If you're getting excited thinking about all the fun things you can do with your tax return once it comes, it's time to hit the brakes.

See, a lot of people have the wrong mindset about their tax returns. They think it's "free money". That sounds exciting, right? It would be if it were true. But your tax return isn't "free money". Uncle Sam isn't just sending you a chunk of money every year.

The money you are getting is YOUR money. It's part of the money you worked so hard to earn last year. It's part of your income that the government took from you. If they take too much, they give some back. It's not just money falling out of the sky.

If you lost your job or took a financial hit, your first priority for  your tax return should be making sure you're able to continue covering your basics: food, housing, utilities, and transportation. Make sure you have the things that you "need." 
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​Now, if you have the basics covered, you can move on to the next part. 

Don't splurge when you get your return. This is not money to use to live outside of your means. And I completely get it. If you've been living tight all year long it's tempting to take that chunk of cash and think you "deserve" to do something fun.

It's money you didn't have in your budget, so what's the harm in enjoying it?

Remind yourself that it's your hard-earned money. You basically gave the government a loan, without interest, and they are finally paying you back. Does that change your thinking a little?

If you had been getting this money throughout the year instead of all at one time, would you use it to go on your dream vacation, buy a stash of lotto tickets to increase your chance of hitting it big, or treat all your friends to a crazy weekend they'll never forget? I doubt it. So, you shouldn't use your tax return like that, either.​

Instead of thinking of your tax return as "free money," think of it as a built-in savings account. You most likely aren't going to drain your actual savings account for ridiculous things, so you shouldn't do that with your return. Here are some things that you should think about doing with your return:

Pay down your student loans - If you have student loans, tax return time is when you can make a real dent in your balance. It might not seem super exciting, but the faster you pay them off, the faster you can work your way towards financial freedom. Keep in mind, though, that not all loans are meant to be paid off. Some repayment plans allow some of your loan balance to be forgiven. Educate yourself about your student loan repayment options or work with a student loan planner to ensure you're on the right repayment plan. 

Build up your emergency fund - If you don't have an emergency fund with six months of income set aside, you can use your tax return to help you start this or build it up further. If you don't have an emergency fund and an unexpected expense comes your way there's a good chance it's going to end up on a credit card. The last thing you want is for your lack of planning with your tax return to lead to future debt.

Pay down credit card debt- Similar to the student loan scenario, if you have credit card debt, work on paying it off. Credit Cards come with pretty high-interest rates, so if you have both student loans and credit card debt, prioritize your credit card debt. If you have a few cards consider throwing your return at the one with the lowest balance, hopefully wiping out one debt completely. Additionally, you should commit to not using credit cards at all until you are debt-free.

Add to your retirement savings - If you aren't already maxing out your retirement investments each year, then consider using your return to save for retirement. Don't fall for the trap that you don't need to worry about your retirement just yet. Look into a Roth or Traditional IRA so you don’t have to do the calculations on how much to increase contributions to match the amount of your tax return.

Invest in yourself - Read a book, start a podcast, take a cooking or language class, or start singing lessons. If you have a side hustle you want to turn into a full-time gig, your tax return could be the investment you need to make the jump. You might also consider hiring a financial coach or financial planner to help you make more smart money decisions. You can learn more about how to choose a financial professional to work with from my FREE guide, Questions to Ask a Financial Planner.

Are these things super fun to do? Not always. Will they bring you that instant gratification that you crave so much? Probably not. But your future self will thank you for making these decisions. Your tax return is not money that just magically appears once a year. It's money you work hard to earn and need to spend/save responsibly.

If you don't have a strategy for your financial future, or even for today, it's time to get one. Worth Winning has options that meet you where you are in your finances. If you don't know where to start in your finances consider spending some of your tax return on educating yourself in the financial world. Check out your options with Worth Winning.