USA tax return check on top of 1040 tax form and American moneyFor some Americans, tax time is a time of excitement as they wait for a check in the mail or an electronic bank account deposit from the IRS due to overpayment of their taxes. Because this money is often considered extra money, many people will use the funds to splurge — maybe take a vacation or install a big screen TV. But while those may be considered fun purchases, the excitement of having them often wears off pretty quickly.

Another option is to use your tax refund dollars for long-lasting benefits and investing in your future. Here are some great suggestions for putting your tax refund to work for you all year long:

Build an emergency fund.

In these challenging economic times, most people live paycheck to paycheck. That makes managing unexpected expenses, such as car or home repairs difficult to manage. One way to protect yourself from unexpected expenses or losses in income is to have an emergency fund in a liquid savings account.

The ideal emergency fund is six months’ worth of your monthly take home pay, which typically allows you to get through a prolonged period without income. If that number seems high to save all at once, don’t worry; most people starting an emergency fund must build their way to that point. Remember, anything you can afford to set aside for an emergency can help.

Follow along with our online coach to make sure you’re on track to meet your emergency savings goals.

Reduce debt.Multi-ethnic Young Woman Relieved and Smiling Over Financial Calculations in Her Kitchen.

Do you have higher-interest credit card, auto loan, or other debt? Consider using your tax return to pay down your debt. It’s always wise to pay off the highest-interest debt first. If you can afford to, use your stimulus money to pay down outstanding debt you may have, such as student loans or credit card debt. Since these types of loans do not give you any equity like a mortgage, these are especially good to pay down and pay off as soon as you can.

Just like any other goal, paying off debt works a lot better when you have a plan in place, and resources to help you along the way. Our debt management coach will help you determine which outstanding debts you should focus on, and develop a plan to pay them off without disrupting your daily expenses.

Make home improvements.

Does your home need new windows or a new roof? Consider using your tax return money to finance these important home improvements, which can add value to your home.

Make an energy-efficient purchase.

Use your refund to purchase energy-efficient appliances, such as a dishwasher, dryer, or refrigerator, which can save you money all year long. For more extensive energy-saving home improvements, you may benefit from a Mass Save loan with a 0% interest rate. These loans are available for qualified energy-efficient improvements through the Mass Save program. Find out more about Mass Save.

Start a college savings plan.Group Of Female High School Students Talking By Lockers

If you have children, consider using the funds to open an Education IRA or 529 college savings plan. Once you open the plan, arrange to invest in the fund on an ongoing a basis. Even a small amount of money each month will add up over time.

This cost of college life coach will provide useful information about what you can expect to spend when going to college.

Save for retirement.

If you don’t have a retirement plan through your employer, consider opening an Individual Retirement Account (IRA) with your refund check. Be sure to check with your tax advisor first. To see what steps you need to take to prepare for retirement, use our retirement coach to uncover when you ant to retire, and what you need to do to get there.

Pre-pay your mortgage.

If you want to reduce the term of your loan and the amount of interest you will pay over the life of the loan, consider putting the funds from your tax return down on the principal of your mortgage.

The decision on how to best use your tax return depends on your unique financial situation. However, if you choose any of the options above, you’re sure to benefit. We can help you with whichever option you decide to go with through guidance and thoughtful conversations about your future goals. Talk to a personal Banker today.