The average tax refund is around $3,000. If you find yourself sitting on a pile of cash courtesy of your 1040, resist the urge to treat it like play money. Instead, put the windfall to work for you.

1. Invest in your home

Your refund won’t be enough to redo your kitchen or bathroom, but it can pay for smaller home improvements. Add a backsplash, replace fixtures or paint cabinets to add to the resale value. Installing a programmable thermostat could lower energy bills.

2. Pay down credit cards

Using your tax refund to pay off a card charging 18% interest is like earning 18% on your investments. Tackle credit cards with the highest rates first.

3. Beef up your emergency fund

Set aside enough money to cover three months’ worth of expenses in case of a job loss or an unexpected bill. Six months is even better. Keep the cash in an interest-bearing savings account for easy access.


Copyright 2017 The Kiplinger Washington Editors

This article was written by Kimberly Lankford, Contributing Editor and <i>Kiplinger’s Personal Finance</i> from Kiplinger and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to