By Alan Prahl

Claim a tax refund concept with form template close upThe IRS recently said it has issued almost 40 million tax refunds. The average federal refund so far this year is $3,120. A financial windfall like this offers many spending and planning opportunities. What will you do with your refund?

Rather than giving in to the urge to splurge on the first thing that comes to mind, try using a “want list.” Put it on your refrigerator or favorite electronic device where you’ll see it often. As you think of items you want or need, add them to the list.

Dream a little. What’s on your bucket list? Is there a vacation you have dreamed of taking? Is there something you’ve always wanted for your home?

What do you think about often? Do you wish you had more money in savings? Would you feel better if you paid down debt?

Build your want list for at least a few weeks and then sit down and sort through your ideas. Here is an example of a possible strategy:

Emily and David have six items on their want list. They would like to add $800 to car repair savings, pay off their $800 Visa bill, pay off their $500 Kohl’s card balance, save $1,000 for a vacation, add $1,000 to their emergency savings and buy a new couch for $2,000. While they received a $3,300 refund, their want list includes $6,100 of ideas. So, they prioritize.

Many financial professionals would recommend paying off the Visa and Kohl’s bills ($1,300 total) to eliminate the high-interest debt. They still have $2,000 left.

They will need new tires soon so they decide to add $800 to their car repair savings. That leaves $1,200.

It would be quick and easy to put the remaining $1,200 aside for a vacation and that would be covered, but nothing has been added to their emergency fund. They want to do both so they decide to split the remaining money.

They put $700 into their vacation savings fund, which is 70% of the way toward that $1,000 goal. Because they paid off their credit cards, instead of making monthly payments on those bills, they can put that money into their vacation fund and look forward to a nice trip.

They put $500 into their emergency fund. To continue building their emergency savings, they set up an automatic monthly payment from their checking account to their emergency savings. They will continue to save automatically until they have at least three months’ of living expenses set aside for emergencies.

A combination of paying down debt, adding to savings and having a vacation to look forward to offers immediate financial strengthening plus positive encouragement to stay on track financially.

Alan Prahl is with FISC, a nonprofit program of Goodwill NCW.