5 Smart Ways to Reinvest Your Tax Refund Back Into Your Home
Use Your Tax Return to Add Beauty and Value to Your Home
Tax season is upon us and if you’re one of the lucky ones getting a nice return this year, then you are probably already thinking of the different ways you’re going to spend it. But, before you go on a shopping spree or splurge on a brand new smartphone, why not take a moment to think of a few smart ways that the money can be put to better use. For instance, reinvesting the money back into your home is a great way to enhance your home’s beauty, while improving market value at the same time.
If you want to use your tax return check to fund a few projects around the home that you’ve been meaning to get to, then here are five ideas to get you started.
#1: Start a Home Emergency Fund
Emergencies are called that because they’re unanticipated. And, when an emergency happens in the home, such as in the case of your water heater springing a leak or a tree branch falling through your roof, you can expect the repairs to be costly.
Because of this, establishing a home emergency fund is an excellent way to ensure you have funds available should an emergency occur. Even though you have insurance, you still need to cover your deductible, so depositing your tax return into an emergency fund account is a great way to build a security blanket for your home and family.
#2: Install a New HVAC System
If you have an HVAC system that is older than 15 years, then there’s a good chance that it is not working efficiently and thereby costing you a lot more money to operate. And, because a new HVAC system is one of the most expensive home repairs you can make, it makes sense to use your tax returns to fund the project.
A new HVAC system will not only make your home more comfortable, but it will also lower your energy bills while adding value to your home. It will also make your home much safer because old HVAC systems can develop dangerous gas leaks and other problems.
#3: Remodel Your Bathroom
Remodeling the bathroom doesn’t have to be tremendously expensive, so you can make certain improvements no matter how much of a return you’re expecting. You can do small improvements like painting the walls and re-grouting the shower, or you can go big and replace the vanity, the flooring, the lighting, the toilet, and more. A new or upgraded bathroom adds value to your home and makes your home more enjoyable for your family.
#4: Install New Windows
If your home has old, drafty windows, then you can use your tax return to swap them out for newer, better-insulated ones. New windows will not only keep the inside of your home at a more comfortable temperature for less money, but they’ll also improve the look of your home on the outside and positively impact your home’s overall value on the market.
#5: Pre-Pay Your Mortgage
Did you know that if you make one extra mortgage payment per year, you can pay off your 30-year mortgage eight years early? Using your annual tax return to make that extra payment every year is an excellent way to build equity faster and to get out from under the bank’s thumb in 22 years instead of 30. Plus, the money isn’t coming out of your pocket, so there’s no impact whatsoever on your bank account balance!
These are just five simply options for using your tax return to help improve your home, but they’re not the only ones. You can also add new insulation to your attic, refinance your mortgage, improve the landscaping around your home, install a new deck, replace your roof, or just bank the money to cover the year’s general remodeling projects. As long as you’re reinvesting the funds back into your home, the money will be put to good use.