If you are one of the fortunate ones receiving a tax return from the IRS this year, think before you just put it into your bank account and go on life as usual.  The average tax refund for tax year 2010 is about $3,000 – a bit more than last year’s average.

You have probably heard this before, but it makes sense: the first thing you should consider is paying down high interest credit cards and loans.  While there is no guarantee you could earn 10% on the refund, there IS a guarantee that you can take out a 15% interest rate on a credit card by paying it off.  And this is the same thing as earning 15%, tax free and risk free.

Two other things I think you should consider.  First, invest it in yourself.  Take a course that makes you a more skilled worker or employee, whether you work for somebody else or run your own business.  If you invest it in a new piece of equipment or a class, you will be leveraging the refund and your $3,000 may turn into $9,000 in additional income over the next year (as a hypothetical example).

Second, create a memory.  Spend some of it on a mountain biking trip in another town; a rafting trip or a dog.  The refund will become a memory of the past and/or the present if you spend it wisely.

Enjoy that refund; you earned it!