If you’re a financially strapped college student and you’ve recently filed your taxes, you’re probably anxiously waiting for your refund check from Uncle Sam.
In 2017, the IRS reported the average refund was close to $3,000.
So what can you do with the extra cash?
Create an emergency fund
Whether you’re still enrolled or about to graduate, the workforce is your next step in life. Personal finance experts suggest all working adults should save up to 3 to 6 months’ worth of living expenses just in case you become unemployed or need time to recover from an accident.
Open a retirement account
You can also take a chunk of your tax return and put it toward an IRA or a Roth IRA . Depending on your age and income, you can contribute up to $6,500 for the year.
Tackle credit card debt
Some of you probably just returned from spring break and racked up several hundred dollars in credit card debt. If you pay off your high-interest credit cards, you’re bound to save up to 29% in finance charges.
Christmas Shopping Fund
Save a portion of your tax refund for holiday shopping. Saving your cash for gifts during the holidays will help you from racking up those high-interest credit card during Black Friday and Cyber Monday.