How not to waste your tax refund

tax_refund.top.jpgBy Tyler Cowen, Money Magazine contributing writer


(Money Magazine) -- What's that in your mailbox (or directly deposited into your checking account)?

Woo-hoo -- your refund from the IRS! But that giddy feeling can lead you to squander most or all of the dough on stuff you don't really need. Here are three ways to make it easier to save at least some of it.

Break the money into parts.

Immediately put the lion's share into your savings account and divide the rest -- in cash -- between yourself and your spouse. New research by Amar Cheema and Dilip Soman, professors of marketing at Washington University and the University of Toronto, respectively, indicates that this move helps make you thriftier.

When money is split up, you need to ponder which pile to draw from, making it less likely you'll blow the whole amount. Spend just enough so you don't feel deprived (which itself is a recipe for overspending).

Make it harder to shop online.

The computer has become a huge source of temptation to spend. So delete bookmarks for shopping sites you visit. Take yourself off their e-mail lists. Disable "one-click ordering." Adding just a few steps more to a task makes people less likely to do it.

Return the dough to the IRS and prepay your 2010 taxes.

Yes, it's an interest-free loan to Uncle Sam, but you're making almost nil on your savings account these days anyway. And sending the money to the Treasury is a heck of a lot better than frittering it away.  To top of page

 
Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.45%4.43%
15 yr fixed3.89%3.89%
5/1 ARM4.17%4.22%
30 yr refi4.44%4.43%
15 yr refi3.87%3.87%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 24,580.89 119.19 0.49%
Nasdaq 7,692.82 -20.14 -0.26%
S&P 500 2,754.88 5.12 0.19%
Treasuries 2.90 0.00 0.10%
Data as of 6:29am ET
Company Price Change % Change
Comcast Corp 33.81 1.02 3.11%
Bank of America Corp... 28.99 -0.30 -1.02%
General Electric Co 13.05 0.29 2.27%
AT&T Inc 31.69 0.09 0.28%
Micron Technology In... 57.10 -2.34 -3.94%
Data as of Jun 22

Sections

One of the world's leading smartphone makers is aiming for the biggest stock market listing in nearly two years. More

If Trump puts tariffs on European cars, it would hurt automakers who build a lot of cars in the United States. More

Russian trolls posing as an American college student tweeted about divisive social, political and cultural issues using an account that amassed thousands of followers -- and appeared in dozens of news stories published by major media outlets -- as recently as March. More