Spend it? Save it? Invest it? Share it? Here are a few ideas for putting your tax refund to work for you:

Build the emergency fund. As we discovered in 2020, it’s too easy to be taken unawares by illness, job loss or other disasters. Use your tax refund to start or add to your emergency savings account, so you’re not left using credit cards to meet vital expenses.

Pay down high-interest debt. If you don’t pay off your credit cards monthly, or you’re paying down loans, this is your chance to lower your debt and reduce the amount of interest you owe—which, depending on the credit card, can be quite substantial.

Make a donation. It feels great to help a cause that’s close to your heart. If your finances are in good shape and you don’t need the money, donate all or part of your refund to your favorite charity. Bonus: If it’s a tax-deductible donation, it can be a deduction for you next year.

Invest in your kids’ education. According to U.S. News, from 2001 to 2021, the average tuition growth at national universities rose by 50 percent or more. Given that increase, adding your refund to their college funds wouldn’t be the worst use of the money. 

Invest in your home. Does your house need some overdue repairs? Are your creaky appliances begging to be replaced? Whether you rent or own, improvements and repairs can pay for themselves in lower utility bills and/or increased value.

Invest in yourself. Take an online class, pay for a professional certification, attend a conference, re-up your gym membership (IF you’ll use it), buy a better mattress. If it can improve your earning potential or your health, it’s a good investment.

Spend a small amount on something fun. No one says you can’t use a bit of your refund (say 10 percent) to do something nice for yourself—while using the rest of the refund wisely. A $500 refund gives you $50 to treat yourself to something you’ll enjoy.

A tax refund isn’t found money; it’s money you earned and loaned to Uncle Sam interest-free for a year. So, take advantage of it! Whether you fund an IRA, save for a down payment on a home, pay down your mortgage, invest your refund or buy life insurance, its lasting effects will ripple through your life long after the check has been cashed.