$7,500… what to do?

I’ve been reading this great blog, Mrs. Micah’s Finance for a Freelance Life, for awhile now. The blog features all sorts of information on debt repayment, credit cards, home mortgages, etc. It’s very helpful for me in particular because Mrs. Micah is dealing with car payments, credit cards, school loans, and such. All right up my alley. 🙂

So, I posed a question to Mrs. Micah:
As a first-time homebuyer in 2008, I received a $7,500 tax refund this year. The deal is that the government will take $500 out of my tax refund every year for the next 15 years until it’s paid off. Additionally, if I move before 15 years, I have to pay off whatever is left immediately. (Not too worried about this, for various reasons.)

Anyway, I took the money. So, should I pay off debt with the money? Or should I just put the money in savings for emergencies? Or should I put it aside in case I move in 5 years? I’m just not sure what is the most financially-responsible thing to do. Perhaps you could address this in a post, as I know there are probably many other people in a similar situation.

Mrs. Micah broke down my question into a few easy parts and laid all the information out. And now I know what to do. So if you’re looking for a great blog on money written in regular words and spoken by someone who knows what it’s like, visit www.mrsmicah.com.