8 Smart Ways to Spend Your Tax Refund

April 15 is Tax Day. Do you have a plan?

Mo’ Money - Tax Day, or the last day to file your federal tax return, is April 15. In addition, we're currently in the season for tax refunds, and the IRS reports that the average tax refund has gone up slightly to $3,034. But while that Apple Watch and spontaneous vacation may be calling your name, there are more practical ways to use that money. Choose wisely, and you could ease your financial burdens for the rest of the year! Here’s how. By Kenrya Rankin Naasel

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Mo’ Money - Tax Day, or the last day to file your federal tax return, is April 15. In addition, we're currently in the season for tax refunds, and the IRS reports that the average tax refund has gone up slightly to $3,034. But while that Apple Watch and spontaneous vacation may be calling your name, there are more practical ways to use that money. Choose wisely, and you could ease your financial burdens for the rest of the year! Here’s how. By Kenrya Rankin Naasel

Add to Your Emergency Fund - And if you don’t have one, start one, using a no-fee, interest-earning online account. You need to have enough to cover at least three months’ expenses, from rent to food to gas money. It pays to do this before anything else — if you have a major setback, like losing your job or suffer a debilitating injury, this cushion can take the sting out of the fall.  (Photo: Fairfax Media/Fairfax Media via Getty Images)

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Add to Your Emergency Fund - And if you don’t have one, start one, using a no-fee, interest-earning online account. You need to have enough to cover at least three months’ expenses, from rent to food to gas money. It pays to do this before anything else — if you have a major setback, like losing your job or suffer a debilitating injury, this cushion can take the sting out of the fall.  (Photo: Fairfax Media/Fairfax Media via Getty Images)

Pay Down Debt - Have you been paying the minimum on your credit card each month? You could save hundreds or even thousands of dollars in interest if you use some of your refund to make a significant dent in your debt.  (Photo Illustration: Spencer Platt/Getty Images)

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Pay Down Debt - Have you been paying the minimum on your credit card each month? You could save hundreds or even thousands of dollars in interest if you use some of your refund to make a significant dent in your debt.  (Photo Illustration: Spencer Platt/Getty Images)

Photo By Photo Illustration: Spencer Platt/Getty Images

Save for a Sure Thing - Know that you’re attending an out-of-town wedding this fall, or that you will need to replace your laptop at the end of the year? Rather than using your credit card, start putting a bit aside each month so that when the time comes to pay for it, you can do so without going into debt. And if you use an account that earns interest, you’ll make a little cash, too!  (Photo: Karin Dreyer/Corbis)

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Save for a Sure Thing - Know that you’re attending an out-of-town wedding this fall, or that you will need to replace your laptop at the end of the year? Rather than using your credit card, start putting a bit aside each month so that when the time comes to pay for it, you can do so without going into debt. And if you use an account that earns interest, you’ll make a little cash, too!  (Photo: Karin Dreyer/Corbis)

Max Out Your Child’s 529 - These savings plans allow you to sock away money that your kids can use for school without paying taxes to Uncle Sam. Maximum annual contribution amounts vary by plan — add what you can to help your little ones enjoy a brighter future.   (Photo: 68/Ocean/Corbis)

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Max Out Your Child’s 529 - These savings plans allow you to sock away money that your kids can use for school without paying taxes to Uncle Sam. Maximum annual contribution amounts vary by plan — add what you can to help your little ones enjoy a brighter future.   (Photo: 68/Ocean/Corbis)

Photo By Photo: 68/Ocean/Corbis

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Invest in Your Home - If there is a home improvement project you’ve wanted to tackle that can add value to your house, go for it. Bonus points if it also lowers your current bills or qualifies you for a tax credit next year, such as installing windows that increase energy efficiency.  (Photo: Paul Fallman/Orlando Sentinel/MCT via Getty Images)

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Invest in Your Home - If there is a home improvement project you’ve wanted to tackle that can add value to your house, go for it. Bonus points if it also lowers your current bills or qualifies you for a tax credit next year, such as installing windows that increase energy efficiency.  (Photo: Paul Fallman/Orlando Sentinel/MCT via Getty Images)

Beef Up Your Retirement Savings - Open and fund an IRA to boost your savings for your golden years. You can contribute up to $5,500 a year and use it tax-free in retirement.  (Photo: Rolf Bruderer/Blend Images/Corbis)

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Beef Up Your Retirement Savings - Open and fund an IRA to boost your savings for your golden years. You can contribute up to $5,500 a year and use it tax-free in retirement.  (Photo: Rolf Bruderer/Blend Images/Corbis)

Invest in Yourself - Taking an online or local class to learn a new skill or brush up on an old one can be a boost to your earning potential or help you start a new side hustle. Plus you can qualify for an education tax credit on your next return.  (Photo:Chris Carroll/Corbis)

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Invest in Yourself - Taking an online or local class to learn a new skill or brush up on an old one can be a boost to your earning potential or help you start a new side hustle. Plus you can qualify for an education tax credit on your next return.  (Photo:Chris Carroll/Corbis)

Photo By Photo:Chris Carroll/Corbis

Buy Life Insurance - It’s never too early to purchase a policy that could protect your family if anything happens to you. Use a site like SelectQuote.com to find an inexpensive option, and pay for the entire year upfront to save on your premium.  (Photo: Jose Luis Pelaez Inc/Blend Images/Corbis)

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Buy Life Insurance - It’s never too early to purchase a policy that could protect your family if anything happens to you. Use a site like SelectQuote.com to find an inexpensive option, and pay for the entire year upfront to save on your premium.  (Photo: Jose Luis Pelaez Inc/Blend Images/Corbis)