When the average income tax refund for 2007 is calculated, it will be about $2,500. Whether you file online or on paper, you now have the opportunity to split your refund so it will automatically be sent to three different places, like an investment or checking account.
When a big deposit shows up in a checking account balance, most of it will probably be spent, often not wisely.
You can designate an amount to be sent to a savings account, an IRA, education savings, or a health savings account. To deposit to more than one account, fill out Form 8888, available at www.irs.gov.

One professor of finance has this controversial advice: Unless you are wealthy and changes in the stock market won't affect your future standard of living, stay away from stocks. Zvi Bodie, professor of finance at Boston University, says risk-free investments are better. He recommends U.S. Treasury inflation- protected securities (TIPS), which can protect your money from inflation for 20 years. Series I bonds protect from inflation for 30 years. He puts Series I bonds in his taxable accounts because taxes are deferred until they are cashed in. With TIPS in your retirement account, you steer clear of paying taxes on accrued interest.