Many happy tax returns.(CR money)

Although you are about to hand a sizable chunk of your hard-earned income to Uncle Sam this tax season, the Internal Revenue Service will probably send a small portion back. Last year 76 percent of filers received a refund check averaging $2,032. Tax cuts passed in 2003 should make refunds even higher.

What to do with such a windfall? We asked more than a dozen financial planners and budgeting experts across the U.S. All recommend that you focus on money-management basics: paying down debt, preparing for emergencies, and building up your retirement funds.

Sound advice, but many consumers haven't been following it. Only 63 percent of workers between the ages of 21 and 64 have retirement accounts, and the median balance is $27,000, according to a 2003 Congressional Research Service report.

If you are due a refund, you should use the money to do the following:

Slash debt. Thirteen of the 16 experts we consulted said that reducing your debt should have first claim on your refund. Saving or investing your refund without paying off your debts is like putting your money in a piggy bank with a hole in it. You will never get ahead earning 1 percent on a money-market account while paying creditors 13 percent (the average rate at press time) on credit cards.

Repay debts with the highest interest rate--usually credit cards--first, because they drain the most cash from your budget. Interest on home-equity loans is deductible, making those debts cheaper than they look, and thus a lower priority.

Fend off the unexpected. No matter what your financial situation, you need an adequate emergency fund. Planners used to recommend setting aside at least enough to cover three months of expenses in case you lose your job or run up big medical bills. Now many recommend that you amass enough money to last six months. Their rationale? "People are unemployed for longer periods of time, and are being forced to pay more toward their health care," says Loretta Nolan, a fee-only financial planner in Old Greenwich, Conn.