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Many Americans may have received a large tax refund this year. New Bank of America Research Institute found that refunds could be up to 25% more than last year, creating an opportunity to reset or strengthen your finances.
GOBankingRates spoke to Mary Hines Drosh, consumer spending specialist at Bank of America, to get top tips for making the most of a big tax refund in 2026 — here’s what she recommended.
Plan to convert your refund into savings
Don’t wait until the check arrives to decide your fate. Instead, consider taking a proactive approach by planning to have your refund check deposited directly into your savings account.
With 52% of Americans prioritizing increasing their savings in 2026, your refund is a great way to actively stay on track with your financial goals.
Strengthen Your Emergency Fund for Financial Security
While general savings are important, a dedicated emergency fund is your immediate financial safety net. For the 32% of Americans who find building their emergency fund challenging, a big refund presents an opportunity to build their financial safety net.
Aim to save three months to a year’s worth of living expenses and steadily move toward your goal through small and manageable contributions. Even a portion of your refund can provide peace of mind.
allocate a portion to enjoy or give away
You worked hard for your money, so there’s nothing wrong with allocating a responsible portion of your refund to something that brings you joy. It could be a small favor, a memorable experience, or a donation to a cause you care deeply about.
After meeting your essential financial needs, consider donating or contributing a small amount of money to a cause you are passionate about. This conscious approach allows for fulfillment without derailing your financial progress.
Pay off high-interest debt
This year, Americans are ready for a financial reset. Research from Bank of America shows that nearly 9 in 10 Americans have set financial resolutions for 2026, with 36% focusing on paying off credit cards as a top priority.
Your tax refund provides an excellent opportunity to make a dent in paying off high-interest debt. Focus on paying the amount with the highest interest rates first. This will strengthen your financial foundation as you continue to save for your financial goals.
Invest a portion of your refund in long-term growth
Once your immediate needs are met, think about how your refund can support your long-term goals. Consider putting some of it into an investment account. You don’t need a lump sum of money to start your investing journey – a few hundred dollars is enough to get you started.
Platforms like Bank of America’s Merrill Edge Self-Directed make it easy to get started with just a few hundred dollars. A little planning now can turn your refund into long-term financial security.