Ahad&Co is back this week, bringing you the latest tax news. Multiple media outlets are reporting that Americans are receiving smaller refunds than they did last year, down by 16% less than expected. It’s no surprise since the Tax Cuts & Jobs Act allocated more money toward paychecks, thereby reducing taxes paid through the year but also reducing the tax refund people were waiting for.

With this in mind, it’s important now more than ever to be financially smart about where your money goes. Here are some savvy ways to use your tax refund instead of spending it on an indulgence:

Save for emergencies: You never know when an unexpected expense can arise. Don’t put yourself in a position to have to borrow money or sell something, be prepared.

Pay off debt: Credit card payments should be at the top of your list if owe anywhere near $4,293, which is the average American’s credit card debt. You’ll thank yourself later for taking care of it now.

Invest in your home: Improvement projects will help to increase the value of your home. Small upgrades will help you in the long run.

Buy savings or municipal bonds: You can elect to have your refund pay for the purchase of government bonds by submitting Form 8888. This will slowly and safely grow your money.

It might be tempting to make purchases you have been waiting to make with your tax refund, like a tropical vacation. However, prioritizing your money is necessary now to avoid financial problems in the future.