What Not to Do With Your Tax Refund

Though you may be tempted to treat it as such, a tax refund is not free money. Renae Wang

Tax time: that interesting time of year when ordinarily smart people begin to make really dumb financial decisions. Isn’t it amazing to watch what a little extra cash, otherwise known as a tax refund, lining the pockets can do?

Random online polls suggest that 61 percent of U.S. taxpayers expect that this year, they'll receive some sort of refund on their returns. While there are many ways to spend money, I thought today would be a good day to review my top five dumb ways to spend a tax refund.

Act Like It’s Free Money

The operative word in the term “tax refund” is “refund”! Common synonyms for refund are “repayment,” “reimbursement,” and “return of overpayment.” Tax refunds aren’t free money. The government isn’t giving you a bonus every year just to thank you for being so awesome.