This blog post was updated on January 30, 2020.

Ahh tax season — the glorious time when you settle up with Uncle Sam. 62% of Americans expect a refund for the 2017 tax season, and the average refund is $2,782. But how to spend it?

A U.S. Travel Association poll showed that family vacation memories last a lifetime. 62% of the adults surveyed said their earliest memories were of family vacations taken between the ages of 5 and 10 (the same number of Americans expecting a refund for the 2017 tax season!). They also said the vacations were more memorable than school events or birthday celebrations.

Investing your tax refund into a family vacation has the potential to be more memorable and satisfying than anything else you could spend it on. And, if you’re still on the refund-acation fence, here are five ways you can funnel your refund into your dream vacation.

Don’t Plan on the Refund

Elizabeth Harris, a contributor at Forbes, talks about the psychology of the tax refund. She says there are three camps. Those who think of a tax refund as:

  1. A windfall
  2. A rebate
  3. Your hard-earned money rightfully owed

She determines that those who view the refund as a windfall, or sudden, unexpected income, are more likely to spend it, rather than save it or put it towards bills or debt. By using that psychology year-round, you can budget accordingly and live within your means. Then every tax season when you get your check, you are free to use that money towards a memory-making vacation with your family — instead of feeling guilted into using it (or having to use it) on something more practical.

Create a Spending Plan

Decide how much you’re willing to spend before you get your refund. This could be the exact amount of your refund or even less. And if you plan ahead, you may be able to save on discounted flights, rentals, hotels, meals, admission tickets, etc.

If the total for your dream vacation is shocking, consider adjusting your plans by traveling to a closer destination or shortening the length of your stay. Or you can put that money in a special savings account to work towards your dream vacation. Either way, you’re more likely to save on your trip if you plan ahead.

Utilize Travel Credit Cards

Use a credit card that accumulates rewards (points or cash rebates) in the months prior to your vacation. Those with a travel-related sign-up bonus such as air miles or hotel stays are even better.

While travel credit cards can be used for cash back too, you’ll receive a better value when you use them to collect and redeem points for travel. So by earning points all year on things you already buy, you can combine with your cash refund for the ultimate trip.

*Just be sure to pay off your balance in full each month and don’t spend more than you normally would to meet minimum spending. You don’t want vacation debt as a souvenir.

Make Spring Cleaning Your Ally

After you submit your taxes, begin spring cleaning. Clean up your house and earn cash from your castoffs. You may not make much, but a yard sale can generate more income than you think.

Pros suggest that an advertised “Free” pile encourages those who may not stop initially to pull over. Sell adult clothes on eBay or a consignment shop (which tend to generate more money than yard sales).

Ridding yourself of unused items tidies up your house and gives you more space (and cash) in your life for important things – like exploring the world and spending time with loved ones.

Look for a Tax-Refund-Specific Vacation Deal

Multiple cruise lines, tour operators and hotels are seeking business from the 62% of Americans expecting a tax return. And they’re doing it by offering trips that fall below the $3,000 mark so you don’t have to look too hard to make that dream vacation a reality.

Here are a few to consider:

Northern Hilltribes and Villages Tour of Thailand – For just $509, you’ll get an 8 day guided tour of Thailand. You’ll float downstream on a bamboo raft, hike through the tribal hill country of Thailand, and take a food street crawl. Combine this with a best-price flight from CheapOAir, and you may just come in under your tax-refund budget.

Book a Last-Minute Cruise – Cruise ships, airlines, and hotels typically slash prices 14 days prior to booking. This is when procrastinating pays off. Take a three-night cruise to the Bahamas for as low as $299! The best part? Most expenses are covered in the price of the cruise fee.

Northern Lights and Glacier Lagoon Tour – Take a bucket list trip for cheap. This five-day tour takes you from Rekyjavik, Iceland around the country when the Northern Lights are at their best. Transportation, some food, and accommodations are covered — so you’ll just need to book airfare.


Have any tax refund travel tips of your own? Share them with us in te comments below!

About The Author

Hey I'm Mandy. Writer, traveler, wife, mother, author, woman, over-sharer. I like to talk about the grit of travel, the beautiful, and the people that I meet. Oh yeah - and traveling with kids.