What is the best financial move to make with a large tax return?

Over the last 2 years, I received over $9,000 in tax refunds. This year, I expect the same. I am torn between paying off a $5,400 loan and saving the rest towards my emergency fund, which is only at 1-2 months of expenses. I am Active Duty and have great job security. The other option I have was to put 90% of my return into an ETF that pays monthly dividends, in hopes of gaining value and providing income to pay off the loan. What do you recommend?

Debt, ETFs, Taxes
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January 2017
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When looking to improve your financial situation, you would be well advised to pay off debt first and add to your emergency fund. The latter should be sufficient to cover at least three months of expenses, and preferably six months even though you have great job security. I don't think the ETF option would be a worthwhile choice. An ETF with a generous yield would almost certainly be a fixed-income holding. In this time of rising interest rates, that would argue against the possibility of gaining significant value. Go with Plan A.

January 2017
January 2017
January 2017