a. Of course.

b. What’s a budget?

c. I know what my bills are each month, and I make sure my income at least meets that amount. I’m not quite sure where the rest of my money goes….

7. Do you eat many meals out?

a. We budget some money so we can enjoy a few meals out a month.

b. Depends on my schedule and what is the most convenient.

c. I try to eat at home because I know it’s cheaper, but I don’t hesitate when my friends as me to join them at a restaurant for dinner.

8. Do you have an emergency fund in place to cover medical expenses, last-minute flights, etc.?

a. Yes, and I do not use it for anything else.

b. No

c. Yes, but sometimes I dip into that account for non-emergency things.

If you answered mostly A’s: Sounds like you are a stickler for savings, which means you are a candidate for properly saving and investing your tax refund. But be sure to have a little fun—saving all the time can be stressful too! Consider using a budget tool like Mvelopes to maintain a balance between saving and spending.

If you answered mostly B’s: Stop! If you just got your tax refund, don’t go spend it until you’ve read this advice: this is the perfect time for you to start a savings account, or invest in a ROTH IRA. If you have yet to begin saving for retirement and do not have an “emergency fund” to cover unexpected medical expenses, it is important to get started right away.

If you answered mostly C’s: Sounds like you might not have a consistent way of saving—or spending. Consider becoming more structured when it comes to your paychecks and once you receive your tax refund. As yourself: are there areas where I should be investing, or a specific large-ticket item or vacation that I want to save up for? Use your tax refund to make it happen!

Steve Smith is the Chief Executive Officer of Mvelopes and Money4Life Coaching, as well as the author of Money for Life: Successful Money Management and Financial Fitness in Just 12 Weeks! and the Money for Life Success Planner: A 12-Week Companion to Achieve Financial Fitness. He has strong strategic and tactical business skills and combines them with a passion to develop products and services that make a positive difference in people’s lives.

Publication date: April 22, 2013