What to Do With a Tax Refund

March 31, 2025

A Guide to Wealth, for the Blue Collar Man

Blue-collar workers keep the world running, but too many never build real wealth. I started Hammer & Hustle to change that. You don’t need a degree or a Wall Street background. You just a plan and the drive to execute. This newsletter gives you real strategies to grow your money, start a business, and take control of your future.

Let’s build something bigger than a paycheck.

What to Do With a Tax Refund: The Wealth-Building Plan

Every spring, millions of Americans get a check from Uncle Sam—and blow it. But if you want to turn work boots into wealth, don’t treat your tax refund like found money. Treat it like fuel.

Here’s how to turn a $1,000–$5,000 refund into real momentum:

1. Start with Security

Build your financial floor first.

Ask yourself two questions:

  • Do I have at least $1,000 in a savings account for emergencies?

  • Do I owe any credit card debt over 10% interest?

If the answer to either is no, that’s your first move. Here’s why:

  • A surprise car repair or layoff can knock you flat if you’re not ready.

  • Credit card debt is like a hole in your bucket—paying 20% interest while your savings earn 0.5% makes no sense.

How to do it:

  • Use your refund to pay off high-interest debt first. Even knocking down a $2,000 balance to $500 can save hundreds over the year.

  • Park $1,000+ in a separate savings account, ideally one you don’t touch unless it’s a real emergency.

2. Invest in Ownership

You don’t get rich from income—you get rich from assets.

Use your refund to buy something that pays you back:

a) Buy an ETF (Exchange-Traded Fund)

ETFs are baskets of stocks. They give you instant ownership of big companies without having to pick individual stocks.

How to do it on Robinhood (Step-by-Step):

  1. Download the Robinhood app and set up your account (you’ll need your SSN, address, and bank login).

  2. Once approved, tap the account icon, then “Transfers” to move money from your bank.

  3. Once the cash hits, tap the search bar (🔍) and type in an ETF like:

    • SPY (tracks the S&P 500)

    • VOO (similar, but slightly lower fees)

  4. Tap on the ETF, hit “Buy”, and choose “Buy in Dollars.”

  5. Enter your amount (e.g. $500), tap “Review,” then “Submit.”

  6. That’s it—you now own a slice of 500 top American companies.

b) Upgrade Your Skills

$500–$2,000 can change your earning power if you put it into the right training:

  • $1,200 CDL course = $60k+ trucking job

  • $900 welding certification = access to $30/hr+ work

  • $600 online HVAC repair course = $100/hr side gigs

Pro tip: Focus on skills that make you money within 3–6 months.

c) Seed a Side Hustle

Even $300–$1,000 can kickstart:

  • A pressure washing business (used equipment + flyers)

  • An eBay flipping hustle (inventory + shipping supplies)

  • A lawn care gig (used mower + door-to-door pitching)

Look for ideas where you control your schedule and can scale if it works.

3. Cut the IRS Tip Next Year

A big refund means you overpaid the government.

If you got $3,000 back, that means you gave the IRS an extra $250/month all year long—for free.

How to fix it:

  1. Use your last pay stub + tax return to calculate how much tax was withheld.

  2. Go to your job’s HR portal and submit a new W-4 form.

  3. Use the IRS Withholding Estimator to set the right number of allowances.

  4. The goal? Break even next year—and put that extra $200–$300/month to work now, instead of waiting for a refund in April.

4. Teach Your Money to Work Overtime

Every dollar is an employee. Don’t let it sit on the couch.

Make your refund hustle while you sleep:

a) Buy Cash-Flow Assets

  • Dividend Stocks: Buy companies like Pepsi or Coca-Cola that pay you every quarter. Even $1,000 can generate $30–$50/year in dividends.

  • Rental Tools: Buy a carpet cleaner or power washer and list it on Facebook Marketplace or Craigslist for local rentals.

  • Vending Machines: One $1,000 machine at a busy shop can bring in $100/month profit with the right location.

b) Reduce Future Bills

Use your refund to cut your costs long-term:

  • Pay 6–12 months of car insurance up front (you’ll often get a discount).

  • Buy annual subscriptions instead of month-to-month plans.

  • Stockpile essentials like oil, filters, laundry supplies in bulk to avoid markups.

Bottom Line:

Your tax refund isn’t a bonus—it’s a second shot at getting ahead.
If you use it right, you can buy skills, tools, and ownership that make life easier next year and richer five years from now.

The choice is simple: Will you consume it—or will you convert it into freedom?

—
Hammer & Hustle Team
From Work Boots to Wealth