As for this year, well, that refund is already on its way. So why not put it to good use?  Here's how:

High-interest rate debt
If you have credit card debt, paying it off with this money is like an instant return on your investment: If you have a card with a 19 percent interest rate, for example, wiping that amount out is like earning 19 percent interest on the balance, because you won't have to pay it to the lender.

An emergency cushion
I've said it countless times before, but it bears repeating: Having a liquid emergency savings to fall back on is a necessity; even more so in this economy. You need at least six months' worth of expenses stashed away in a savings account, so if the unexpected comes along—you're laid off, your dog gets sick, your car needs major maintenance—you have money to cover the bills. That's how you stay out of credit card debt.

If you're covered in the first two areas, you can always use the extra money to boost your retirement savings. The average refund is about $2,500. If you invest all of it, you could have over $5,500 in 10 years; over $12,300 in 20; and over $27,000 in 30.

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