Using your tax refund

Today's the deadline to get your taxes filed - not a pleasant thought if you owe the government.  But plenty of people are getting refunds and the average check is $3,000.  Kelli Grant, Senior Consumer Reporter for SmartMoney.com tells how to handle it.

Reassess your withholding.   Getting a tax refund is certainly more relieving than owing a big tax bill, but you've basically given the government an interest-free loan.  Talk to an accountant, and HR, about how best to adjust your withholding.  You'll see more in your paycheck during the year, and have a more balanced return come next April.

Pay down your debts.  Credit card interest rates are hovering near 17%. If you are carrying a balance, using your refund to pay that down, or even eliminate a smaller debt, can go a long way to saving on interest charges.

Save for a rainy day.  It's a smart idea to have at least six months' worth of living expenses set aside in a cash account for an emergency.  Most of us don't have that, and your refund could provide a little extra padding.

Boost your investments.  Stash the cash somewhere it'll grow.  That might be in your IRA or your child's 529 college savings account, where it can grow tax-free.  Or contribute it to your brokerage account.

It's awfully tempting to spend your windfall, so go ahead. But limit yourself to 10% of the refund as fun money, especially if any of the other methods we've talked about ring true.  Even if your finances are in otherwise great shape, hang on to the bulk of the funds for something you need, rather than an impulse splurge.

For more information on your tax refund and other consumer tips click here.