What Are You Doing With Your Tax Refund?

04/05/2013 01:33 pm ET | Updated Jun 05, 2013

It's the time of year that many people around the country look forward to: tax refund time! There are so many different theories on what to do with that money. Some people say you should save it or pay off debt, while others will tell you to go out and have fun.

Whatever you choose to do with your tax refund, the focus should always be on getting a significant return on your investment. In other words, make sure you're getting something worthwhile out of that money. The answer might be different for everyone, and you might decide to allocate certain amounts to different items. What really matters is that you're walking away with something that will help you grow, improve and better yourself in some way.

A couple of recommendations:

Personal and business development
Formal education will make you a living; self-education will make you a fortune. There's a reason that very successful people are constantly attending business and personal development seminars. If you want to see a massive return on your tax refund, invest it in ways to better yourself such as self-improvement audio programs, business workshops and seminars or coaching and mentoring programs. School is never out for the great ones. Ironically, the people who need it the most are never open to the idea, and the people who need it the least can't seem to get enough. People become successful by being around other successful people, and hearing what's worked for them. This is a great investment of your tax refund dollars.

Start a business
There are 3 million millionaires in the U.S. and they are the largest buyer of personal services. It's a perfect time to use that refund to start a lawn care service, maid service, handyman business, pool cleaning company, grocery shopping service, etc. Huge opportunities also exist for selling and brokering used goods like clothes, toys, computers and sporting goods. These items can be purchased at garage sales and resold on and offline. Starting your own business is a lot of work, and don't expect it to be a walk in the part. However, working for yourself offers increased flexibility to make your own schedule and is the fastest road to acquiring wealth. With a world full of problems right now, use your natural talents and abilities to solve a problem that people are willing to pay for. Starting a business is another very wise investment of your tax refund dollars.

Get fit and healthy
Taking control of your weight and overall health is the fastest way to ascend to world-class success in all areas of your life. Use that tax refund to invest in exercise equipment or a gym membership. Not only will you feel better, but that confidence will carry over into everything you do. Your level of success in your career, relationships and everything else will drastically improve. Also, if you've been putting off going to the doctor or dentist because you were worried how much it would cost you, now is the time to make that appointment.

Take that vacation
The most successful people know the enemy of creativity and clarity is excessive cognition. Cognitive overload will bring anyone down both personally and professionally, and it's why world-class performers take this time off to slow their thought process down, and elevate their consciousness to gain a fresh perspective. If you've been planning a vacation but always seem to have a reason why you can't go, stop putting it off and just do it. Not only will you have a great time, but getting away from your usual routine will reinvigorate you for the battle when you return.

Revisit why you are getting a large refund in the first place
Some people look forward to a big tax refund each year and see it as something they deserve for all their hard work throughout the year. The reality is you should want to get as close to getting nothing back in the way of a tax refund. The reason: you're giving the government your money interest free. Adjust your W4 and give yourself a raise. You'll see a thicker paycheck each week.

Visit a certified financial planner
Some people prefer to pay off high-interest credit cards or other debts. This certainly isn't bad advice but the problem is it's only a temporary fix and puts a band aid on a bigger problem. Rather than paying off the debt, work with a professional who can help you prepare a budget, dissect your spending habits and develop a long-term plan to get you out of debt once and for all and put you on the path to financial freedom.