I'm a financial planner with 6 ways to get the most out of your tax refund

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• Your first priority with extra funds from a tax refund should be paying off high-interest debt.
• An IRA, brokerage account, or HSA are all ways you can grow your refund over time.
• You can also boost your emergency fund, which should cover at least three to six months of expenses.

Tax season often brings the excitement of a potential refund, and many people eagerly anticipate how they will use this extra cash.

While it may be tempting to spend it impulsively, your tax refund presents a valuable opportunity to build lasting financial security.

Before deciding how to use it, consider these six strategic ways to turn your tax refund into long-term wealth.

1. Pay off high-interest debt

High-interest debt can be a major obstacle to building wealth. In many cases, the interest rates on this debt exceed the returns you could earn from investing. Plus, since the interest compounds over time, the longer you carry the debt, the more you'll end up paying.

That's why eliminating high-interest debt should be a top priority. Paying it off not only saves you money in the long run but also frees up cash flow that can be redirected toward other wealth-building opportunities.

2. Contribute to a Traditional or Roth IRA

Using your tax refund to fund a traditional IRA or Roth IRA is one of the smartest ways to build long-term wealth. Both accounts offer powerful tax advantages:

• Traditional IRA: Eligible contributions can lower your taxable income now, and your investments grow tax-deferred until withdrawal.
• Roth IRA: While contributions are made with after-tax dollars, your investments grow tax-free, and withdrawals in retirement are also tax-free.

The best IRA account for your needs depends on eligibility requirements and your current and future tax situation. But regardless of which you choose, even a modest contribution can grow substantially over time, thanks to compound interest.

3. Fund a taxable brokerage account

A taxable brokerage account is another powerful tool to grow your wealth beyond retirement accounts. You can use it to invest in stocks, bonds, ETFs, and other assets to build long-term wealth.

Unlike retirement accounts, a brokerage account has no age restrictions or withdrawal penalties, giving you flexibility to access funds whenever needed. However, taxes are handled differently — gains may be subject to capital gains tax, and dividends may also be taxable.

Despite these differences, a taxable brokerage account can be a critical part of your financial plan. Whether you're investing for long-term growth, supplemental income, or future financial goals, no contribution amount is too small to start building wealth.

4. Boost your health savings account

One of my favorite wealth-building tools is the health savings account. This powerful account offers a triple tax advantage:

• Contributions lower your taxable income now.
• Investments grow tax-free.
• Withdrawals are tax-free when used for qualified healthcare expenses.

A unique benefit of an HSA is the ability to reimburse yourself for healthcare costs at any time, allowing your investments to grow over the years.

Plus, once you turn 65, you can use HSA funds for non-healthcare expenses without penalties — similar to a traditional IRA (though regular income taxes apply).

By funding an HSA, you create flexibility for your retirement years, ensuring you have tax-efficient savings for both healthcare and non-healthcare expenses. Keep in mind that to access this account type, you must have an HSA-eligible high-deductible health plan.

5. Jump-start your emergency fund

One of the most crucial yet often overlooked wealth-building tools is an emergency fund. While it may not seem as exciting as investing, it is absolutely essential. Without an emergency fund, an unexpected financial setback could derail all of your wealth-building efforts.

Emergencies are unplanned and can be significant, so having a dedicated fund ensures you're prepared. Consider using a portion of your tax refund to jump-start or boost your emergency fund. Aim to save at least three to six months' worth of expenses in a high-yield savings account to keep your money liquid, easily accessible, and earning some interest.

Don't overlook this step. Building an emergency fund isn't just smart — it's the foundation of any solid wealth-building strategy.

6. Make an extra mortgage payment each year

A simple yet powerful strategy to pay off your mortgage faster is to make one extra payment each year. While it may seem like a small step, the impact is significant. On a 30-year mortgage, this can cut several years off your loan and save you a substantial amount in interest.

Not only does this help you own your home sooner, but it also frees up cash flow that can be redirected toward other wealth-building opportunities.

To make this easier, consider spreading out the extra payment by adding a fraction of it to your regular monthly payment. This way, you gradually work toward the extra payment without a major financial strain.