Mar 11, 2025

Smart Ways to Spend and Save Your Tax Refund

A young woman does her taxes, with papers and a laptop on the table.

The refund check is in, and now comes the fun part: figuring out what to do with it. You might be tempted to splurge on a weekend getaway or that high-end gadget you’ve been eyeing, but before you start spending, take a minute.

Sure, your tax refund can be looked at as extra money for fun but it’s also an opportunity. Whether you use it to get ahead on bills, grow your savings, or make an investment in your future, the way you handle it now can set the tone for your financial health for the rest of the year. Here’s how to spend and save it wisely without sacrificing a little fun along the way.

Invest in Your Future

You know that sinking feeling when an unexpected bill lands in your inbox? Whether it’s a flat tire, a surprise medical copay, or a home repair that just can’t wait, life has a way of throwing expensive surprises. An emergency fund is your financial cushion for those moments.

Where to start:

  • If you don’t have any emergency savings, start with a small goal: $500 to $1,000 is a solid first step.

  • For better growth, stash it in a Money Market Account, so your money grows while staying easily accessible.

Break Free from High-Interest Debt

Credit cards are great until you’re stuck making minimum payments on a sky-high balance. If part of your tax refund goes toward paying off high-interest debt, you’re giving yourself a raise by cutting out those extra interest charges.

How to do it wisely:

  • Focus on your highest-interest debt first (credit cards, payday loans).
  • If you’re juggling multiple debts, consider a lower-interest balance transfer or personal loan to consolidate payments.
  • Once you pay off a balance, redirect that monthly payment toward savings.

Elevate Your Savings with a Certificate Account (CD)

If you have your everyday finances under control, it’s time to make your refund work for you. A Certificate Account (CD) is a great way to grow your money with zero risk.

Why a CD?

  • Guaranteed returns (no stock market guesswork).
  • Higher interest rates than a savings account.
  • No temptation to spend it since the money stays locked in until maturity.
If you don’t need immediate access to your refund, this is a smart, hands-off way to boost your savings. 

And here’s something you won’t find everywhere: Many of Hughes’ CD rates have been consistently certified as outperforming the Tucson market, as reported daily by Datatrac, the largest independent research firm that compares interest rates for banks and credit unions across the U.S. 

Pro Tip: You can even ladder your CDs, meaning you open multiple certificates with different maturity dates to ensure you have regular access to funds while still earning the highest possible interest.

Make Your Home or Car Work Smarter

Sometimes, spending money now can save you even more later. If your home needs energy-efficient upgrades or your car needs repairs that you’ve been putting off, your refund might be best used for these investments.

Smart upgrades that save money over time:

  • Home efficiency upgrades (like smart thermostats or improved insulation).
  • Car maintenance that prevents bigger repairs down the road.
  • Paying down a car loan (freeing up future cash flow).

For bigger projects, Hughes' Home Equity Line of Credit (HELOC) can help stretch your refund even further while keeping interest rates low.

Boost Your Career or Education

One of the best investments you can make? Your earning potential.

If you’ve been thinking about learning a new skill, earning a certification, or taking a course that could lead to a higher-paying job, now’s the time to do it.

Ways to invest in yourself:

  • Enroll in an online class to boost your resume.
  • Take a professional certification exam in your field.
  • If you have student loans, make an extra payment toward the principal.

Education pays off. Even small steps toward growing your skills can lead to better job opportunities and a higher income in the future.

Start a Holiday Fund (Because December Always Sneaks Up)

Holiday shopping can get expensive. Between gifts, travel, and festive activities, it’s easy to overspend in December. But what if this year, you planned ahead?

How to do it:

  • Open a separate savings account like the Holiday Club Savings account just for holiday expenses.
  • Set aside part of your refund. Even $200 now can mean less stress later.
  • Automate savings. Transfer a small amount every payday to keep building your holiday fund throughout the year.

Enjoy a Guilt-Free Splurge … Within Reason

You worked hard all year, and it’s totally fair to use part of your refund on something fun. The trick is balance.

Instead of blowing it all, follow the 80/20 rule:

  • 80% toward financial goals (savings, debt, investments).
  • 20% for fun: a nice dinner, a weekend getaway, or something you’ve wanted for a while.

And if you’re going to spend, shop local! Hughes members with Checking PLUS can enjoy discounts at Tucson businesses, letting you support local shops while saving money.

Get Your Tax Refund Faster with Direct Deposit

Before you start allocating where your refund will go, set yourself up for success by opting for direct deposit.

Hughes Makes Direct Deposit Easy

  • Faster access – No waiting for a paper check.
  • Secure and reliable – No risk of lost or stolen checks.
  • Easy allocation – You can split your refund between savings, checking, and other accounts.

Direct deposit into your Hughes account means you’ll have your refund at your fingertips the moment it’s processed so you can put it to work right away in a Money Market Account, Certificate Account (CD), or savings fund.

Make Your Refund Count

A tax refund is one of the few times a year you get a chunk of extra cash, and what you do with it now can set you up for long-term financial success. Whether you use it to build your emergency fund, wipe out debt, grow your savings, or make a smart investment, it’s all about being intentional.

Explore high-yield savings options at HughesFCU.org/Save and start growing your refund today.

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