You finished your tax returns and discovered you’ll be receiving a nice refund. You’re not alone. The IRS reports that the average American received a refund of nearly $3,000 in 2011. But before you start dreaming of a tropical vacation or a shopping spree, consider how that money could help you shore up your financial situation. Here are seven suggestions to consider.

<b>Pay off credit card debt.</b> Maintaining any balance — but especially the maximum — on a high-interest credit card costs you money every month. Pay off or cut down your balance and, depending on your account balance, you could save hundreds of dollars in interest fees this year.

<b>Boost your emergency fund.</b> Experts recommend stashing the equivalent of three to six months’ worth of income in an emergency fund. If your account is low, has been depleted or doesn’t exist yet, use your refund to help cover your expenses in an emergency.

<b>Ramp up retirement savings. </b>According to a 2012 poll by the Pew Research Center, approximately 38 percent of U.S. adults are not confident they’ll have the money to retire. If you’ve gotten behind in your savings, this may be the place to put your tax refund. Depending on your situation, age and income level, contributing to a traditional IRA or a Roth IRA is an option worth looking at.

<b>Start or add to a college fund.</b> Even if your kids are young, those college tuition bills will be arriving before you know it! Seek out an educational savings plan and get a head start on your child’s education.

Make an investment. Consider putting your refund money to work for you. Talk to your State Farm® agent about your options.

<b>Improve your efficiency.</b> Investing in home improvements can pay off in reduced energy bills. For example, replacing an old refrigerator with a new ENERGY STAR®-rated unit can save you $200 to $1,100 over the lifetime of the appliance.

<b>Bolster your life insurance.</b> If it’s been awhile since you reviewed your insurance coverage, this may be a prime opportunity. As life progresses and your situation changes, you may find you’re underinsured. Your State Farm agent can help you determine the level of coverage that’s right for you.

Neither State Farm nor State Farm agents provide tax, legal, or investment advice. Please consult your tax, legal, or investment advisor regarding your specific circumstances.