Making The Most Out of Your Tax Refund

Columbia New Home Buyer Team
Published on March 15, 2016

Making The Most Out of Your Tax Refund

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You can use your tax refund in a variety of different ways really. You can go for a vacation, buy a brand new TV, or some other luxurious ways you might have in mind. However, with a tax refund averaging $3,000, one of the most efficient ways of using it is to reinvest it back into your home. Regardless of the amount, if you are getting a tax refund this year, you can use the following suggestions, to reinvest your refund and make improvements to your home.

Clearing debts 

You might have found yourself in a position where you needed a loan. It might have been to start a business or a home reconstruction. You might also have taken a loan for some other personal projects that needed completion when the funds were not readily available at the time.

You can use your tax refund to pay some of those loans and debts you currently have. This will save you from accumulating further interest on your loan. You may also be able to avoid other repayment methods such as credit cards, which have high interest rates. Once you clear your debts and loans, your will be able to put your financial position on course and enjoy some peace of mind.

Renovations 

There will always be repairs, renovations, or other new ideas going through your mind. However, you may be faced with the obstacle of locating the funds to facilitate your project, since it may not me an immediate priority for you. It could be repairing a broken sink, maintaining the hedge or even repainting a room.

With your tax refund, you can cover the costs involved in such minor projects without the need for any other additional sources of funds. As such, you will be giving your home a new look, adding to its overall value and as well as enhancing your own home environment.

There’s a wide range of projects you could put your refund towards. From security to other basic aesthetic improvements like those mentioned above. Everyone has a number of changes they would like to make to their house. When you finally have the time to do so make sure you have the funds put away to execute your vision.

Flood insurance

The federal government, through the National Flood Insurance program offers insurance coverage at a fee of $700 annually. Considering how massive the problem can be and the damages you could incur, that fee could easily be covered by your refund. It’s only going to take a small portion of your tax refund and prevent you from facing future losses brought by floods.

Floods can occur anytime it rains leaving you with a rather sizable bill on your hands. Moreover, homeowners insurance does not cover floods that occur because of rising water. Instead of taking the chance, use a portion of your tax money to buy flood insurance. You will have given yourself some peace of mind and financial security, knowing that in the case of floods, your losses will be recovered.

Also take into account the usual weather patterns of your neighborhood/city. If you live somewhere in the Pacific Northwest for example where rain is very frequently you may find more use for flood protection than in a desert city.

Energy saving installations

Energy costs consume a large portion of income in most homes and they continue rising every year. From lighting, showering, to air-conditioning and heating systems, all these activities consume energy in terms of water and electricity. Some of them tend to be old and worn out further increasing the energy consumption. There are simple fixtures that you can install and save yourself a significant amount of energy costs in future.

You can install water efficient kitchen faucets and low-flow shower heads or even replace your old lighting system with LED lighting appliances and fixtures. Other affordable options include buying a new energy-efficient refrigerator, purchasing a high-efficiency furnace, sealing air leaks, replacing old water heaters, an energy efficient clothes dryer or even adding insulation.

regardless of the value of your tax refund it should be used in the most appropriate ways. A home improvement plan and paying debts are advisable ways through which you can spend your tax refund. However, always start with the most urgent need.

 

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