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How to make the most of your tax return this year

With higher interest rates, inflation and a looming recession, financial expert Andrea Woroch says to save that cash for a rainy day.

COLUMBUS, Ohio — With higher interest rates, inflation and a looming recession, financial expert Andrea Woroch said there's one way to make your tax refund count: Save that cash for a rainy day.

“A lot of people who are carrying debt might think that's the better move, but it's actually better to build an emergency fund first,” said Woroch, a consumer savings and budgeting expert.

RELATED: These are 3 tax credits you don't want to miss

She said you need to have money ready to go for unexpected bills without leaning on a high-interest credit card. Normally she recommends having three months of your living expenses saved up, but for many people, that’s not possible.

“Start with anything anywhere about up to one month of living expenses, set aside in a separate account. And for some people, that tax refund is going to give you that nice boost to that goal."

Woroch said you can take advantage of those rising interest rates.

“A good example is the bread savings, they offer a competitive 4.25% interest. So that's compounded daily, your savings is going to make money for you."

If you'd rather put your tax refund towards paying off debt -- consider this last piece of advice. Before you pay off any of your credit card debt, transfer your balance to a zero-percent balance transfer card.

“What this does is it waives interest for anywhere from 12 to 21 months, depending on the card offer. And this is going to give you more time to pay off that card without additional interest piling up. So that essentially helps make your tax refund go further."

If you're planning on using that refund for a large purchase consider certified refurbished for any electronics appliances or power tools. This could save you up to 60% -- just make sure you're buying from a reputable retailer like Amazon or eBay.

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