How Veterans Can Make the Most of Their Tax Refund
Make your tax refund work harder for you in ways that support your long term and short term goals.
Tax refunds hit like a fresh start for many Veterans, service members, and their families. Whether it’s a big or smaller refund, it's a chance to exhale, reset, catch up on overdue bills, or just get ahead. This can feel huge if you're still piecing together civilian routines or staring at pay stubs that may not resemble your former military pay.
Here is how to make your tax refund work harder for you in ways that support your long term and short term goals.
Step 1: Choose a Savings Goal That Fits Your Lifestyle
For Veterans, that might look like building or rebuilding an emergency fund after leaving active duty, paying down high-interest credit cards or transition-related debt, covering upcoming expenses like relocation costs, certification fees, or school supplies, or setting aside money to cushion delays in VA benefits or disability claims.
Hold off on swiping that card. What'd make the biggest difference today?
Having a clear goal helps prevent your refund from disappearing without making a real impact.
A simple way to plan your refund is the 30/40/30 approach.
- 30% can go toward past expenses such as paying down debt, medical bills, or catching up on bills.
- 40% can support present needs like everyday expenses or starting an emergency fund.
- 30% can be set aside for future goals such as education, retirement, or a major purchase.
This does not need to be perfect. It just needs to work for where you are right now.
Step 2: Direct Deposit and Splitting Your Refund
One of the easiest ways to save is to make saving automatic. When filing your taxes, we suggest receiving your refund via direct deposit for quicker, secure access.
You can also obtain IRS Form 8888 to split your refund across multiple accounts. Then you can move a portion to checking for must-pay bills and then send the rest to savings, out of easy reach. You may even choose to set some aside in your retirement account.
If you do not currently have a savings account, this can be a good time to open one. Many credit unions and banks offer accounts designed for Veterans and military families. Use the Veteran Benefits Banking Program (VBBP) to connect Veterans with banks and credit unions offering safe, low-cost banking options.
Step 3: Make Your Refund A Lasting Habit
Your tax refund does not have to be a one-time moment.
Once you have used your refund intentionally, consider keeping the momentum going by setting up automatic transfers, even small ones. This can be especially helpful if your income has changed since leaving the military.
Taking the Veteran Saves Pledge is a simple way to stay focused. You choose a savings goal and receive encouragement and tips that recognize the financial realities Veterans face.