5 WAYS TO INVEST YOUR TAX REFUND

Here are some suggestions for using your refund so you can live a little...

Pay down debt. If you owe money on your credit cards, it may feel depressing to use your refund to pay off just a portion of that seemingly perpetual debt burden. Wouldn't it be more fun to go shopping? But if you're feeling practical, and especially if you're paying interest rates along the lines of 18% a year on a card, this is one of the smartest things you can do with an extra few hundred dollars. If you were to invest the money,you couldn't expect to earn anywhere near 18%. So paying down your debt is like getting a risk free 18% annual rate of return.

Do some preventive maintenance. Take a long hard look around the corners of your life. Are there some minor repairs you could make today that would spare you a much bigger expense down the line? Make a list of all the little things you tend to avoid because you don't have the extra cash because now that you do, you can: Pump out the septic tank, get the roof fixed or touch up your home's paint job. Visit the dentist. Take the car in for new tires or a tuneup. Join a gym or sign up for an aerobics class.

Make a plan. Find a financial planner to help you create a long-term investment plan and learn how to manage your money better.

Invest in investing. A safe, easy and inexpensive way to learn more about how money works is to take your refund and start an investment club with a few likeminded (and coldfooted) friends. The National Association of Investors Corp. ("Investment Education for Investors and Clubs Since 1951"!) has a Web site where you can learn how to structure your investment group.

Upgrade your quality of life. It's tempting, when you know that a windfall is coming your way, to daydream about all the wonderful things you could get. Those boots you wanted! The new mountain bike! But getting a refund isn't the grownup version of a visit from Santa. Before you go on a spending spree, think about what would really improve your quality of life. Take a cooking class instead of celebrating at a fourstar restaurant. Or junk your old, overstuffed organizer and replace it with a Pocket PC or Palm. Think about things where the thrill (never mind the Blue Book value) won't be gone in a week, and you can get a real return on your investment