What To Do With Tax Refund
Updated September 30, 2021

15 Things to Do With Your Tax Refund That Will Make You Rich

Personal Taxes

We may receive a commission if you sign up or purchase through links on this page. Here's more information.

It’s tax season. That means that millions of Americans will be receiving unexpected hundreds, thousands, or possibly tens of thousands of dollars back in their bank accounts that they didn’t expect.

Now they are wondering what on earth they should do with all that money.

And the choice often comes down to two things: do something that will keep you poor vs. do something that will make you rich.

But before we jump into the things you can do to make you rich with your tax refund, let’s take a few steps back and consider why you got a tax refund in the first place.

Why Did I Get a Tax Refund in the First Place?

If you’re like most American taxpayers who got a refund this year, you have a W-2 job, and every time your paycheck comes around, your employer withholds money out of your paycheck to pay the tax withholding that the government requires you to pay in.

And if when you file your tax return it turns out that more withholding was taken out of your paycheck than the amount of tax you actually owe based on your income, you get a tax refund.

This means that getting a tax refund means that you gave more money to the government than you had to.  And guess what?  Uncle Sam didn’t pay you any interest.

So congratulations, you essentially gave the government an interest-free loan!

You May Want to Adjust Your Withholdings

Now, I don’t know about you, but as for myself and Ron Swanson, we’re not too keen on letting the government have any more of our money, even temporarily, than is absolutely necessary to avoid going to jail.

So it may make sense for you to actually reduce the amount of money  being withheld from your paycheck every month to go to the government.

Talk to the human resources folks at your employer to learn how you can do this.  It will typically involve increasing the number of allowances you’re claiming on your Form W-4.

Why Adjust Your Withholdings?

If you get less money taken out of your paycheck every pay period, that means that you have more money throughout the year to do what you want with.

Now, just like when you get your tax refund back, you have a choice what to do with your money: do something that will keep you poor vs. do something that will make you rich.

This comes down to the concept of delayed gratification.

Delayed Gratification

One of my favorite quotes goes something along the lines of, “Spend a few years doing what others won’t so you can spend the rest of your life doing what others can’t.”

I like this quote because it reminds me about the importance of delayed gratification, or putting off something that may be mildly rewarding now so you can enjoy something massively rewarding later.

And there is perhaps no other area of life where delayed gratification pays the most dividends as in the realm of personal finance.

15 Things To Do With Your Tax Refund That Will Make You Rich

So if you’re looking at a three-, four-, or even five- or six- figure tax refund, here are fifteen ideas for you to put your money to good use.

Now, we’ve broken down this list into three separate buckets of five ideas each.

  • The first bucket consists of ideas of how you can invest your tax refund money.
  • The second bucket consists of ideas of business ideas you can start using your tax refund money.
  • The third bucket consists of ideas you can use even if you want to splurge with your tax refund.

Now, you can certainly spread your tax refund across all these ideas!

Note that these ideas assume that you already have an emergency fund of 3-6 months’ worth of living expenses and that you have paid off all high-interest debt.  If you haven’t taken these preliminary financial steps, I recommend that you start there before jumping into the ideas below.

5 Ways to Invest Your Tax Refund

The earlier you start investing, the sooner you will reach your financial goals.

A 20-year-old who invest $3,000 a year into an investment yielding 10% per year for only 10 years will end up with a nest egg over $900,000 by the time she’s 60 years old, assuming all returns are re-invested.

But a 30-year-old who invests $3,000 a year into an investment yielding 10% per year for 30 years will end up with a nest egg of only $540,000.

Moral of the story: start investing early.  We’ve given you some ideas below to get you started.

1. Invest in dividend-paying stocks.

We love dividends here at Money Done Right.

When you invest in a dividend-paying stock, you are acquiring a portion of a company that somebody else built and that thousands of other people work for, and they are giving you a portion of their profits. Blows my mind!

There are plenty of great places to open up a stock-investing account, but the one that’s getting us hot and bothered at the moment is Ally Invest.

Ally Invest is great because you can trade dividend stocks for as little as $3.95 per trade compared to $6.95 at E*TRADE and Charles Schwab.

