction status, fill out a W4 form with your employer.
To check the status of your refund check, you can (click here).
For NewsChannel 11's Consumer Connection, I'm Sharon Maines.