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With the average refund standing close to $3,000, you probably already started thinking of all the ways to spend your windfall.  Contrary to popular belief, not everyone runs straight to the mall when they get their money.  Most Americans are planning to use the cash to put themselves in a better financial position.  If you have a refund heading your way, here are some smart ways to put it to good use.

Save it

A recent Bankrate survey revealed that 19% of working adults don’t save any of their income.  Some people blame their lack of savings on their expenses but others claim they just haven’t gotten around to it.  In either case, they’ll be kicking themselves when an emergency pops up and they can’t afford to cover it.  Accidents happen, things fall apart, and you need to be financially prepared to pick up the pieces when it does.  The rule of thumb is that everyone needs to have at least six months of expenses earmarked for emergencies. With your refund in hand, you no longer have an excuse for why you can’t save.

Pay off debt

If you have any high-interest debt, use your tax refund to reduce what you owe.  The funds may not cover your entire balance but it will get you moving in the right direction.  Start by ranking your bills from the highest to lowest interest rates.  This is the order in which you will be attacking your bills.  You still need to make the minimum payments on everything else though.  By taking this approach, you’ll save money because you’ll be paying less interest over time.

Open an IRA

Investing in a Roth IRA is a smart way to save for your retirement.  It doesn’t take much to start and your earnings grow tax-free.  Most people can contribute up $5,500 annually to the account.  However, those 50 or older can add an additional $1,000 to the pot.

Buy life insurance

Surprisingly, 41 percent of Americans don’t have life insurance.  You may feel like you’re in your prime now but we’re all going to die one day.  Some of us unexpectedly.  If you have people relying on you financially, you need life insurance.  This will replace your income and provide a safety net for your loved ones when you’re no longer around.  For those looking to save money, choosing term over whole life coverage is a lot easier on the wallet.  The downside is that term policies are only good for a limited time and they don’t accumulate cash value like a whole life policy does.