TULSA, Okla. — Whether your state and federal tax refunds are large or small, financial experts say it is an opportunity to strengthen your financial foundation, not just an excuse to spend.
Early 2025 IRS data shows refunds are already hitting bank accounts, and the temptation to spend can be strong. But Belinda Silva, a consumer expert at Bank of Oklahoma, says a little patience can go a long way.
"It's very, very important to just take a step back and, you know, be intentional about how you're using those funds," Silva said.
Her first piece of advice: "Having a strategy for that money before you receive it," Silva said.
So what does that strategy look like? Silva breaks it down into four priorities.
Build your emergency fund first. Most people don't have a financial cushion set aside for unexpected expenses.
"So, first, I recommend that we prioritize the emergency fund," Silva said. "Having a plan for unplanned expenses, emergencies."
Then, tackle high-interest debt. Silva recommends directing at least some of your refund toward paying down high-interest debt, such as credit card debt.
"And then after that, working towards advancing your long-term goals for the future, like retirement, planning for your children's school, right? Anything like that," Silva said.
Finally, give yourself permission to spend — but with intention. Silva says it's OK to enjoy some of the refund, but warns that spending most of it without a plan can have lasting consequences.
"So, it is very important that you can spend some of it, but having a plan, a strategy for those funds that are coming in," Silva said.
Silva also notes that the same strategy applies to year-end bonuses, which often arrive around the same time as tax refunds.
Without a plan, she warns, even a sizable refund can be spent in ways that quietly undermine your financial progress.
The bottom line: you earned that money. With a strategy in place, you can enjoy some of it while making the rest work for your future.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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