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10 Ways to Wisely Spend Your Tax Refund

By , dealnews Senior Feature Writer

Tax season is upon us, and for many of us that means a nice return from Uncle Sam is heading our way. According to the latest filing statistics released by the IRS, the average tax refund this year is $2,913. Furthermore, recent polls suggest consumer spending is up again amidst news of a recovering U.S. economy.

Here at dealnews we're big on saving money and being fiscally responsible (as evidenced by how many of you are planning on saving your refund). However, if your savings are in order and you have little-to-no credit card debt, there's never been a better time to pamper yourself. Naturally, we like to stretch our dollar as far as possible, so we looked into a variety of goods that can deliver the best bang for your buck. From Caribbean cruises to hour-long massages, here are 10 smart ways to spend your tax refund.

1. Treat Yourself to a Cruise

The cruise industry is hurting. A string of mishaps at the start of the year created a PR nightmare from which the industry has yet to fully recover. To win back customers, the cruise industry has desperately slashed prices by up to 11%. Deals have gotten even more aggressive in the past few weeks as we've seen sitewide sales on cruises from Expedia, Travel-Ticker, and Royal Caribbean. So go ahead and book that cruise and rest assured that you'll be getting the lowest rates of the year.

dealnews Pick: While cruises come in all shapes and sizes, this past March, 3-Night Caribbean cruises for two averaged $398.

2. Invest in Your Health with a Gym Membership

Working out is a chore. We know. But one of the best investments you can make is on your health, and while you may think gym membership sales are over now that the new year is in full swing, the truth is that the best sales are yet to come. During the spring months when people are more prone to exercising outside, gyms offer promotions in an attempt to entice new members indoors. So wait a few more weeks for a sunny streak in your local forecast and then head to your gym to haggle a cut-rate deal.

dealnews Pick: To date, we've seen memberships at gyms such as 24 Hour Fitness for just $30 a month ($360 total for the year).

3. Hit the Roads to Stay in Shape

Don't like being chained down to a monthly gym membership? Then it's time to dust off that bike and blaze your own trail. We'd first recommend stocking up on the proper cycling gear from helmets to cycling shorts. Or, if you're new to the cycling scene, you can pick up a new bike for about $150.

dealnews Pick: First-time cyclers shouldn't invest too heavily in their new hobby, but we recently found a collection of cycling gear for about $119.

4. Give Your Wardrobe a Makeover

Nothing spruces up a wardrobe like a new suit. And if you don't already have a reliable style to fall back on for events, interviews, and the like, consider this the perfect time to invest in one. While it's hard to pinpoint the "best" time to buy a new suit, just this month we've seen two stellar sitewide sales on men's suits from Jos. A. Bank and an Editors' Choice deal from Macy's.

dealnews Pick: We've seen styles for as low as $64 to $100 a pop lately, as well as buy one, get one free promotions from Jos. A. Bank and Men's Wearhouse.

5. Upgrade to a Fully-Loaded Laptop

Black Friday typically brings about the best prices of the year for various electronics. Last November, for example, fully loaded desktop replacements (those with 8GB of RAM and quad-core Core i7 CPUs) hit new price-lows, coming in at $800 (which was also the lowest price in all of 2011). In both February and March we saw those Black Friday prices linger, and on occasion, even saw a desktop replacement that cost less than what we saw in November. Needless to say, if you're in the market for a new laptop, don't hold back.

dealnews Pick: Deals on desktop replacements are at an all-time low. Just make sure to purchase at or below $800 for maximum savings.

6. Take a Domestic Vacation

In general, we've noticed that prices on international vacation packages have risen in price lately (excluding cruises, obviously), so it may not be the best time to get a deal on, say, an all-included trip to Europe if you're hoping to stretch your dollar the furthest. So rather than spend your vacation outside of the country, we recommend exploring new cities and sights domestically. From Vegas, to Los Angeles, to New York, we frequently see nationwide airfare deals from the likes of JetBlue, Virgin America, and American Airlines, with 1-way fares starting as low as $35. Combine that with any number of hotel deals, and you can enjoy a week-long getaway and have money to spare for souvenirs.

dealnews Pick: We typically list JetBlue 1-way fares from $35 (roundtrip fares go for $70). Sometimes, the fares will also apply for flights to Puerto Rico and the Caribbean.

