If you've ever benefited from a tax refund, here are a few ways you may be able to invest this money back into your personal and financial health.
1. Pay Off Existing Debt
Planning for the future is difficult if you're still dealing with debt from the past. Consider using your tax refund to help pay off any existing debts you may have, whether it's a credit card balance, personal loan, or any other outstanding obligation. Reducing your debt can help reduce stress, open up your monthly budget, or help future you. Additionally, this may aid your approach to financial planning with added clarity and without the emotional burden debt often carries.
2. Build an Emergency Fund
Life can be filled with unexpected expenses, and it's important to build an emergency fund if you don't already have one. Some recommend you should have enough saved to cover three to six months' worth of expenses. Even if you can only afford to save a small amount of money for your emergency fund, saving a little is better than nothing at all.
3. Consider Maxing Out Your HSA Contributions
If you have a Health Savings Account (HSA) and are able to contribute, it is important to remember that contribution limits may change from year to year. If you have not already contributed the maximum amount allowed for the calendar year, you may be able to add a one-time lump-sum contribution. Be sure to consider amounts already contributed by you or your employer. HSA funds not used for eligible expenses can roll over from year to year.
4. Contribute to Your Retirement
Any time you receive extra money, consider using some of it to increase your retirement savings, subject to applicable plan rules, eligibility requirements, and contribution limits.
Learn more about retirement contribution limits and eligibility rules
The Bottom Line
These are just a few ways you can help build for your future with the money you may receive through a tax refund. Whether your refund is $500 or $5,000, it's a great opportunity to put that money to work for your future.
This blog is up to date as of August 2026 and has not been updated for changes in the law, administration, or current events. American Fidelity does not provide financial, legal, or tax advice. Consult an attorney or a tax professional regarding your specific situation.
*HSA contributions are not subject to federal and most states' income tax. State income tax may apply in California and New Jersey. Please consult a tax advisor for your state's specific rules.
**Employer contributions are relatively rare for 457(b) plans, but any contributions your employer makes on your behalf count toward the individual contribution limit. Unlike 401(k)s and 403(b)s, there is no separate employer contribution limit for 457(b) plans.
