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Whether you file your taxes yourself, enlist the help of an online service or advisor, or forward your W2 to mom and dad for filing (no judgment here), your careful tax preparation could mean you’re hoping for a refund from the Internal Revenue Service (IRS).

Naturally, earnings, deductions, and credits will vary across taxpayers, but in 2021, the IRS issued over 128 million individual income tax refunds, totaling $355 billion. The average refund was $2,775, up 11.2% from last year. So if you are anticipating a tax refund from the IRS in 2022, what are you planning to do with your check or direct deposit? Take a look at our list of ideas that can help you use your refund toward your wants and goals.

If you want to increase your savings …

1. Invest in your retirement account.

Why not give “future you” a little boost? Stashing away and investing tax refunds in an investment account now could give it plenty of time to grow over the years, which can make it a smart addition to your retirement plan. If you don’t already have an Individual Retirement Account (IRA) or a Roth IRA, this could be a great time to consider getting one started.

2. Bolster your emergency fund.

Ideally, your emergency fund should hold three to six months of expenses, but you might find it tough to grow your savings when you’ve got bills to pay, groceries to buy, and life to live. Your tax refund can add a nice cushion to your rainy-day fund, which you’ll probably be thankful to have at some point. You know how unexpected expenses can pop up at any time! Putting money into savings from your tax refund can allow you to save smart.

3. Build a CD ladder.

Laddering CDs (certificates of deposit) is a strategy that can help your savings perform smarter for you. Rather than keeping your extra cash stored in a savings account, a CD ladder allows you to take advantage of the higher rates generally offered by long-term CDs while still maintaining regular access to your money. Ally Bank offers a range of CDs that can deliver returns over several years at a time.

4. Pay down credit card debt.

Credit card debt can incur some of the highest interest rates you’ll find, which can make it difficult to pay down. When you have the chance to knock some of it out, take advantage of the opportunity to reduce (or even eliminate) some of your debt.

If you’re in the mood to treat yo’ self …

5. Make a down payment on a car.

Thinking of upgrading your ride? Using your tax refund to supplement your down payment could be a great way to get in a new set of wheels. That’s because a larger down payment can help reduce the finance charges you’ll pay over the life of your contract.

6. Take a vacation.

You might be surprised at how far you can go with your tax refund. Whether you’re in the mood to visit somewhere tropical, historical, or cultural, use this do-re-mi for some P-T-O. Or stash it in a savings bucket, , a feature of Ally Bank Online Savings Accounts, dedicated to vacations so it can grow until you’re ready to hit the road.

7. Make a special purchase

Maybe you’ve dreamed of owning an original piece of art to hang in your bedroom or you’re planning on proposing to your partner in a few months. If you’ve had your eye on a special item that’s out of your typical budget, this could be the boost you need to help you buy.

If you love to share …

8. Adopt a pet.

Repeat after us: Pets are expensive. If you’re hoping to expand your family with a furry friend, you might consider using your tax refund to adopt a pet, cover its adoption and initial vet fees, and stock up on food (and some toys, of course). That way, you’ll start pet parenthood off on the right paw.

9. Donate to your favorite cause.

Giving to a charity or other organization is a selfless act that can provide a deeply joyful feeling. But for many budgets, regular donations may not be feasible. Donating a portion of your tax refund to a charity can be a meaningful way to make the most of your money.

10. Send your kiddos to summer camp.

A week away is often an unforgettable experience — but it typically isn’t cheap. Some day camps can cost a couple hundred dollars a week and some overnight camps can range into the thousands. Put your tax refund toward a week of fun for your kids (and just as important, a week of R&R for yourself).

If you’re seeking some change …

11. Do something you’ve never done before.

What have you always wanted to do? Hike the Appalachian Trail? Get front-row tickets to a ball game? Go on a deep-sea fishing charter? Forgo material items and use your refund to splurge on a once-in-a-lifetime experience.

12. Redecorate a room.

You can only rearrange your living space so many times. Take this opportunity to finally buy a new coffee table, reupholster your dining room chairs, invest in a hall rug, go eco-friendly, or a fresh coat of paint to finally give your space the look you’ve been envying on your inspiration board.

13. Learn something new.

Use your extra chunk of change to expand your horizons. Put it toward learning a new skill, like taking a cooking class, getting your yoga certification, or a public speaking workshop. Or use it to enroll in a class at your local community college on a topic that interests you.

14. Ramp up your fitness journey.

Whether you’re new to fitness or well into your wellness journey, you’ll probably agree that living healthy can be costly at times. Consider setting aside your tax refund to cover gym costs or a membership to a fitness studio for a few months or possibly even invest in a piece of exercise equipment for your house.


A windfall in your savings account may seem exciting, but the endless options on how to use it can feel overwhelming. Without a plan, you may end up spending and saving without intention, leaving you feeling like you have nothing to show for it. So take some time to think about your goals and how a boost can help you get there.

Want to stash your tax return this season and watch it grow? Say hello to smart savings tools, such as buckets and boosters, a feature of Ally Bank Online Savings Accounts. Learn how to transform your money with Ally.