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Spend that Tax Refund at Home, Wisely

Expecting some of your hard-earned cash back from Uncle Sam? If so, don’t fritter it away. Here are the top home-related places to put that refund to get the biggest bang for your buck:

  1. Pay Down the Mortgage. If you are an “average” tax refund recipient, you will get back just over $2,800 according to CNN Money. Using that refund to pay down your mortgage adds to the “asset” side of your net worth statement (increases your equity in the property by the amount of the principal payment), simultaneously reducing the “liability” side (decreases your mortgage debt). Just a single $2,800 payment toward principal on a $300,000 mortgage shaves several months off your loan payment schedule and could save you thousands of dollars in interest over the life of the loan. Make that same extra principal payment every year and your 30-year mortgage term could be reduced to 25 years or fewer. Consult an online mortgage calculator to see how the numbers work in your particular situation.
  1. Minor Home Improvements. According to Remodeling Magazine’s 2016 Cost vs. Value data, there are several projects totaling $2,800 or less that will increase your home’s value. Spending a mere $1,241, the average cost in our Southern Atlantic region for fiberglass attic insulation, will increase your home’s resale value by $1,624, providing a 30.9% return on your money if you sell (not to mention the savings you’ll realize in lower utility bills if you stay.) Try getting that in the stock market!
  1. Go from Shabby to Chic. How long has it been since you got a new couch, chair, throw rug, or bedroom set? Paying cash to refresh your furnishings pays dividends now in the emotional lift you’ll get coming home to a more comfortable and stylish space. You can get the monetary ROI too when you list your house for sale because buyers tend to bid higher on nicely (and neutrally) furnished homes.

Wise homeowners put their money where it can work hardest for them. Now, go forth and profit!

Image courtesy of ddpavumba at FreeDigitalPhotos.net 

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