Almost every American household will see some tax savings on their paycheck sometime in April. The average overall estimated tax saving should be about $1179. There are several factors that influence the exact amount of cash you will see including marital status, dependents, etc.

So how will you use your ~$100 per month in savings? I’ve compiled a top 5 list of great ideas of how to use your new found tax savings.

1. Start an automatic savings account – Just a few posts ago I talked about how easy it is to setup an automatic savings account and have money automatically deducted from your paycheck and placed into savings. It’s a great time to get started since you won’t miss the money.
2. Pay off some debt. Again since this will be unexpected money why not put it to use before it even gets to your budget. If you have high interest credit cards start paying extra on them every month or even every week. If you have online access to your credit card accounts they allow you to make payments at any time. When you get your paycheck, immediately send it to the balance.
3. Split the savings into a few different categories of your budget. First, give yourself some extra spending money. After all that’s what the stimulus package was designed for in the first place. Plan to go out to dinner somewhere nice every month and use some of the tax savings. Send some of the other money to a savings account or use it to pay down debt.
4. Start a Roth IRA or similar retirement fund or increase the amount you are contributing. Now is a great time to enter the market or increase the amount you are contributing. Stocks are at their lowest points in years so there are some great deals to be found.
5. Start an emergency fund. We all need to have a fund stashed away for a rainy day. Even if it’s just $1,000 in an easily accessible account you will appreciate it down the road. Life is full of unexpected events and being financially prepared will save you more money and stress.

Most of these tips won’t do a lot to stimulate the economy but it will help ensure that you are prepared for tough times. If you are already debt free, have a funded retirement fund, and have a funded emergency fund then have fun! You have successfully planned your finances so enjoy the extra money and help stimulate the economy!