If you are expecting an income tax refund like millions of US taxpayers, read on. The good news is, you will have extra money. The bad news? It will be tough figuring out how to use it.

If you still don’t know how to make the most out of the extra income that’s about to come your way, here are some helpful ideas from financial experts.

Pay off your credit cards, your 401(k), or your mortgage. Paying off the amount you still owe on plastic maybe the wisest thing to do. Credit card interest rates are at an all-time high, so free yourself from crippling balances by wiping them out. Remember that paying just the minimum payment is never a good idea. Your money just goes into servicing the interest, and does not really reduce the principal.

But if your credit card is in good shape, why not make a lump sum payment to the principal on your mortgage? Doing so can save you a lot of money in the long run. Think about it: if you pay $1,000 to your principal on a $100,000-mortgage (assuming your rates are at 7 percent), you would save at least $4,000 over the loan term.

You can also use the money to add to the balance in your 401(k), and then use the money you would have used to pay the loan as additional tax-deferred premiums instead. This is not only sensible, but also very wise. This way, you put the money you have borrowed back into your account and let it earn interest, and make extra contributions to build up your account.

Establish a savings account for emergencies. You could lose your job anytime, so don’t dilly-dally; put aside your tax refund for an emergency account and be prepared for such a situation. An emergency fund should allow you to get by for at least three months if you ever lose your job. Use your tax rebate to beef up your existing emergency fund, or to start one if you haven’t yet.