Tax refunds can always be a nice little bump when they arrive. However, your tax returns can contribute to a more secure financial future in many ways. While it can be tempting to spend those funds, here are six ways to use your tax returns to help prop up your finances long-term.

1. Pay off Debt

Use your tax refund to pay off or down any outstanding debt, such as credit card balances or personal or car loans. Be sure to bring any debts you're behind to current and pay off the debt in collections. If possible, pay off one debt in its entirety.

2. Emergency Fund in a High Yield Savings Account 

Whether you are creating or adding to an existing fund, there is never a wrong time to set aside an emergency nest egg for when the unexpected occurs. Using your tax returns to start or increase an emergency fund can allow you to remain in the best possible position to handle an emergency without worrying if it will affect your day-to-day life. And if you do it in a high-yield savings account, you’ll maximize the interest you can earn. 

3. Invest

The stock market is a great way to use your money to make more money! Most people believe that investing in stocks is for the wealthy and you need a lot of funds to get started, but this is not the case. All you need is a set amount of money you are willing to invest (i.e., your tax refund). Despite the potential risks that come with investing in the stock market, this can easily yield worthwhile long-term monetary gain if you give it the time to grow.

4. Student loans

We all know that student loan debt is a burden that many of us face. Paying off student debt can even become debilitating. However, your tax returns can be a great way to alleviate some of the strain. Instead of choosing between your bills and groceries or your student loan payment, you can do them all without worry.

5. Retirement

Putting your tax refund towards a retirement fund is a productive way to reap long-term benefits. Use your tax refund to contribute to your retirement plan, such as an Individual Retirement Account (IRA) or a 401(k). This can help you grow your savings and save for your future.

6. Education fund

A 529 plan is an investment account that offers tax benefits when the funds are used to pay for qualified education expenses.  Eligible expenses include college, K-12 tuition, apprenticeship programs, and student loan repayments.  Other qualified college expenses include tuition and fees, books and materials, room and board (for students enrolled at least half-time), computers and related equipment, internet access, and special needs equipment for college, university, or other eligible post-secondary educational institutions. While these accounts are commonly used for children, you can make yourself the beneficiary and take advantage of your saved funds.  

Whether you repay debt, save, or invest, you can’t go wrong with any of these choices, which can help you get on better financial footing.