There are two certainties in life: death and taxes, or so it’s been said.  While the thought of filing taxes may not fill you with delight, for many Americans, receiving a tax refund could be the mini financial windfall they need to get back on track with financial goals that may have gone awry during the year.

Whether you’re a millennial, or a GEN X, Y or Zer, these five actions offer a great way to start. They can help you leverage your tax return to improve your financial and emotional confidence.


After over a year of living through a global pandemic, most people realize that life can be unpredictable. To avoid accruing debt in an emergency, bolster your savings cushion.1

Financial professionals generally recommend keeping six months of expenses in savings, and you can kick-start that savings goal with your tax refund. Note that this recommendation is for a length of time — not a specific dollar amount. Why? Because everyone’s monthly expenses are different. To know the right savings amount for you, start tracking your expenses. It can be as simple as recording every purchase in a spreadsheet or finding a phone app that will do the job.


Nobody wants to worry about an injury or an accident that will cause loss of work. But it happens. In fact, over 25 percent of today’s workers will face this situation.2 To help protect yourself against a potential loss of income, consider using part of your tax refund to purchase individual disability insurance. If you get sick or hurt and can’t work, an income protection policy can provide a portion of your income while you recover. Then you’re able to concentrate on getting better — without draining your savings and while maintaining a consistent lifestyle for you and your family.  Many disability insurance plans offered through employers only cover up to 50% of your income, but could you live in half a house or drive half a car?


Another valuable option for your tax return is whole life insurance. A whole life policy provides money to your family in the event of your premature death. Yet it can do even more. As you pay the monthly premium, the whole life policy slowly increases in cash value.3 During your lifetime, you can use this money towards major expenses, like starting a business, buying a house or funding your child’s college education.4 In this way, whole life insurance diversifies your financial portfolio and can provide a source of funds insulated from market volatility.


Notice that paying down debt is prioritized after securing savings and protecting you and your family. Of course it’s important to eliminate debt, but it’s even more critical to get out of the cycle of debt if you’re in one. Once you have savings and protection policies in place, you may not need to turn to credit cards or high-interest loans in case of emergency. Then, with these protections in place, it becomes wise to pay off any debt.


You know the expression: an investment in oneself is an investment in the future. Your tax refund can provide the opportunity to act on this idea. Consider putting some of the money towards continuing education classes or a professional certification that can help increase your earnings moving forward. What skills can you learn to boost your hiring appeal? A tax refund can open new doors to learning.  Or, if you’re among the many Americans feeling pandemic burnout, it’s ok to spend on self-rejuvenation too: sign up for a yoga class, invest in a personal trainer or take that long-deferred family weekend away.

This spring, some people will receive a nice little windfall from Uncle Sam. How you choose to spend it depends on your current level of savings, protection and debt, as well as your dreams for the future. A financial professional can help you decide how to distribute your income, whether it’s a one-time refund or over the course of your entire career.


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2021-118467 Exp. 3/2023