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Here's a solution that benefits both of you.
By
Sean Jackson
published
11 April 2026
in Features
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Question: My wife and I were delighted to find we're getting a higher tax refund of around $10,000 this year. I think we're in a good place to use the money for a fun vacation or other splurge. But, she's worried about the future and wants to save it. What should we do?
Answer: When making significant money decisions as a couple, it's common for people to want different things. Money disagreements are actually signs of a healthy relationship because you're communicating.
So, even if those conversations are stressful, it's a very good sign. Now, turning attention to whether you should splurge or save, there's an easy way to figure this out. All you need to do is answer a few simple questions.
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Sign up1. If you lost your job tomorrow, how long could you pay your bills?
You should have an emergency fund established to cover expenses in case of a job loss. How much do you need to save? It depends on your circumstances.
If your household relies on one spouse to cover all the earnings and expenses, you'll likely need at least six months saved. Meanwhile, if both people earn around the same amount of money, then three months is a good benchmark.
Where's the best place to build your emergency fund? A high-yield savings account is a great place to start because you can transfer money from your checking account to that savings account on payday and treat that money as "don't touch." Plus, with rates as high as 4.20% APY, you'll outpace inflation.
Use this Bankrate tool to find the best high-yield savings accounts for you:
2. Are your retirement savings on track to ensure your financial security for the future?
Investing that tax refund could be a huge boon for your future self, who will thank you, especially if you're behind on where your retirement savings should be. To demonstrate, if you took that $10,000 and placed it all in a Vanguard S&P 500 index fund, in 20 years, that return could balloon to almost $40,000, using historic returns.
Obviously, this approach comes with some risk. There's no guarantee that historic returns are indicative of future performance for index funds, and if inflation continues to rise, it can impact how much your money will be worth when you need it.
Still, hypothetically earning close to $30,000 can be a smart move that helps you catch up with your retirement savings.
3. Are you carrying high-interest debt?
The average credit card APR is 19.58%, according to Bankrate. If you have a $5,000 credit card balance and make the minimum payment with the average APR, it could take you 273 months to pay it off. That's a long time throwing your money away on interest.
Therefore, if you have any high-interest debt, I recommend paying that debt off first. It'll take payment(s) off your monthly budget (which you can use to pad savings or retirement), improve your credit and help you get on the road to becoming debt-free.
There are several ways of going about this. You can do the debt snowball method, where you pay off your lowest balance first, while making minimum payments on other debts. Of course, if the $10k clears all your high-interest debt, consider using it for that, provided your savings are in decent shape.
4. What if none of these apply to me?
Then you're in the sweet spot. In this scenario, you should devote $7,000 to $8,000 to save and use the rest to splurge. It allows you both to enjoy the windfall of your tax refund.
Plus, it's a smart way to shelter from rising inflation. With diesel prices soaring, the costs of everyday goods will rise. Earmarking a significant portion of those funds to a high-yield savings account is a smart way to offset higher prices.
And you'll get to benefit from it now and later. You'll get to splurge on a home upgrade or other treat, while she gains peace of mind knowing that your future selves will thank you for saving.
Related content
- IRS Tax Refund Schedule 2026: When Will Your Refund Arrive?
- 6 Steps to Quickly Build Your Emergency Fund
- Best High-Yield Savings Accounts — April 2026
- How to Invest in ETFs for Beginners
Sean JacksonPersonal finance eCommerce writer Sean is a veteran personal finance writer, with over 10 years of experience. He's written finance guides on insurance, savings, travel and more for CNET, Bankrate and GOBankingRates.
