Expecting a substantial income tax refund this year? If so, you’re in the majority; over 80% of Americans get money back at the end of the tax year, with the average refund being close to $3,090. Rather than having those precious dollars being absorbed into your normal spending routine, get the most out of your cash.

get the most out of your cash
1Pay down high interest loans and lines of creditWith average annual interest rates for credit cards and personal loans hovering around 15%, paying off a credit card before making other investment decisions makes good sense.
2Fund your retirement accountIf you haven’t invested in a retirement account, seriously consider making a contribution to one right away.
3Invest itInstead of just working for money, let money work for you. If you invested one lump sum of $1,500 in the stock market, over 30 years, assuming a 12% return, you’d have $ 53,924! (Of course, do your research first before making any investment decisions and talk to licensed investment professionals)
4Open an emergency accountMost Americans don’t have money set aside for those financial emergencies that always seem to happen when there’s no cash in the coffer. A large tax refund is a great start for an emergency account. Experts recommend it should eventually total between three to six months’ worth of essential living expenses.
5Pay for repairsMaintaining expensive possessions now will result in dollars saved tomorrow. Use the money to repair a leaky roof before it develops into a bigger problem; replace those dangerous bald tires with new, safe ones.
6Start a personal endowmentInvesting in your emotional, physical, intellectual, and career growth is a wise use of money. Whether it’s paying for a gym membership or a cooking class, you’ll feel effects of this type of investment fast.
7Make an extra home mortgage payment (or two)Though you won’t feel the benefit immediately, doubling up on a mortgage payment now can save you months of mortgage payments later.
8Donate to a charityGiving back to the community is a wonderful way of supporting a cause you’re passionate about. Even better – in many cases at least a portion of your donation is tax-deductible, too.
9Open a college savings plan for your childA four-year, out-of-state college education can cost over $100,000. Save for your child’s college education with a college saving plan. For the most part, withdrawals are completely tax-free when used for higher education purposes. Talk to a licensed investment professional about your different options.
10Plan a vacationIf you’re in a fluid financial position, and can truly afford a bit of luxury, do something you’ve been dreaming of. Money is to be enjoyed as well as earned, saved and invested.

Although all the preceding ideas are excellent uses for a lump-sum amount of cash, remember instead of planning for a refund, it could be more beneficial to come out even. A tax refund is an interest-free loan to the government and money that isn’t in your pocket every month. If you’ve been getting a refund back each year, consider changing your withholding exemptions so less tax is withheld from each paycheck. While a tax refund may feel like a gift from Uncle Sam, it’s not – it’s money you’ve overpaid on your income taxes. That said, some people use this as a form of saving.

Source: Balance

Consult a tax professional for the most current data and/or personal advice.