Spring may bring showers, but it also brings billions of dollars in tax refunds ($217.6 billion in 2005 to be exact). But what should we be doing with those refunds? Many of us make bad financial decisions. Here is a list of tips to make the most of our refund check:

- They call it a tax refund for a reason. You didn’t hit the jackpot. You didn’t win the lottery. You didn’t discover hidden treasure. Your tax refund is money you worked hard all year to earn. Too many view their tax refund as ‘found’ money, and as a result, they don’t give it the same value as if they worked for it.

- Tax refund “hot potato.” Do you remember the hot potato game you played as a kid? The objective was to hold on to the potato as little as possible. As soon as you caught it you had to get it out of your hands as quickly as possible. When it comes to your tax refund, you should do the same thing. Let it go! The more time your refund stays in your hands the greater the chance that you will spend it.

- To keep it, you have to give it away. You don’t have to donate it, but you do have to get it out of your control. The easiest and simplest way is to use direct deposit. Maybe the folks at the IRS read about Goal-Oriented Saving/Investing™ in my #1 bestselling book, “The Six-Day Financial Makeover”, because the IRS recently announced a new program to allow taxpayers who use direct deposit to divide their refunds between up to three accounts (using Form 8888). You should be taking advantage of this new IRS program to make our refunds work for us.

Goal-Oriented Saving/Investing™ is a unique technique I developed to help people how to get organized and effortlessly obtain and reach their goals; it calls for a separate savings or investment account for each major goal.

Do you want to:
- Take a trip to Hawaii with the family?
- Buy a vacation cottage?
- Save for retirement?
- Build a nest egg to start a new business?
- Pay for your kids’ college education?

Each of these goals would have a separate savings or investment account into which you would direct deposit part of your paycheck.

So where should you direct deposit your tax refund?

1. Rainy day fund. Bad things happen to good people all the time. Some things you just can’t prevent. But having an emergency reserve fund can get you out of a bind and give you peace of mind. Have part of your tax refund direct deposited into a high interest paying savings or money market account.

2. Pay off debt. Many of us are plagued by credit card debt. There’s no better way to pay off credit card debt than with a big fat tax refund. Have part of your tax refund direct deposited into your checking account (to pay off credit card bills).

3. Save for retirement. If you don’t have credit card debt, plunking down a few thousand into a retirement account is a brilliant way to use your tax refund. Have part of the refund direct deposited into your retirement account.

4. All work and no play… I recommend having up to 10% direct deposited into your checking account and having some fun with it. If you don’t consciously make the decision to spend 10%, you’ll end up spending 100%. Have part of your tax refund direct deposited into your checking account.