How you should spend your tax refund

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Don’t blow the three grand you just got from Uncle Sam on a vacation.

Now is the opportune time for the average American to use the tax refund to reduce credit-card debt or start an emergency savings fund.

That’s the advice of financial pros on how one should spend a refund.

“The Federal Reserve said millions of Americans don’t have any emergency reserve fund. Use your refund to set up an emergency fund of at least $1,000,” said Simon Zhen, a research analyst with MyBankTracker.com. He said the second priority is to reduce card debt.

With average card interest rates at around 20 percent, cardholders carrying that debt month to month have a great opportunity to get out from under by paying more than just the monthly minimum, advisers say.

“For many people, it makes a lot of sense to reduce credit-card and student loan debt,” said Lewis Altfest, an adviser in Manhattan. Altfest said an emergency fund is also needed to ensure one won’t fall back into debt.

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