Wondering what to do with your tax refund? Here are four smart, strategic suggestions. (Some of these could even make you more money!) This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and...

Two thousand eight hundred dollars.

That�s the average income tax refund these days. How would $2,800 feel in your pocket?

You�re probably getting a tax refund in the next couple of months, because nearly 80% of U.S. tax filers will. The question is, what are you going to do with your financial windfall?

It�s so tempting to spend, isn�t it? After all, life is short! Live it up!

OR you could resist the urge to splurge. Instead, do something smart and strategic that�ll benefit you over the long term � even make you some extra money.

Here are four suggestions:

1. Start an Emergency Fund

Do you have an emergency savings? When your tire blows out on the highway, you fracture your ankle on vacation, or you get laid off, having an emergency fund can save you from sinking into debt.

And funneling your refund directly into a savings account will help you avoid the temptation to spend it. Did you know you can have the IRS direct-deposit your tax refund in up to three different accounts?

If you don�t have a designated emergency savings account yet, consider the Aspiration Spend & Save account.

With the Aspiration Spend account, you can earn up to 5% cash back on your debit card purchases. With the Aspiration Save account (where you�ll funnel your tax refund), you can earn up to 11 times the average interest on your savings balance. (The FDIC reports that the average account earns just .09%.)

It takes five minutes to sign up for the account. Then, use IRS Form 8888 to designate which accounts you want to send your refund to.

2. Pay Down High-Interest Debt�

Credit cards can be dangerous, especially if you miss a payment or two and face high interest rates. So many of us are being eaten alive by credit card interest rates north of 20%.�

If you�re paying that much in interest every month, it becomes difficult to pay off the actual money you owe, and you just start treading water financially.

So use your income tax refund to pay down your highest-interest debt. You�ll be using the debt avalanche method, where you organize your payments by prioritizing debts with the highest interest rates first. This will save you money in interest over the long term.

3. Boost Your Retirement Savings

Your retirement savings could always use a little love, and the miracle of compound interest will help your savings grow and accumulate over the years.

Unfortunately, you can�t have your tax refund deposited directly into your 401(k) account, assuming you have one. But you can have the IRS deposit the money into an IRA instead. That�s an individual retirement account, which you can set up and put money into without going through an employer.

There are tax advantages, too. Similar to a 401(k), you won�t pay taxes on any money you contribute to a traditional IRA.

You can have the IRS direct-deposit your tax refund directly into your IRA. That way it�s out of sight, out of mind, and you won�t spend it on something you�ll regret later.

4. Get a Month Ahead on Rent (or Your Mortgage)�

The rent is too high! It�s no secret that housing in the U.S. is becoming less and less affordable. Low-income folks are the worst off here, but middle-income families are also getting squeezed.

If you�re like many of us, your selfish need to sleep indoors is eating up a big chunk of your income.

With a tax refund, you can do more than keep up. You can get ahead. Use your refund to make an extra month�s rent or mortgage payment (or at least stash it for that purpose).�

It�s a simple way to keep your peace of mind in case times get tough again.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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