Your tax refund is bigger this year, and some of the sharpest financial minds in the country are already betting on what you will do with it. Economists predict most households will treat the extra cash like a bonus shopping spree.
Suze Orman, one of the most recognized voices in personal finance, is pushing back hard on that assumption.
The average federal tax refund has climbed to $3,571 so far in the 2026 filing season, up 10.9% from the same point last year, according to IRS data through March 20. New deductions introduced by the One Big Beautiful Bill Act for tips, overtime, and auto loan interest are driving those refund sizes even higher than usual.
Orman is not celebrating the bigger checks. She sees a fork in the road for millions of families, and the direction you choose could reshape your financial standing for years to come. Her warning is direct, her recommendations are specific, and the stakes are higher than most people realize.
Orman says your refund is a financial security test, not a spending spree
“I want you to use any tax refund as an opportunity to build financial security, not just buy things,” Orman wrote on her website. She called that advice “extra important right now,” given the slowing job growth and the growing use of artificial intelligence to replace human roles across industries.
New tax deductions passed under the One Big Beautiful Bill Act created fresh write-offs for tip income, overtime pay, senior citizens, and even auto loan interest. Those provisions are resulting in larger checks for millions of filers this spring, according to the Tax Foundation.
“When people have a mindset of how they’re going to use the refund, whether that’s earmarking it for savings or some kind of debt reduction, they’re far less likely to impulse-spend once the money hits their account,” said Michelle Wolff, Certified Financial Planner and Wealth Adviser at HB Wealth.
Orman’s concern is that people will treat the unexpected bump as free money, spending it on wants rather than strengthening their financial foundation. Her blog post laid out six specific strategies she wants you to consider before you spend a single dollar of that refund.
Emergency savings and credit card debt should come first, Orman says
Orman’s first recommendation is to build your emergency fund before doing anything else with your refund check. “Every dollar here gives you peace of mind and protection,” she wrote. The advice carries extra weight during a period when layoffs linked to AI automation are accelerating in customer service, data entry, and content creation.
Financial planners generally recommend keeping three to six months of essential expenses in a savings account you can access quickly. If your monthly obligations run $3,000, your target emergency fund sits between $9,000 and $18,000.
High-yield savings accounts are offering yields between 4% and 5% right now, so a $3,500 refund deposit starts generating $140 to $175 in annual interest.
Her second priority targets high-interest credit card debt, but she adds an important step most people skip. “First, see if you qualify for a zero-rate balance transfer credit card offer, then attack that balance,” Orman wrote.
The average credit card interest rate sits near 21% in early 2026, according to Federal Reserve data. Moving a $3,500 balance from a 21% card to a 0% promotional card saves you roughly $735 in interest over a year.
Suze Orman advised putting emergency savings first, then tackling credit card debt, a simple shift that can quietly change your financial future.
Jenny Anderson/Getty Images
Car and home maintenance can save you thousands
Orman’s third and fourth recommendations focus on maintenance spending that prevents far more expensive problems later. She makes a sharp observation about vehicles that many refund recipients overlook entirely.
“Avoiding costly repairs and extending the life of your current car means not having to deal with today’s insanely expensive new and used-car market,” she wrote on her blog.
Spending $500 to $1,000 on routine maintenance, such as brakes, tires, and fluid changes, keeps your current vehicle running for years longer. New vehicle prices averaged over $50,000 in late 2025.
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Even used cars that would have cost $20,000 just a few years ago now regularly exceed $28,000 to $30,000, making preventive repairs one of the smartest financial moves available. Home maintenance follows the same logic, and Orman points out a benefit many homeowners overlook.
“It not only can mean avoiding bigger repair costs down the line, but it also keeps the value of your home stronger,” she wrote. A $300 gutter cleaning or a $500 roof patch today prevents water damage that could easily run $10,000 to $15,000 if left unchecked for a single season.
You should approach these maintenance decisions with a simple filter that protects your two most valuable assets. Ask yourself whether the repair cost today is less than 10% of what a full replacement would cost later. If a new roof costs $15,000, spending $1,500 on targeted repairs is a clear win that extends its useful life by years.
Roth IRA contributions turn your refund into decades of tax-free growth
Orman’s fifth recommendation is to funnel part or all of your refund into a Roth IRA. The 2026 contribution limit has risen to $7,500, or $8,600 if you are 50 or older, according to the IRS. That’s a $500 increase from 2025, and the catch-up contribution for those 50 and older also rose by $100.
The Roth’s advantage is straightforward, and you should understand why it matters for long-term retirement planning. You contribute after-tax dollars now, and your withdrawals in retirement come out entirely tax-free.
If you deposit $3,500 from your refund and leave it invested for 25 years at an average annual return of 7%, that single deposit grows to approximately $19,000.
Roth IRA income limits to check before contributing
- Single filers can make full contributions with modified adjusted gross income below $153,000, with eligibility phased out entirely above $168,000.
- Married couples filing jointly can contribute fully below $242,000, with the phase-out ending at $252,000, according to the IRS.
- You have until April 15, 2027, to make Roth IRA contributions that count toward the 2026 tax year.
Investing in work skills is Orman’s hedge against AI-driven job disruption
Orman’s sixth recommendation is the one that may feel most urgent for younger workers and mid-career professionals right now. “If you are worried about job security, especially in a field where artificial intelligence is already being used, consider how to make your resume as up-to-date as possible,” she wrote in the same blog post.
She specifically suggested online courses or community college classes if your employer does not cover the cost of continuing education. Spending $500 to $1,500 from a tax refund on professional certifications, technical training, or credential upgrades could make the difference between staying competitive and falling behind in a rapidly shifting job market.
Fields facing the most immediate pressure from AI today include customer service, basic accounting, data entry, and content creation. Workers in these areas should prioritize skills that complement automation rather than compete with it, such as project management certifications, data analysis training, and advanced technical credentials.
The “need versus want” question, to ask before spending
Orman wrapped her advice with a challenge that cuts deeper than any single financial strategy she recommended in the post. “Is this a need, or a want?” she asked readers to consider before spending any portion of their refund check. The question sounds simple, but applying it honestly requires a level of self-awareness most people avoid.
“If there is any part of your financial life that gnaws at you right now, the kindest and smartest move you can make today is to limit your spending on wants,” Orman wrote.
She emphasized that financial peace of mind is the greatest need, and that directing windfall money toward security rather than consumption separates families who build wealth from those who stay stuck.
How to decide where your refund goes based on your financial position
Orman’s six recommendations are not a rigid checklist where you must complete step one before moving to step two. Your specific financial situation determines your priority. If you carry $5,000 in credit card debt at 21% interest and have no emergency fund, your first move is to split the refund between a starter emergency fund and a paydown on your card.
Priority order based on your current financial position
- No emergency fund and carrying high-interest debt: Split the refund between a $1,000 starter emergency fund and your highest-rate credit card paydown.
- Small emergency fund but no high-interest debt: Direct the full refund into savings until you reach at least three months of essential expenses.
- Solid emergency fund and manageable debt: Prioritize Roth IRA contributions and professional development spending that protects your earning power.
- All basics covered: Direct your refund toward home or vehicle maintenance to protect your largest assets from costly future repairs.
The filing deadline for 2025 tax returns is April 15, 2026, and the IRS has already issued more than 56 million refunds this season. If you have not filed yet, the clock is ticking on your opportunity to put this money to work for your future.
Orman’s message is clear: “I hope you prove them wrong,” she wrote in response to economists’ predictions that households will waste larger refunds.