6 smart ways to spend your tax refund

NEW YORK (CNNMoney.com) -- Expecting a large chunk of change back from the IRS? Think carefully about where you want to spend it.

Nearly 90% of Americans are set to receive refunds this year at an average of $3,036, up 10% from last year. That's a lot of extra cash in your pocket, especially if you're just barely scraping by, or don't have any income at all.

Instead of spending that check on a shopping spree or splurge, it's important to put that money -- or at least some of it -- into something that will benefit you in the long term.

But that doesn't mean you can't enjoy it too. Just make sure you come up with a plan before you hit the stores.

Writing it down is a good place to start, suggests Diahann Lassus, co-founder of wealth management firm Lassus Wherley.

"The most important thing is to really think about where you want to spend that money and put it all down on a piece of paper," said Lassus. "Because many times, the dollars are bigger in your head than they are in your bank account so you end up spending more than what you've got."

Here are a few suggestions to help you craft your strategy:

Pay down debt: The last thing most people get excited about when receiving a refund in the mail is paying down debt.

But unfortunately, this is where the majority of your refund should go if you have a lot of debt, said Lassus. Just how much depends on what you owe.

"If you have huge credit card debt, a much larger portion of the refund needs to go to paying off this debt," said Lassus.

With lenders hiking fees and raising rates, debt is becoming increasingly expensive. So while it might not seem that exciting, you'll be able to sleep a little easier when you start making a dent in your debt. And once you've paid it off, you'll have more money in your pocket for discretionary spending and enjoyment.

Lassus usually recommends paying off the cards with the highest interest first. But if you have a few credit cards with small amounts on them, it might make more sense to pay some of these off first, she said.

Save for a rainy day: Everyone should have at least 3 months' worth of expenses in a liquid savings account. But especially if you're unemployed or worried about keeping your job, this is a crucial way to allocate some of your refund, said Tom Orecchio of Modera Wealth Management.

Chances are that at some point throughout the year, you will need to replace an appliance, pay a medical bill or repair something that's broken. Planning for a large expense later in the year can take the stress off of your weekly paycheck and give you a little extra wiggle room.

"Making sure you have adequate short-term savings is the second most important thing you can do [behind paying off debt]," said Orecchio. "And those who are employed but don't feel like they are on solid footing really need to make sure they have an emergency fund to dip into."

Orecchio suggests keeping this money in a high-yield money market or savings account that comes with a debit card or an electronic link to checking or ATM access.

Save for retirement: If you've taken care of your outstanding debt and have a healthy emergency fund, the next step is to tuck away some money for retirement.

To plan ahead, Orecchio said he advises people to look into whether they are eligible for a Roth IRA, or a tax-deductible IRA in order to save money on a tax-deferred basis.

Contributing as much of your refund as possible to a fund like this will allow you to worry a little less about your golden years, he said. The government allows you to contribute up to $5,000 a year into an IRA, or $6,000 if you're age 50 or older.

Invest in yourself: If you're unemployed or may be in danger of losing your job, earmarking a chunk of your refund to help you learn a new skill isn't a bad idea either, Orecchio said.

"If you have enough money put aside and don't have major debt, you might want to use this money to invest in yourself," said Orecchio.

"Go back to school to train for a new field of work, buy nice clothes for interviews, take a course on improving your résumé and interviewing skills or anything else that will improve your chances of getting a job."

Buy something you need: Saving up for a new home? This year's refund could help you make that down payment.

If you don't have debt to worry about and have a good amount of emergency cash on hand, go ahead and use your refund to complete a big purchase, said Lassus. While it might be tempting to make impulse purchases with your refund, putting it toward a planned purchase is a smarter choice.

"If you need a new car because yours is dying or want a washing machine because your old one is broken, put a certain amount of the refund aside for things like that," she said. "Refund dollars are really good for certain purchases you know you'll have to make."

Have a little fun: Even if you do need to shore up savings or pay off debt, that doesn't mean you can't enjoy some of your money. Making sure to do something for yourself can make you feel a little better about writing a check to the credit card company, or tucking it away in a retirement account for the next 20 years.

"You should save some of [your refund] for fun," said Lassus. "Whether it's something as simple as getting ice cream or eating out once a week or putting some dollars aside for a family vacation, sometimes you want to take at least 5% and do something fun with it."

And after the filing deadline, retailers, restaurants, hotels, spas and auto centers are ready to lure you in with tax season specials.

From clever $10.40 and $9.90 discounts at hotels and restaurants to half-priced spa treatments, be on the look out for deals reserved especially for IRS checks.