The Money Couple Minute - 6 Tax Refund Tips: Save or Splurge?

More than half of all Americans will get a tax refund this year. Since the average refund is around $2800, that money can make a significant difference in your financial picture.

This money decision, like every other money decision, calls for solid financial communication. Once you know what your refund will be, use some of your Money Huddle time to discuss what you'd like to do with the cash. Here are some ideas:

1. Don't do anything until you have the money. It's so tempting to spend that refund as soon as you know it's coming. But life being what it is means that you never know what's coming - both good and bad. In the few weeks between the time you send in your return and the time you get your check, you might have a job change, the TV might die, your child might get accepted to a more expensive college, a friend might fall on hard times and need some help. So be patient and wait until you have the money in hand before you spend it.



2. Dial down your debt. Remember that debt costs you money in interest. So if you have debt, make paying it down your top priority. Money you don't have to pay a credit card company is money you can use in other ways.



3. Take stock of your stocks. This is a great time to look over your retirement savings, college funds, and other long-range investments. Depending on the size of your refund, you can add several months worth of funds to these accounts and reap the rewards down the line.



4. Fund an emergency account. We meet with a lot of couples who have all their money tied up in investments. And while those are great, it's smart to have a decent stash of money - maybe two or three months worth of living expenses - in a liquid account in case you need it for the proverbial rainy day.



5. Spend smart. If your overall financial picture looks good, then talk about how your family can make the most of this money. Take a fun vacation, make some memories, or purchase something the whole family can enjoy.



6. Give it away. So many non-profits are struggling in this recession that even $1000 can go a long way toward helping others. Give to your faith community, your child's school, or a charitable organization that you already support. There is no end to the ways you can give to your community.

Tax time can be a headache, but when the numbers add up in your favor it can be a nice little breather for your budget.