What To Do With A Tax Refund?

We got our tax refund this week  – $615 was the grand total.   That’s good, because it means we were pretty darn close with our pretty simple online tax estimator last year, and got our estimated payments just about right.   Yeah for us.   Anyway, now we have to decide what to do with it.   We can put it towards our HELOC, we can put it in our IRAs, we can use it to pay down our Discover bill, or we can spend it (yeah, right).   Logically, it probably makes the most sense to put the money in the HELOC or into our IRAs, since the HELOC is at 8.35% right now, and our IRAs are invested in the stock market.   But psychologically, I think I want to put most of it towards the Discover bill.   Besides our mortgage, the Discover card is the only only debt we have anymore; we owe $2400 on it right now.   It’s from a balance transfer that we made in 2005, which was originally business start-up expenses.   We know now that credit cards are not a wise way to fund a new business, but that’s what we did, and thankfully it all worked out.   This month our interest charge was 78 cents on the Discover card – it’s zero percent interest on the balance transfer as long as we continue to make one purchase a month, which we have been doing for the last 18 months.   We only pay interest on the new purchases, which are always under $2.   So it’s virtually an interest free loan.

I know that it makes sense to pay as little as possible on the Discover card and just keep putting our money towards investments and the mortgage, but it would be so great to not have that bill anymore.   To not have to remember to make a purchase every month.   To have only a mortgage and no other debt… At the rate we’ve been going, it will take almost 2 more years to pay off the Discover card, and that bums me out.   I think I want to ramp up the payoff and just be done with it.   So we’ll probably  give most of the tax refund to the nice folks at Discover, and then maybe increase our payment to $200/month.   I think that the feeling of freedom we get when we finally pay that thing off will be worth it.