"You never know when you'll have to tap into the those funds," he said.
• Pay off debt. Total credit card debt is at its highest point ever, surpassing $1 trillion, the Federal Reserve also found. The average American has a credit card balance of $4,293, according to the latest Experian data.
Start by figuring out what you owe, then decide whether to use the "debt avalanche" or "debt snowball" method to chip away at those revolving loans.
The avalanche method lists your debts from highest to lowest by interest rate. That way you pay off the debts that rack up the most in interest first.
Alternatively, the snowball method prioritizes your smallest debts first, regardless of interest rate. The idea is that you'll gain momentum as the debts are paid off and that will motivate you to keep going.
• Save for retirement, education or future health expenses. This is a great opportunity to open or boost contributions to a 401(k) or individual retirement account — helped, in part, by the new, higher limits for 2019.
For those with school-aged children, look into opening a tax-advantaged 529 college savings plan.
Alternatively, get ahead of health-care costs by investing tax-free dollars in a health savings account, or HSA, Carlisle advised.
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• Pay down your student loans. Putting an extra payment toward your student loan tab will save money on interest and reduce the length of your loan.
Specify that those extra funds get applied to the principal of the loan and not to future interest payments. (However, if you have unpaid fees, the money must be applied there first.)
You can even try the same trick on your mortgage by making a 13 payments a year instead of 12.
"For those who want to retire debt-free, this might be an opportunity to reach that goal a little faster," Carlisle said.
• Buy savings or municipal bonds. Rather than having the refund deposited into your checking account, you can elect to use that money to purchase bonds at face value through the U.S. Treasury by submitting Form 8888.
"You've been giving the government an interest-free loan, this is an opportunity to get some return," Carlisle said.