Last year nearly 40 million tax refunds were issued by the IRS, amounting to a whopping $125 billion, according to IRS.gov. The average refund was about $3,120.

That’s a pretty substantial amount of money for most people. And while the temptation may be to pick up that ridiculously large high-definition TV which takes up the entire wall of your man cave, you can make your “forced IRS savings” to work a little harder for you.

Following are a few options which may be suitable for you, depending on your current financial situation.

1. Pay off High-Interest Debt

Financial Situation: You are bearing the burden of at least some high interest debt, such as credit card debt, a personal loan, student loans, or you borrowed a couple hundred bucks from your shady local loan shark.

According to Nerd Wallet, the average household with credit card debt carries a balance of around $16,000, keeping plenty of American fathers and mothers tossing and turning at night.

A $3,120 tax refund could cut that balance by about 20%, saving you quite a bit of interest (assuming you don’t build a balance back up). And trust me, you’ll sleep better.

Benefits:

Decrease high interest debt and interest payments
Incredible feeling of financial peace (seriously, this happens)
Potentially improved credit score
No longer having to avoid the local loan shark

2. Contribute to an IRA

Financial Situation: If high-interest debt isn’t an issue in your financial life, an IRA contribution could be a smart next move as you save for the future.

IRAs are tax-advantage savings accounts. Roth IRAs are tax free when you take your money out at retirement, while Traditional IRAs are tax deferred, meaning you’re not taxed until you make retirement withdrawals. Other terms and conditions apply for both account types.

Benefits:

Tax advantaged contributions for the future
Invest in mutual funds or ETFs to help your money grow
Tax free growth of your investments
Start (or continue) building up that nest egg!

3. Save up for a Near Term Purchase

Looking to make some home improvements, start graduate school, or take a big family vacation in a year or two? Directing your tax refund to a high interest savings account could be a smart move as you work toward these and other savings goal.

Is your emergency savings account built up to an appropriate level? Building up your savings isn’t a near term purchase, per se, but it’s creating a buffer for when emergency purchases will be needed and giving you access to your own cash rather than using a credit card.

Benefits:

Build up savings towards upcoming purchases, rather than borrowing
Create an emergency savings fund for the unexpected
Earn a greater amount of interest compared to your checking account

4. Put it in a HSA

I recently wrote about how wonderful Health Savings Accounts can be, and I’ll briefly mention them again. HSAs provide those with high-deductible healthcare plans a way to save towards future medical expenses. Contributions are tax deductible AND are tax-free coming out as long as the funds are used for eligible medical expenses. The funds can also be invested within the HSA, again, free from income taxation. This triple tax benefit makes HSAs a no brainer in many situations.

Benefits:

A triple tax benefit scarcely found in the financial world
A crafty way to save for significant medical expenses in your senior years
Contribute up to $6,750 for families and an additional catch-up contribution of $1,000 for account holders 55 or older

5. Build a Stockpile of Black Cherry Soda

Putting $3,120 towards a massive stash of black cherry soda is a final option. It’s delicious, and come on, nobody’s making black cherry soda much anymore, so you may as well build up a healthy supply. I mean, what if this stuff was simply gone from the grocery store shelves one day? What then?!

These black-cherry-soda-drinking, fancy-suit-wearing millennials know how to party.

Hopefully you’ve discerned the absurdity of this last point, but I’m telling you, it’s often how people think about spending extra cash. A study from Bankrate.com notes that 84 percent of Americans intend to pay down debt, save, or invest their refund. While that statistic is very encouraging, it’s only talking about “intentions”, and it still means that 16% basically plan to use their refund to load up on soda, or some other consumer good with little or no long-term value.

Don’t be that family. Whatever your refund may be this year, think about your family’s financial needs and make a simple plan to put that money to work. If you want a little help or have some questions, feel free to give me a holler.