It's tax season again! For many people this means a big check in the mail.

According to the IRS, the average tax refund is $3,120. For someone who earns $20/hr, that's nearly 4 weeks of pay!

If you're one of these lucky people getting a refund check, congratulations. You probably have more money in the bank than you have had for months. Maybe since last year's tax refund.

Obviously, you worked hard to file those taxes, and you're ready to treat yourself to some well deserved spending. But before you get too excited, consider a few of these smart ways to spend your tax refund.

Smart Ways to Spend Your Tax Refund

Yes, you can still “treat yo ‘self”. But a little patience now could make the rest of your year (and life) far more enjoyable.

Consider a few of these smart ways to spend your refund check – or a portion of it. Future you will thank you.


Help others

1. Give 10% to help others

Giving benefits the giver just as much (if not more) than the receiver. Yes, giving can even help you live longer. What better time to give than when you have extra money in the bank?  This tax season, consider using a portion of your refund check to help others. You may be surprised at the impact it has on your life.

2. Pay off your credit card debt

If you have any balance on your credit card, use this tax refund to pay it off! Credit card debit can quickly eat away at your bank account. Even if you have a credit card with a 0% APR offer (which I recommended if you carry a balance), you are still better off getting this card completely paid. Credit card debt is one of the worst types of debt, and you should pay this off before doing anything else.


3. Create an emergency fund

A study by the Federal Reserve discovered that 46% of Americans can't afford a $400 emergency without borrowing money.

Don't let this happen to you. Consider putting $1,000 of your tax refund into a separate account for use in an emergency.

To keep the money out of sight and out of mind, consider using the Qapital Savings App to start saving. Or, if you're looking for an awesome banking app that will allow you to categorize your savings, check out the Simple banking app. Both of these tools make it easy to save for a rainy day.

Already have $1,000 saved? Great! Now see if you can work toward a 6 month emergency fund. If you ever have to leave your job for some reason, you'll certainly appreciate this lifeline.


4. Invest in a traditional IRA retirement account

One thousand dollars today could be worth nearly $30,000 in 30 years (at a 12% annual return). Preparing for retirement is so easy! You just have to be willing to put money aside and not touch it. Do this with a part of your tax return and you'll be well on your way to a happy retirement.

And there's a second benefit to adding money to a traditional IRA – it will lower next year's taxes! You're saving for the future and getting more money back today. Win-win. Where can you start an IRA? Two of my favorite are M1Finance for stock investing and AHPFund for real estate.


5. Make necessary repairs to your house, car, etc

Do you need to replace your tires or buy a new A/C unit for your home? Tax refund season is the perfect time to do this. Rather than waiting for an emergency, plan ahead and make any necessary repairs before they become critical. Because this money is a “bonus” you can use it for these expenses without eating up your regular paycheck.


6. Get ahead on your bills

Especially if you have a hard time saving, consider using a portion of your tax return to pay your bills in advance. Pay your phone plan for the year, get ahead on your rent, or cover next year's car insurance premium. This will reduce your financial stress throughout the year as you'll have one less bill to worry about.

To stay on top of your money this year, consider using the free Trim app to save money on recurring bills and the Personal Capital app to track your budget.  


7. Invest in yourself with a class, gym membership, coach, etc.

The most valuable investment you can make is in yourself. Spend a portion of your tax refund to learn something new that will help you advance your career. Buy a gym membership (only if you'll use it) to get in shape and live healthier. Or consider hiring a tutor/coach to help you learn a new instrument, launch your own business, or achieve any other dream you may have. This investment will have long-lasting benefits.


8. Start investing on your own

Why not use your tax refund to start investing for yourself? Learning how to invest is a very valuable skill that can literally pay dividends.

There are many places that you could start investing with just $100, but two of my favorite are the Robinhood app (which will give you a free share of stock just for signing up) and the Stockpile app (which will give you $5 of free stock just for signing up).

And you can always withdraw this money when you need to make a purchase or pay off a future bill.


9. Save for large upcoming purchases

Are you planning to visit family across the country this year? Is it time to buy a new phone? Are you going to spend a fortune on Christmas gifts this year?

Don't be surprised by these purchases. Instead of putting them on your credit card to pay off later, plan ahead now. Set aside money for these purchases and you'll be able to easily afford them when they come up. Again, the Simple banking app and Qapital savings app are both great tools for saving.


10. Pay off student loan debt

Although not as bad as credit card debt, it's still smart to get rid of student loan debt. After paying off credit cards, building up an emergency fund, and preparing for other purchases, consider using some of what's left to pay off your student loans. If the interest rate is high, consider refinancing your student loans with a tool like LendKey to save on your monthly loan payments.  


Then treat yourself (and feel good about it)

Use part of your tax refund on the items listed above, and you can feel great about spending a portion of it on yourself.

But more importantly, you'll be one step closer to making a richer you.

What do you think is the best way to spend a tax refund? What's the best (or worst) way that you've spent your tax refund in the past?