Ally Invest has developed a pretty amazing platform, and no matter if the stock market goes up or done, we still get dividends deposited into our Ally Invest account every quarter!

2. Invest in Real Estate With as Little as $500.

I’m a landlord.  My first investment was the mythical “house hack,” a 4-unit property I purchased using FHA 3.5%-down financing.

Read: How 20-Something Me Bought 4 Units in Los Angeles

And landlording’s great!  I still hold that 4-unit as well as another rental property, and they have been very good to me.

But landlording has a major drawback, namely, the amount of time it takes.

Time is Money.

See, I get a better financial return on my time by working on this blog you’re reading right now than I do by landlording.

I also get a better return on my time by servicing my CPA clients.

So rather than spending dozens of my valuable hours on Redfin or Zillow looking for properties I probably won’t even buy, I’d rather invest in hassle-free real estate deals that are way better than what I could find on my own.

(Come on; do you really think you’re going to find a good deal on Redfin where everyone else is looking?”)

Enter Fundrise.

So how do I invest in great real estate deals without being a landlord?

By investing through Fundrise.

Fundrise is the first private market real estate investing platform.

By combining technology with new federal regulations, Fundrise lets you invest in the once-unattainable world of private investments.

Better Deals Than I Could Find On My Own.

Fundrise lets everyday investors like you and me invest in top deals across the nation — way better deals than I could find on my own.

Don’t get me wrong; I love the properties I own and landlord.

But they weren’t by any means incredible deals.

I simply didn’t have the investment capital (we’re talking 7 and 8 figures) to access top deals like Fundrise does.


An extremely attractive feature of Fundrise is instant diversification.

For example, through Fundrise, I am invested in multifamily in Arizona, Colorado, Florida, Georgia, Michigan, South Carolina, Texas, and Virginia.

And I am also invested in loans funding deals in Los Angeles, Phoenix, and San Diego.

Fundrise Portfolio

Economies of Scale

Also, because Fundrise invests in large assets with many units, you get economies of scale.

  • If you own a single-family home, and you lose your tenant, you’re out of luck.
  • If you own a 4-unit, and you lose a tenant, you’re still making money.
  • But if you own a 100-unit apartment building, and you lose a tenant, there’s a professional management company on-site ready to show the unit immediately to minimize your vacancy losses.

Get Started With Only $500!

This is why I love investing in Fundrise: I get to invest as little as $500 into deals previously reserved for the richest of the rich.

Fundrise also offers a money-back guarantee.

For the first 90 days of your investment, they will buy your investment back at the original investment amount if for any reason you are not satisfied.

3. Lend money in $25 increments earning 4-6%.

Lending out money is one of the oldest ways to earn passive income.  It’s essentially renting out your money for either people to use, and the rent you charge is known as the interest rate.

Now, in the old days, if you wanted to lend money to somebody in particular, you were taking on a pretty risky business, unless he or she put up some form of collateral.  But now, thanks to technology, you can spread out the risk by only lending your money in $25 increments.

How does this work?  Well, let’s say Borrower A needs a $25,000 loan.  Instead of going to one entity, like a bank or rich person, to borrow the full $25,000 — which would be very risky to that one entity — he or she borrows $25 from 1,000 people.  This scenario presents much less risk because the most any single investor could lose is only $25.

Such an arrangement would have been administratively impossible just 15 years ago.  But thanks to the wonders of the Internet, it is now very possible, and the peer-to-peer lending industry, as it’s known, is thriving for borrowers and investors alike.

4. Put money into high-yield savings accounts.

Yeah, this one’s pretty boring and doesn’t have the pizzazz as the others, and you won’t make nearly as much money.  But it’s also the least risky by far.  We recommend Capital One.  They have no fees, a 0.75% APY on savings accounts, and will give you $25 for opening an account if you deposit at least $250 at account opening.

5. Invest in cryptocurrencies like Bitcoin.

Many people have become unlikely millionaires by investing in cryptocurrencies, and the concept of cryptocurrencies is not without merit.

If you would like to receive a $10 bonus to start investing in Bitcoin and other cryptocurrencies, please click my Coinbase $10 Sign-Up Bonus Link to buy some right now (the markets are 24/7).

