Getting money back from Uncle Sam? Use it wisely. By Kimberly Lankford, Contributing Editor April 18, 2017 The average tax refund is around $3,000. If you find yourself sitting on a pile of cash courtesy of your 1040, resist the urge to treat it like play money. Instead, put the windfall to work for you.See Also: 17 Reasons the IRS Will Audit Your Tax Return 1. Invest in Your Home Your refund won’t be enough to redo your kitchen or bathroom, but it can pay for smaller home improvements. Add a backsplash, replace fixtures or paint cabinets to add to the resale value. Installing a programmable thermostat could lower energy bills. 2. Pay Down Credit Cards Using your tax refund to pay off a card charging 18% interest is like earning 18% on your investments. Tackle credit cards with the highest rates first. 3. Beef Up Your Emergency Fund Set aside enough money to cover three months’ worth of expenses in case of a job loss or an unexpected bill. Six months is even better. Keep the cash in an interest-bearing savings account for easy access. Take a look at seven more smart ways to spend your tax refund.