Bigger Tax Refunds Prompt Advice on Smart Money Moves

Financial experts recommend using unexpected refund money to pay down debt and boost savings.

Published on Mar. 4, 2026

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With many Americans receiving larger-than-expected tax refunds this year due to changes in the tax code, financial advisors are offering guidance on the best ways to use that extra money. Top recommendations include paying down high-interest credit card debt and building up emergency savings, especially for those living paycheck-to-paycheck. For those on more solid financial footing, putting the refund into general savings is also advised.

Why it matters

Tax refunds represent a significant financial windfall for many households, and how that money is used can have a big impact on an individual's or family's overall financial health and stability. Paying down debt and building savings are two of the most impactful ways to improve one's financial situation.

The details

According to Amelia Dow, CEO of Portland Trust Company, the best uses for an unexpected tax refund are typically paying off high-interest credit card debt and establishing an emergency fund with at least one month's worth of living expenses. For those in more stable financial situations, Dow also recommends putting the refund money into general savings accounts.

  • Tax season is currently underway in 2026.

The players

Amelia Dow

The chief executive officer of Portland Trust Company and an experienced financial advisor.

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What they’re saying

“If you are someone who has a stable income and you are dependent on that coming in to live week to week, you really need to have at least a month's worth [of income]…set aside in an emergency fund.”

— Amelia Dow, CEO, Portland Trust Company (newscentermaine.com)

“I don't think that one means you can't have the other.”

— Amelia Dow, CEO, Portland Trust Company (newscentermaine.com)

What’s next

As tax season continues, more Americans may receive larger-than-expected refunds, prompting ongoing discussions about the best ways to utilize that extra money.

The takeaway

Unexpected tax refunds present a valuable opportunity to improve one's financial standing, whether through paying down high-interest debt, building emergency savings, or adding to general savings - all of which can have a meaningful impact on an individual's or family's long-term financial health.