By now, your tax refund should be safely nestled in your bank account, so what should you do with the extra money? Most people spend it on something nice or sock it away, but we talked to financial advisors about some clever, outside-the-box ways to use your refund.
1. Buy I bonds
Prices have increased almost 9% year-over-year because of inflation, which means your income and your savings have less purchasing power than they did a year ago.  Essentially, your money is worth a little less.
Series I Savings Bonds pay interest at a rate that offsets inflation. From May through October this year, that rate is 9.62%.  They earn interest for up to 30 years. You can cash them after one year, but you’ll lose three months of interest if you cash out before five years.
Individuals can buy up to $10,000 worth of electronic I Bonds each year at any time on the TreasuryDirect website, but Julie Hall, a certified financial planner, pointed out that you can also direct your tax refund toward an additional $5,000 in paper I bonds using IRS form 8888. You can only do this when filing your return, so at this point, it’s something to remember for next year.
You may need to adjust your budget to account for inflation as well. Many people try to save enough money to cover three to six months of expenses in the event of an emergency. Because of inflation, a reserve that previously covered you for 90 days will now run empty after 81 days. In addition, you probably have less to put away because of how much more expensive everything has gotten.
A refund is a good occasion to re-examine your spending and shore up your savings account, says Joe Piszczor, a certified financial professional at Stein Wealth Advisors.