Dear Chuck,
Procrastinators Unite! This weekend, my husband and I will be crashing on our tax returns, due Monday, April 18^th, and we’re hoping to receive a return. What do you suggest we do with the money?  
Procrastinator

Dear Procrastinator,
It is never best to wait until the last minute to do your income tax return but it is better than not filing or filing late!

Since the majority of filers will receive a refund, this is a great question; especially when the average tax return in 2015 was $3,120.  Usually, I wouldn’t turn to a poll to offer advice, but I’m going to make an exception today after reading about a new one out from Bankrate.com. Despite assertions that the economy is doing well and unemployment is down, most people are experiencing stagnant wages with little job growth.

Better than Shopping.

Bankrate found our present economy is impacting how people intend to use their money with “84 percent of Americans receiving refunds intend to pay down debt, save or invest their windfall or use it for everyday necessities.” In fact, only 7 percent said they intended to spend the money or take a vacation with the cash.

I thoroughly applaud the more than 8 out of 10 Americans intending to hold on to that cash. At Crown, we advise that a good budget begins with $1,000 in an emergency fund followed by a plan to get debt free and stick with a plan. According to the Pew Charitable Trust, 80 percent of Americans are in debt, though that does include people with a mortgage. Still, about 4 in 10 people have expensive consumer debt like credit card debt, student loans or car loans.

Pay Down Debt. 

Debt is an anchor that destroys the freedom of being available to do whatever God calls us to do.. When we owe money, we are obligated to meet the terms of the one who holds our finances hostage. Proverbs 22:7 puts it like this, “The rich rule over the poor, and the borrower is slave to the lender.”

Catch Up on Retirement. 

If you are getting a refund, already have an emergency fund AND are debt free, consider investing in a Roth IRA, which allows you to prepare for retirement. Because you would have paid tax on the money invested, you don’t have to pay taxes on the withdrawals during retirement. This kind of investment makes sense and will help save on future taxes, especially for people in the lower and middle-income range.

Make Adjustments. 

And while I will always encourage people to save for their later years, consider changing your deductions to eliminate most of your withholding if you are getting a large tax refund. In essence, you’ve made an interest-free loan to the government. On the average tax return of about $3,000, a change in withholding could mean about $250 more a month in your pocket to put in savings now and earn some interest on your money.

Of course, the most important caveat of that withholding change is that you do save the money!