The Average Tax Refund Is $3,000—Suze Orman Says This is How to Spend It Wisely

Tax season is here, and for many Americans, that means a tax refund is on the way. The IRS reports that the average tax refund so far this year is about $3,284, up 4.2% from last year's average. 

And while $3,000 can feel like a financial windfall, personal finance expert Suze Orman advises that it's important to have a plan for spending your refund wisely. Here's what she suggests to make the most of your tax return: 

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1. Boost Your Emergency Savings

Orman recommends that everyone aim to have enough emergency savings set aside to cover at least three to six months of living expenses. If your emergency savings is lacking, using part of your refund to build it up can give you peace of mind and protect you from relying on credit cards or loans when unexpected expenses arise.

Orman suggests looking into high-yield savings accounts that offer bonuses or higher interest rates. "If there is a financial pressure point in your life, your tax refund…is a great opportunity to reduce that pressure," Orman says in her blog.

2. Pay Down Credit Card Debt

If you're carrying a balance on your credit cards, using your refund to pay down that debt can save you a significant amount in interest over time. Many credit cards charge interest rates of 22% or higher, which can make it difficult to get ahead financially.

Paying down high-interest debt not only reduces the amount of money you lose to interest payments each month but also improves your overall financial flexibility. However, Orman advises that this strategy works best if you commit to avoiding new credit card debt moving forward.

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3. Contribute to a Roth IRA

Orman says investing in your future is another smart way to use your tax refund. She recommends considering a contribution to a Roth IRA, which allows your money to grow tax-free.

In 2025, individuals with a modified adjusted gross income below $150,000, or below $236,000 for married couples filing jointly, can contribute up to $7,000 to a Roth IRA. If you're 50 or older, you're eligible to contribute up to $8,000. This approach allows you to grow your retirement savings while potentially reducing your future tax burden.

4. Invest in Yourself

Orman also suggests using your refund to invest in your skills or career. Taking a class or attending a workshop could help you qualify for a better job or increase your earning potential.

"Maybe it's something you are interested in as a new career or hobby. Or maybe you want to build your skills for work," Orman writes. "Investing in you is always smart." 

If the course is work-related, your employer may even cover some or all of the costs.

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5. Create a Plan Before the Money Arrives

Orman emphasizes the importance of deciding how to use your refund before you receive it. Without a plan, the money can easily disappear on day-to-day expenses without making a meaningful impact on your financial future.

Taking the time to think about what financial stressors you face and how your refund can help reduce them can set you up for long-term success. Whether you're saving, investing, or paying down debt, a thoughtful strategy can help you make the most of your refund.

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