So you just got your tax refund from the government. Awesome! Now what? While many people take this and immediately blow it on something they’ll later regret (how many stories have we heard about Peloton bikes collecting dust in the basement?), you’re looking for something better to use it for. Otherwise, you wouldn’t be here reading this, would you? Here are four better things you can do with your tax refund.

Invest it

Your tax refund represents money that you overpaid to the government throughout the last calendar year. It’s not magical fairy money that the government gives you because it likes you – you worked hard for that money.

So why not make it work hard for you in exchange?

By investing your tax refund, you’re able to continue to benefit from it over the long term. Bonus points if you invest it into a registered account, where the money will work even harder for you. If you put it into your RRSP, for example, you’ll be able deduct that refund from your income for the next year, which then contributes to yet another refund that you can invest to keep the cycle going. It doesn’t get much better than that!

Pay Down Debt

If investing the money doesn’t suit your needs, you could always use it to pay down debt. Using the snowball method I wrote about in an earlier post, start by paying down your highest-interest-rate debt – usually; credit card debt, if you carry a balance.

Paying down your debt is a smart way to use your refund to improve your financial situation. There’s a certain sleep-at-night factor that comes with clearing your financial slate of debt, and putting your refund toward that noble cause is a choice you can feel good about.

Build Your Emergency Fund

If you don’t have a rainy day fund, your tax refund could be a great way to start one. You never know when you’re going to need it; maybe you get laid off from your job, or maybe you find yourself with a leaky roof like we did recently… in those situations, you’ll be glad you have your emergency fund as a buffer.

Renovate Your Home

Renovating your home can be a great way to get more enjoyment out of your current place, while also increasing its resale value at the same time. I’ll cover off some of the highest-ROI renovations in next week’s post, but I’ll say here and now that the kitchen and bathroom are right at the top of the list.

Don’t turn your nose up at energy-saving renovations, either. Replacing ancient windows can slash your energy bill by a massive amount. Our went down by 50% after we replaced the 30-year-old windows in our previous home.

Wrapping it Up

Your tax refund represents a great opportunity to give yourself a financial leg up. Rather than blow it on booze, video games, clothes or whatever else, why not put it toward something that’s going to benefit you for the long term? Don’t get me wrong: we need to live for the here-and-now, too. But often the people complaining that they have no money for retirement are the same ones that blow their tax refund on random crap year in, year out. Why not ride the feeling of satisfaction that comes from knowing you did something productive with your money instead?