You wait all year for your tax refund to arrive. When it’s finally in your hands, how will you spend the cash? Yes, you could throw the entire amount at your bills and feel the satisfaction of taking care of business. On the other hand, there’s nothing wrong with spending that money in a more entertaining fashion. Rather than starting a no-win argument with yourself, perhaps you can split your refund in a way that satisfies your responsible side and your fun-loving side at the same time.

Practical spending suggestions

Spending part of your refund to pay the bills is fine, but you can maximize the impact if you focus on expenditures that will reap dividends over time. Consider buying time-saving equipment when prices and popularity are low. Snow blowers, for example, are often on sale at the end of the winter season. Buying early allows you to prepare for next year’s storms at bargain prices. Imagine already being prepared for snowfall when your neighbors are in line at the store, hoping the machines, shovels and deicer don’t sell out before they can get to the counter.

Purchasing a heat pump or attic insulation may lower your utility bills and you’re likely to recover the cost after a few years. Similarly, using part of the refund to reduce the principal on your mortgage or car loan will decrease the amount of interest you have to pay over the life of the loan. Investing a portion of your tax refund in a CD, IRA or annuity puts the money to work for you by earning interest. As a bonus, saving for the future gives you peace of mind.

Fun ideas for your tax refund

After you’ve used part of your refund to satisfy your responsible adult side, it’s time to let your inner child come out and play. If the winter months have you longing to soak up the sun in a warmer climate, now may be the perfect time to indulge your tropical fantasies. If you’d prefer to spend your time and money getting in shape for swimsuit season, book a few days at a spa retreat.

Of course, you don’t have to travel to have a good time. If you’ve been wishing for a plasma TV for the family room or a high-definition camcorder, go ahead and make your dreams come true. Or, if you’re looking for another option that would please the entire family, load them all in the car and drive to your favorite mall. When you hand out cash for each family member to spend, you’ll be everyone’s hero.

Even though it’s your own hard-earned money and you’ve known it was coming, getting your tax refund seems like a bit of a bonus. How you spend the windfall isn’t as important as the way you feel after it’s spent. Splitting the refund so that it accomplishes something practical as well as something enjoyable can give you a tremendous sense of satisfaction. You might like it so much that you’ll be inspired to split your tax refund every year.