So you got a refund check. Chances are it's for thousands of dollars -- the average refund is running just above $3,000 this year, according to the Internal Revenue Service. That's a nice chunk of change. Here are 10 good things you could do with the money. Then, again, here's something to consider: Wouldn't it be better to have a bigger paycheck instead of lending Uncle Sam all that money interest-free every year? Use Kiplinger's tax withholding calculator to see whether you can adjust your withholding and give yourself an instant pay raise, which you can invest or put into an interest-bearing savings account now.

1. Pay off credit card debt. Using your refund to pay off a balance with an 18% interest rate is like earning 18% on your investments -- an incredibly valuable use of the money. And if you pay off your balances, you can afford to close some cards that are now charging high fees.

2. Rebuild your emergency fund. Many people raided their emergency funds over the past year and had little extra money to restore them. You could use your refund to start rebuilding that fund, which can help you avoid landing in credit card debt if you have an emergency. Keep the money easily accessible in a money-market account or savings account that earns interest.

3. Boost retirement savings. You have until April 15 to contribute up to $5,000 to an IRA for 2009 (or $6,000 if age 50 or older). If your modified adjusted gross income is $120,000 or less if you're single, or $176,000 or less if you're married filing jointly, then you can contribute to a Roth IRA, which lets you withdraw the money tax-free in retirement. If you earn too much for a Roth, you can contribute to a nondeductible traditional IRA, then convert it to a Roth.

4. Fund a taxable account. Already maxing out contributions to your tax-deferred retirement account? Consider opening a taxable account and using your refund cash to buy stocks or funds. There are no restrictions, such as early-withdrawal fees, on tapping taxable accounts. Plus, when you sell a winner, you are taxed on the profits at the maximum 15% capital gains rate. Traditional retirement account distributions, however, are fully taxed at ordinary rates as high as 35%.

5. Consider alternative investments. If your retirement portfolios are overloaded with standard stock and bond funds, you might want to use your refund cash to go in a different direction. One option: cash-value life insurance, which would provide tax-deferred earnings as well as liquidity and flexibility.

6. Build your college savings. It's always hard to juggle saving for college and retirement. Here's an opportunity to use your extra money to contribute to a 529 account. You'll be able to use the money tax-free for college bills, and you could get a state income-tax deduction for your contribution.

7. Help your kid save. You can use the extra money to contribute to a Roth IRA for your child. Your kid is eligible as long as he or she has earned income -- from mowing yards or baby-sitting, for example. Your child can contribute up to $5,000 or the amount of his or her earned income for the year, whichever is lower, and you can give him the cash to do it.

8. Replace old appliances. Have a dishwasher that's seen better days? Now is a good time to buy a new one. States are offering rebates to consumers who buy energy-efficient appliances to replace old ones. To find out which appliances qualify for rebates in your state, use the Department of Energy's interactive map.

9. Spruce up your yard. A little cash can go a long way toward improving your home's curb appeal. If your house will be on the market, you can't afford not to spend some money and time on landscaping that will distinguish your house from others.

10. Give to others. If you have your financial bases covered, consider using your refund to make a charitable contribution to help others in need. You'll feel good, and you'll be rewarded for your good deed when you file your tax return in 2011 (charitable contributions are deductible if you itemize). See "7 ways to check out a charity" for tips on finding a worthy organization.   

1. What’s your vision?
Make a blue-sky list: if money were no object, what would you have done as a part of the remodel? Make another list that includes any necessary-but-hidden upgrades: plumbing, electrical, structural work. Next, prioritize your blue-sky list. What’s most important to you? Rank the list with the must-haves at the top of the list.

2. How are you going to pay for it?
Before you get any estimates, it’s a good idea to set your budget. That way, you know in advance what you can afford, before you get tempted to over-extend yourself. If you’re planning on taking out a loan to pay for your remodel, estimate what monthly payment you can afford. Your choice of loans will impact how much you can borrow, so do your research: a cash-out refinance, home equity loan or line of credit are all smart options If you have cash set aside, determine the total amount you want to spend.

3. What’s it going to cost?
At this point, you’ll probably want to talk to a contractor and/or architect, depending on the nature of your project. Ask for recommendations from friends or family, or use websites like ServiceMagic® to find reputable professionals. Get estimates on your blue-sky list. How does the cost compare to your budget? Be conservative – plan for 20-30 percent cost overruns. Take another look at your list: what are the items on the list that you can live without or that you can do yourself?

4. What’s your timeline?
Are you preparing for some event, like a wedding or a new baby? This is important information to convey to your contractor or architect. Again, be conservative and pad the timeline. Remodeling projects are like any other complex project: even the best managed projects run into snags and delays. If your project is very large, or involves disruption of high-use areas of your home – the kitchen, for instance - consider carefully your living arrangements during the renovation. Don’t rule out moving out – you and your family may need a respite from the dust and noise, as well as the strangers trooping through your home.

With the deadline looming for the home buyer credit, many readers have asked if there is any update on a further extension of this popular tax credit. Recent housing data suggests that the housing market is still struggling with pending home sales dropping nearly 8 percent recently. The drop in pending (contract) home sales and unexpected declines in purchases of new and existing homes last month, adds to evidence the housing market, at the center of the worst recession since the 1930s, is still struggling to rebound. So the question a number of realtors, housing industry members and would be home buyers are asking is will the home buyer credit be extended again past summer?

Undoubtedly there is significant negative sentiment towards the home buyer credit, particularly from those home buyers who could not take advantage of previous versions with lower income limits; and from most conservative groups and fiscally focused politicians who want the home buyer tax credit to expire as planned. However, in addition to allaying the weakness in the housing market, extending the home buyer credit again could be a smart political move in an election year. Lawmakers, now more than ever, are looking for any successful mortgage and/or housing-related program that they can stand behind.

Besides the Fed’s mortgage-backed securities (MBS) purchase program, the homebuyer tax credit has been touted by some as an extraordinary success. Such, “success” can be claimed, providing the necessary political cover to advocate extending the program, especially since the simple fact is that it if doesn’t work — that is, if it’s not being utilized — that it costs nothing. Deficit issues and the concept of whether we’re rewarding those who might have bought anyway will take a back seat. Keeping home sales going promotes home price stability, and that makes for less-grumpy voters as election time rolls around.

As of yet, there are only a few official rumblings about further extending the home buyer credit for new and existing home buyers. However, if the housing market and political climate continues to deteriorate I would not be surprised to see the credit extended again (albeit with slightly different conditions) to at least the end of the year.

Qualification Period: First-time home buyers who bought after January 1, 2009 and before April 1 2010 (with closing to take place before July 1 2010), would get the $8,000 home buyer tax credit. For the purposes of claiming the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. If you and your spouse claim the credit on a joint return (both of you must meet the income and past ownership criteria to qualify), each spouse is treated as having been allowed half of the credit for purposes of repaying the credit. So the total amount claimable is still only $8000 (up to April 30th 2010).

For more details, contact our mortgage lender, Amy Marcou.