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How should you spend your tax refund?


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Zoe Romanowsky - published on 04/29/22

If you're getting money back this year, consider these ideas before you spend it.

You may be among the 77% of Americans who will be getting a tax refund this year. And a refund always comes with the question: How should I spend it?

While the Catholic Church may not be first place you think of turning to when it comes to financial advice, she offers us principles to apply to the decisions we make about using our resources for the good of ourselves, our loved ones, and the larger community.

There is a concept in the Church’s social teaching called the Universal Destination of Goods, and it is rooted in the idea that God gave the earth to the entire human race for the sustenance and well-being of all its members without excluding or favoring anyone. John Paul II wrote in Centisimus annus that “this right applies to both the necessities of life and the tools for … progress.” 

We are all stewards of these “goods” as they come to us, including our money. We are not meant to simply take what we can for ourselves, but to think about how we can ensure that others’ needs are met and that our resources are being used and spent in the best ways.

So here are some considerations to keep in mind when to comes to spending your tax refund.

Ask: Who needs it most?

For many of us, a tax refund provides immediate relief — we have debt to pay down, college tuition to save for, a new home on the horizon, medical bills, or repairs that have unexpectedly cropped up. These are all important and worthwhile ways to spend a refund and our first responsibility is to our own family’s needs.

But even if we need to take care of these kinds of matters with extra money we receive, can we take a part of it and give it to someone who has even less?

There are many ways to do this through our parish and reputable charities, or directly to someone we personally know who has fallen on hard times or needs help. If we reflect on the question of who needs it most, we can prioritize where to allocate our money and perhaps spend it on more than one way.

Pray for inspiration and guidance

Even if you think you know exactly what you should spend your refund on this year, God may have something else in mind. It’s a good idea to be open to the Holy Spirit’s promptings. Maybe you planned to make an extra mortgage payment, but when you take the question to prayer, you find yourself being drawn to give it to friend who’s lost his job, or to a group that helps refugees or gets clean water to those who need it. If someone or something keeps coming to mind, pay attention to that.

Nothing we have is ultimately just our own — it belongs to God, and we are His stewards helping Him get it to where it needs to go.

Be not afraid to do something “extra”

Many of us automatically do the responsible thing — and we do it for others. But we forget that sometimes one of the best things to spend extra money on is something that brings beauty and joy, lightens our load, or improves our relationships.

It is not irresponsible to use a tax refund for a getaway with friends you haven’t seen for a long time, a second honeymoon, a family vacation, a piece of original art, a therapeutic massage, or even a new mattress or sofa. Leisure, rest, health, connection with others — all of these are important and often don’t get prioritized in our busy lives when we have limited income and many important things to spend it on. Spending money on these “extras” can help us to be our best, strengthen our important relationships, and grow in our love of God’s beauty and goodness.

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