A majority of Americans will receive a tax refund in 2012.  According to CNNMoney, in past years more than 80 percent of people expecting to receive a tax return reported plans to pay off debt or increase savings, both great ideas for improving financial health. 

Paying off high interest debt, such as credit cards, gives you a great return on your tax refund.  By paying down debt, you are receiving a guaranteed return on your money.  Once your debt is paid off, you will have more money to put towards other financial goals.  Even if your only debt is a low interest home mortgage, applying the money directly to the principal balance instantly gives you more equity in your home.

How much money do you have saved for an emergency?  Emergency funds are an important part of any financial plan.  The next time you are faced with an unexpected expense, such as a flat tire or a broken appliance, you will be glad you still have your tax refund available to cover your expenses.  Other savings options include increasing your retirement account or your children’s college savings funds.