7. Give Your Body a Break

If you can't afford to go away on vacation, then at the very least you should treat your body to one. Daily deal sites like Groupon, LivingSocial, and Lifebooker regularly list deals on facials, massages, and other therapy packages with discounts as high as 50% off the original price.

dealnews Pick: While every deal is different from its predecessor, you can expect to pay roughly $50 for a 1-hour massage, although deals at luxury boutique spas can cost a little more.

8. Buy That 3D HDTV

In the past, we weren't big advocates for 3D TV, but it's been roughly three years since they've made their big debut, and we're finally seeing some serious discounts — particularly from third tier vendors that are slowly creeping into the 3D market. This summer, Westinghouse is expected to debut its first 3D TV bringing prices even lower than what they are now.

dealnews Pick: If you're going to buy a 3D HDTV, we recommend going for the big 55" set to maximize your dollar. Brand-name models (from Sony and Samsung) have been as low as $1,175 this year, so look for deals at or below $1,100. Our sole third-tier vendor deal came in at $699, so be sure to keep an eye on third-tier manufacturers if you don't require a brand-name TV.

9. Consolidate Your Life with a Tablet

While many people still require the horsepower of a traditional laptop, a growing percentage find that they can do all of their work via a tablet. You probably won't see major discounts on the new iPad for at least six months, but in the meantime the iPad 2 and virtually every Android tablet in the market are seeing significant cuts, making it an ideal time to join the tablet movement.

dealnews Pick: If you don't mind a refurbished unit, Amazon offers its refurbished Kindle Fire for $169. The store also briefly slashed it to $139 last week, so keep an eye out for another one-day only sale. Otherwise, you can get an Apple iPad 2 16GB WiFi for about $360.

10. Stock Up on Outdoor Gear
This year's unseasonably mild winter has given rise to stellar deals on outdoor winter gear, so although winter is over, now's a great time to stock up on ski and snowboarding gear for next year's snow-related activities. As far as spring and summer activities are concerned, you'll start to see deals on summer items like tents, backpacks, and water bottles from top-shelf vendors like REI and Altrec in May and June.

dealnews Pick: In March we saw hiking backpacks from the likes of North Face with prices starting at just $34.

Final Tally
If you purchased all of the above-mentioned items, your final cost would come to roughly $2,799, which still leaves you with $114 unspent dollars. (And that's good news as it means you could continue your shopping spree with some of our hand-picked Editors' Choice deals.) Be sure to set up a customized email alert to be notified immediately when we see these or similar deals again.

Front page photo credit: Daniel Stoica
Photo credits top to bottom: Lights! Camera! Critic!,
Made in China, Pix Mac, and Mountain Man Outdoor Supply Company

An avid gadget lover, Louis Ramirez has covered technology for Gizmodo, CNET, Laptop, and various other publications. Follow him on Twitter at @LouisRamirez or follow @dealnewsfeature for the latest roundups, price trend info, and stories. You can also sign up for an email alert for all dealnews features.

Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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ROTH IRA is good if you fit the criteria. They are post tax, you can only take it out without penalty for a few reasons (buying first home, children going to college, and a few others).... If you meet the criteria, it's great. If not, go with regular IRA, if it's for your retirement since you get pre tax savings.
I can't believe that, in the throes of tax season, you're not mentioning a Roth IRA investment.  You can purchase your favorite stock, bond, mutual fund, index fund, property, etc.... and do it in a tax-savy way with the Roth IRA... Deadline for 2011 contribution is tax day!  My favorite investments are Vanguard index funds...
Pay off some credit card bills from the Holidays and such.  Also student loans if you have any.  Get rid of debt.
Excellent suggestion. 
Let's suppose that your tax refund is $10,000. If you decrease your withholding by $10,000 for the year, you will have $10,000 to invest. If you had purchased 26 shares of AAPL six months ago at $375, you would have $16,000 now, a profit of $6,000. That's enough to get all of the above, pay capital gains on the $6,000, and have $2,300 left over.
How about suggesting to throw into your home.... We are getting siding done to our home which it desperately needed.
I'm with you on 1. A vacation is nice, but only if you can afford it. There are also a lot of other travel deals here, so knock yourself out.