With tax season coming to an end, millions of Americans will be receiving a refund from Uncle Sam. According to the IRS, the average refund in 2017 was $3,120. If you are anticipating a refund check this year, it may be tempting to plan a family vacation or to go on a shopping spree – or you can save those hard-earned dollars to help jump-start securing your financial future. We’ve outlined several smart ways you should consider using your tax refund this year.

  1. Reduce your credit card debt. If you are carrying credit card debt, it’s in your best interest to use your tax return to reduce as much of that debt as possible. The minimum monthly payment on your credit card may seem like no big deal – but over time, the money you spend financing your credit card debt can double or even triple the cost of the items purchased. Paying off a balance with a 20% interest rate is like earning 20% on your investments. Using a credit card wisely can help you build your credit rating, but consider paying off the expenses in its entirety each month, if you can.
  2. Build up your emergency fund. Very few Americans have an adequate emergency fund. That is, saved dollars that can be used towards several months of living expenses in the event that significant unforeseen expenses arise. These expenses may be an emergency medical bill, periods of unemployment or an emergency home or vehicle repair.
  3. Invest in your home. If you own a home, consider making an extra mortgage principal payment. Doing so will not only pay off the principal on your mortgage more quickly, but you can bring down the effective cost of that debt and save on interest payments over time. Your tax refund is also a great opportunity to make your home more energy efficient and to work on home improvement projects to increase the equity in your home.
  4. Contribute to (or start) a retirement fund. If you need to kick retirement savings into high gear, look into funding a Roth or traditional IRA, in addition to the 401(k) plan offered through your employer. IRAs are great account options with tax benefits to save extra dollars for retirement.

These are just a handful of ways for you to consider investing your tax refund dollars for your future.  So before you consider splurging on yourself with a shopping spree or booking that trip to Disneyland, consider spending your tax refund on things that will give you the biggest bang for your buck in the long-term.