When you get a big check from the IRS, you might be tempted to treat yourself to a shopping spree, but there are smarter ways to put the money to use.

In 2018, over 111 million people got money back from the IRS and the average tax refund was $2,899.1 If you’re fortunate enough to get a refund this year, invest that money in your financial future to get the biggest benefit.

Here are five smart ways to put your tax refund to work:

1. Save for retirement

    If you ‘re enrolled in a retirement account at work, increase your contributions or look into an IRA through a bank or financial company. Time has a powerful multiplier effect when it comes to retirement savings, so starting early and adding gradual increments over time will make a big difference in the long run.

    2. Fill up your emergency fund

    Everyone should have an emergency fund to cover unexpected expenses without going into debt, but 4 out of 10 American adults don’t have the funds to cover an unexpected $400 expense.2 Create a buffer using your tax refund so you can pay for a surprise car repair or medical bill without falling off your financial course.

    3. Pay down your debt

    Since the average American carries about $4,192 in credit card debt, most people are wasting money paying interest rather than earning it.3 Use your refund to make progress paying off your credit card or student loan so you can get closer to being debt-free.

    4. Put it away for college

    If you’re a parent, consider putting the money into a 529 fund to start saving for your child’s education. If you save enough now, you can avoid going into debt to pay for college later.

    5. Consult a financial professional

    Many financial institutions offer complimentary consultation with representatives who know a range of financial products and how they can protect you. A financial representative can help you understand your options so you can spend your refund wisely, knowing how it will impact your financial future.

    Getting a refund on your taxes isn’t the same as finding money — it’s money you overpaid, essentially giving an interest-free loan to the government. Consider asking your payroll department at work to reduce the tax withholding on your paycheck so you can keep more of that money in your wallet. If you’re self-employed, see if you can reduce your quarterly tax payments. And plan to spend this year’s refund on your future financial confidence, instead of something you don’t need.

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