Related: [$10 Bonus] I Finally Bought Some Bitcoin.  Here’s Why.

5 Side Businesses You Can Start With Your Tax Refund

Starting a side business can be an incredible way to build wealth.

Consider using your tax refund as seed money for one of the endeavors below.

6. Start a blog.

I love blogging!  Not only do I find it extremely enjoyable to share what I know about my passion (personal finance) with others.

 If you would like additional information about setting up your blog as well as making money from it (and more!), I recommend that you sign up for my free blogging e-course below.

E-books can be an incredible source of recurring residual income, month after month and year after year.  You put in a lot of work now, and you profit for the rest of your life.  And thanks to technology, it’s easier than ever to become a published author.  You can do it all yourself on platforms like Amazon Kindle!

8. Create an online course.

This is basically tutoring on steroids.  Also, an online course has the potential to become an incredible passive income stream since you only have to put in the work once to profit forever.  If you’re interested in creating an online course, I recommend you click here to sign up for a FREE webinar on how to launch your own profitable online course.

9. Design T-shirts.

Did you know that over 2 billion T-shirts are sold every year?  It’s true!  Think about how many T-shirts you own.  Probably at least a dozen or two, right?  And consider the fact that every one of those T-shirts had a designer who was paid handsomely for his or her creativity.

And just one or two T-shirts that you design today could provide you with passive income for years to come!  And you can get started designing T-shirts from the comfort of your own home.

That’s right.  Somebody else can handle for you all the production, inventory, and shipping.  It’s true!  Interested?  Then click here to check out our full article on this very subject “How to Make Money Selling T-Shirts Online.”

10. Sell your photos.

Are you good behind the camera?  Then you can make a somewhat passive side income licensing your photos online for others to download.

For example, I get all my pictures for this blog from various stock photo sites on the Internet.  And every time I download a photo, the photographer who uploaded it gets a royalty!

Licensing one picture that you take and upload now can give you cash flow forever as it’s downloaded again and again!

Sound appealing?  Click here to get an exclusive discount on a 4.5/5.0-rated course taken by over 1,200 photographers to learn exactly how you can make extra income licensing your photos online.

5 Ways to Make Money If You Really Want to Spend

If you really can’t help yourself from spending your tax refund, consider these ideas!

11. Get paid to shop on Amazon.

If you’re a regular Amazon shopper, you can earn money each month simply by letting a research company track your purchase history.

Shoptracker will instantly send you a free $3 Visa gift card, plus another $3 for every month you keep it installed if you sign up through our link.

12. Get paid to go shopping in-store.

Ibotta gives you cash back simply for snapping photos of your shopping receipt from your phone! We have made hundreds of dollars using this app, and you can get started today.  Also, if you sign up through my Ibotta $10 Sign-Up Bonus Link, you’ll receive a $10 sign-up bonus just for trying Ibotta!

Read my article Ibotta Review: Why you NEED This Money-Making App for more information about Ibotta!

13. Get paid to shop online.

Rakuten (formerly Ebates) gives you cash back just when you shop online through hundreds of vendors. Also, if you sign up through my Rakuten $10 Sign-Up Bonus Link, you’ll receive a $10 sign-up bonus when you make your first $25 in purchases through Rakuten.

Read my article Rakuten Review: It’s Simply the Best Cash Back Website for more information about Rakuten!

14. Buy a Fitbit and get paid to walk.

I just made $10 for walking, paid in cash via PayPal.  It’s true!

There’s a new app, Sweatcoin, that will pay you for every step you take.  It motivates me to go for more runs, take the stairs more often, and be an all-around more active person.

If you’d like to get paid to walk too, click here to sign up for Sweatcoin now!

And this isn’t even the only way I’m making money by exercising.  I’m also getting paid $480 to lose weight!  Learn more in my article I’m Going to Get Paid to Lose Weight with HealthyWage!

15. Buy a gym membership and get paid to lose weight.

If I reach my goal weight, I’m going to collect a cash prize of $1,272.  And you can do it too.  Some folks have won $5,000 and even $10,000!  Click here to get the details!


Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

Back to top  
Notify of

Inline Feedbacks
View all comments