Best Ways To Get The Biggest Bang For Your Refunded Buck

Every spring, opportunity comes a knocking at the doors of many Americans. This opportunity comes in the form of a tax refund. Those of us who receive this refund are faced with the choice of what to do with it. It is tempting to blow it on something unnecessary.  Consider instead practicing delayed gratification. Tell yourself “NO” to what you want and put that refund toward something more essential. Following are several ideas as to what you could do with your refund this year.

1. Pay off credit card debt or any other loans you may have. This will save you money in interest.

2. Save for future expenses that do not occur regularly. Build an emergency fund, start a car replacement fund, plunk money into a 529 college savings account, or put some money back for a future project or vacation. Make plans for these things now so that you don’t take out a loan or use a credit card later.

3. Make an extra payment on your home mortgage. Making an extra payment to your mortgage is something that you should consider because it can save you thousands of dollars.  The fact is that just one payment can make a considerable difference in the total that you pay for your home and what’s more, it can shave years off of that mortgage.  You can use a mortgage calculator to help you to find out this information specific to your current loan.

4. Invest in a home improvement project. When investing in home improvements, consider those that will improve efficiency or boost the resale value of the home. Also consider improvements that can be deducted from your taxes next year. Roofs, windows, and solar panels are just a few items that can be deducted.

5. Upgrade an old appliance.  If you have an old appliance that is about to kick the bucket, you may consider investing in a new energy-efficient appliance.  Do your research to make sure it really is going to put change back in your pocket over the long haul.

6. Start a garden. Invest some money in beginning a garden.  You do not necessarily need a sunny spot in your back yard.  An herb garden can actually be planted in pots and moved into and out of the sun as needed.  Bring it indoors during the fall for extended enjoyment. If you have a small sunny space outdoors, consider growing a few more plants of a vegetable or fruit you enjoy eating such as tomatoes, peppers or berries.

Here’s one more idea:

Invest in your employability. Consider using some of your tax refund to take a class or two to become certified, to learn new skills or to finish a degree you started years ago. Take time to think about what few classes or workshops can you enroll in that will help pay bigger dividends with each paycheck and not just your IRS refund. Talk to advisors at Indiana university Kokomo and Ivy Tech Community College to find out more.

About the author:
(Jennifer Rivers is married to Chris and has three children.  She became a stay-at-home mom in 2005. She is ever seeking ways to cut costs without cutting quality. She is the leader of a group called Divas on a Dime.)