As tax returns begin to come, it gives us a chance to make a smart financial move. The average tax payer gets more than $2,000 back from the IRS. We want to help you make sound decisions with this unexpected money at your disposal!

Here are 5 smart ways to spend your tax return:

1. Erase Debt

There is nothing more satisfying than paying off debt that hits you month after month. Even if your refund does not wipe it all out, use it to pay something down or pay off high interest debt. If you have multiple cards, first tackle the debt on the card with the highest rate. Make a debt snowball plan and stick to it.

2. Emergency Fund

If you don’t have any high interest debt, start building your emergency fund. Building your emergency fund gives you peace of mind that when something comes up you will have the cash on hand to cover it. Ideally, you want to have three to six months of income set aside in the event of an unexpected illness or job loss. Getting the emergency fund started is a good way to get into the habit of saving.

3. Home Improvements

Many people like to use their returns to make much needed home improvements. Home refurbishments improve your home’s livability and appeal. Some improvements even enhance your homes energy efficiency, which lowers your cost going forward. Some examples are upgrading appliances, refurbishing the bathroom, new windows or doors, flooring, tankless water heater, increasing the curb appeal, or building a deck.

4. Retirement

You can maximize the benefits of your tax refund by funding your Roth IRA and letting it grow tax free until retirement. You can’t beat that kind of return. Your future self will thank you for preparing for retirement.

5. Vehicle maintenance

If you have been putting off necessary auto maintenance such as new tires, this is a great time to get caught up on these repairs so that your car continues to operate properly. Even if you are all up to date on maintenance tasks, consider setting some funds aside towards any future maintenance needs for the year.