It’s that time of year again and most people are trying to figure out what they’re going to do with their tax refund. So what’s it going to be? The new flat panel TV you’ve had your eye on. Possibly a wardrobe makeover. Perhaps it’ll just get frittered away on a lot of little things that you wouldn’t have otherwise bought.

Ok, it’s always said that we shouldn’t even get a refund because we’re giving the government an interest free loan, but every year we end up with a refund anyway. So I’m not going to lecture on that subject. The tax code is far too complex, and it’s practically impossible to predict how much your end of year tax bill will be. So if we can’t really know how much we’ll owe, how are we going to know how much to deduct from each paycheck? And to complicate it even further, we claim a number like 0, 1, or 2 and are expected to somehow translate this into how much is deducted.

With all this said, take your best shot at minimizing your taxes and then let it be and stop worrying about it.

My hope with this post now is for us all to take a minute and actually think and possibly make a plan for what we’re going to do with the upcoming windfall. Since it isn’t an amout of money that we usually count on, it wouldn’t make much sense to just lump it in with everything else and pay bills or go grocery shopping with it.

Here are a few ideas following the pattern I mentioned in an earlier post:

1. Give to a worthy cause or help out someone in need. Nothing makes you feel richer, more fulfilled, and more alive than when you’re in the service of others. This is why I mention this first. Take a shot at making someone else’s life better and see what happens in yours.

2. Start or add to an emergency fund. This is standard advice right? I want you to accumulate a years worth of living expenses. Too much stress in people’s lives come from financial insecurity. The peace of mind that comes from having this reserve cannot be overstated. The fridge goes out; you’re laid off at work; sudden medical bills crop up. This is as much a mental and emotional account as it is a financial one.

3. Once you have a start on the previous two, consider putting putting some money into an investment account. I’m not going to get into detail here about specific investments just yet. Just know for now that you need to start having your money work for you if you ever want to stop working for money.

These options should give you enough places to put your refund this year. And yes, it’s OK to indulge yourself a little, just don’t jeopardize your future over it. More on this later.

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