Tax time always brings out mixed emotions. There’s a little bit of fear, some irritation and eventually a little excitement if you’re getting a tax refund. Of course, all the experts would tell you that celebrating a huge tax refund is a mistake since you’re giving the government an interest-free loan. No argument from me, but at the same time, most of us prefer a refund over cutting a check. And we will error on the side of getting a refund too.

Of course, now that you have (or will soon have) that refund in hand, the more important question is how do you use it? I’ve always been of a practical mindset: a small percentage for fun and the rest goes to where it is needed the most.

3 Must-Do’s with Your Tax Refund

I’m going to break down the must-do and the fun-to-do options to help you determine how to put your tax refund to its best use.

Eliminate Debt

This isn’t sexy, but if you have debt or any outstanding bills, this is a good opportunity to catch-up or at least take a big bite out of your debt with your tax refund.

If you have multiple credit cards with balances, find the card with the highest interest rate and apply your refund to that card first.

If you have any refund money remaining, apply it to the credit card with the second highest interest rate. Continue doing this until you either run out of refund money or credit cards.

Create an Emergency Fund

I’m a big fan of emergency funds because having one has saved me from debt, and I’ve also shed tears when I lacked the funds to replace a computer I murdered with asparagus soup (apparently, it’s bad to spill a bowl of soup on your laptop).

If you don’t have an emergency fund, your tax refund makes it easy to create one.

Or if you do have one, but you dipped into it a few times during the past year, now you can easily replenish it. Ideally, you should have an emergency fund that can cover 3-6 months of expenses.

It may seem like a lot, but when emergencies happen—and they always do—you’ll be glad you have money set aside.

Boost Savings for Retirement, College Education or Other Big Goals

This one is a bit of a catch-all.

We all have goals (hopefully) and putting some of your tax refund towards your long-term goals is a nice way to give them a quick boost, especially since time plays an important role in growing your money.

Review your goals and see which one needs the most help. A Roth IRA might be a good choice if your retirement savings is lagging behind.

Or if you’re on track with retirement, then a 529 plan to help pay for your child’s college education might be another option.

3 Fun-To-Do Tax Refund Options

If you’re already in good shape financially or have some refund money left after you take care of your must-do options, you can consider the fun-to-do options guilt-free.

Take a Vacation

A popular choice for using your tax refund. Paired with some mindful credit card churning, you can treat your family to a great, expense paid vacation.

We tend to treasure experiences over material goods, so this can be a smarter use of your tax refund, rather than buying something that you will quickly forget. Just be careful that you don’t create debt with your vacation.

Invest in Your Personal Growth

This is a personal favorite of mine. I love investing in me. You could take some classes to learn and/or enhance a new skill set, which can help you earn a promotion or land a new job. Or take some fun hobby classes, such as photography, cooking classes, gardening or anything that fulfills you and creates some work/life balance.

Either way, investing in yourself is a great use of your tax refund money.

DIY Home Projects

If you are a homeowner, there is a good chance you have a list of home improvements you would like to make. Your tax refund can help make them go from dream to reality.

Even better, you can stretch your refund dollars by doing some of those projects yourself. These days you can find step-by-step directions and videos on almost every kind of DIY project imaginable on YouTube. Start with something simple and basic, then as your skills increase, so can the level of difficulty of the projects you undertake.