Audio: The Upside of Tax Refunds

Why receiving a refund from the IRS can be a good thing, contrary to traditional advice.

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Over the weekend, I spoke with Tess Vigeland on Marketplace Money about the upside of receiving a tax refund. Yes, we’ve all heard the traditional advice: If you receive a refund, then you’re giving Uncle Sam an interest-free loan. But there are benefits to receiving a refund, too. We can use it an opportunity to pay off debt, start an emergency fund, or splurge on something fun. If we instead receive slightly bigger paychecks all year long, then the money is more likely just to disappear. While it makes sense in theory to pay the correct amount, in practice, a refund can give us the chance to get a little pick-me-up once a year.

You can listen to the interview here (and learn how I’m spending part of my refund).

What do you think—do you enjoy your refund, or do you follow the traditional advice and try to pay the correct amount throughout the year?