Now that you’ve got yourself a pretty sizeable refund from the IRS, you should consider what that actually means and how you should use your newfound cash.

Basically, what just happened is you lent the federal government money for a year, without interest, and the money you are getting is really just your own. You’ve likely been told it’s better to receive no refund, because then the money will have stayed with you throughout the year.

However, it’s almost like an accidental savings that you didn’t prepare for, so when you get it, you should spend it wisely. On average, credit card debt in America is around $3,700 and most refunds hit a median range of around $3,000. So what should you really do with that extra cash?

Pay Your Debts

It only makes sense to use this extra chunk of change to pay debt that is accruing interest and costing you more in the long run. You won’t miss the money, and you’ll be happy to miss the debt. If your refund is large enough, consider putting some into a savings account and applying the rest to your debt.

Emergency Fund

Establishing an emergency fund that contains at least six months of savings for living expenses is a great use of your tax refund. This can make or break you should a financial disaster strike.

Pad Your Retirement

Use your refund to add money to your retirement account, so you won’t have to scramble for a contribution right before tax time. The sooner you add money to your account you can accrue interest which is only to your benefit. If you add to a traditional IRA, you’ll have a deduction ready for next year.

Estimated Taxes

If you are self-employed or work for yourself, or if you have income generating investments, you have to pay estimated taxes during the year. Deadline are essential, though so be sure to pay before them. Use your refund to knock out a huge part of your tax bill.

10% for yourself

While you should save at least 10% of your income and 10% toward paying off debt, you should take a small portion and treat yourself. Once all your essentials are covered and you’ve paid off some of your debt, you’re entitled to spend a little on yourself. It is your money after all.