Your tax refund can be used to pay off your debt. — Photo by Mike Kemp/Tetra Images/Corbis

En español | Ever throw on a pair of pants and discover money in the pocket? It's exciting, right? You feel a little richer! But instead of saving it, you spend it, without much thought on what. With tax refunds on their way to bank accounts across the nation, here's a tip: Don't do that.

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According to the IRS, the average refund this year will be around $3,000. You could blow it on a great getaway deal to the Caribbean. You could spend it on the newest tablet computer so you can watch movies on the bus. You could just keep it in your checking account for when you need it.

Or, you could consider the following more intelligent things to do with your windfall. Whether your refund is $300 or $3,000, you can…

• Knock out debt. Is your credit card debt standing between you and retirement? Use all or a good portion of your refund to pay down a bill that seems to be holding you hostage. Prepay part of your mortgage. Reducing your debt load can improve your credit and also lower your monthly payment obligations.

• Stash it. That is, put it away for retirement or in the emergency savings fund that too many of us don't have. Continue building up your nest egg so that when you finally do retire, you can do so sensibly.

• Invest in yourself. Still just thinking about getting an extra certification in your career field? You've got the tuition now — do it. It could mean a promotion or pay raise at work. Register for the annual professional conference you never seem to have money for. If you've been putting off losing weight — even though your doctor insists — hire a certified personal trainer to get you going.

• Improve your home. A few energy-efficient upgrades can equal a big pay-off over time. With a sizeable refund, you might replace drafty windows or doors. With a smaller check, seal and insulate troubling gaps or cracks to lower your heating and cooling expenses. Screw out old-school incandescent light bulbs and opt for LED or compact fluorescent bulbs, which, yes, cost more, but save you more, too. When your refund is depleted, consider these no-cost ways to conserve energy.

• Do good with it. Help your grandkid afford college. Doing so could help you on your state taxes. Many states reward taxpayers with a credit for contributing to a 529 plan. Check to see if your state participates. Give to a charity in need. That's definitely deductible. Treat a friend to a full tank of gas. You'd be amazed by how one good deed brings on another.

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