Being Wise with Your Windfall: Tips for Using Your Tax Refund

coins-currency-investment-insuranceIf you’re expecting a hefty tax refund this year, you may, like many people, intend to have some fun with your windfall. After all, it’s your money and you worked hard for it. There’s nothing wrong with heading out for some much-needed vacation time or buying a big gas grill for those summer cookouts. As tempting as that may sound, before you buy anything, consider the benefits of using a tax refund to better your financial situation.


If you’re among the many Americans who lack a rainy-day fund, think about setting all or part of your refund aside in an interest-bearing savings account. You never know when the transmission in your car may give out or an aging roof might start to leak. These are costly repairs, and the average American is unprepared for them; in fact, just 39 percent of Americans are capable of covering an emergency costing $1,000 or more. If you lack at least three months worth of emergency savings, that tax refund may serve you better as an emergency financial reserve.

If your roof could use some work, repairing it is an excellent use for a tax refund. You’ll head off more serious problems resulting from neglect somewhere down the line. But be diligent in looking for a qualified roofing contractor, and ask yourself several questions to determine what, exactly, you need. Check with the Better Business Bureau to make sure your contractor is accredited, and check out the BBB website for complaints or any disputes or scams a company may have been involved in, as well as tips regarding what to look out for.

Pay Down Debt

Debt is a fact of life for most Americans. If you struggle with credit card debt or are behind on the mortgage, your refund can help you out. Paying off debt is a smart move because the high-interest merry-go-round can be very hard to get off when you’re just managing it by paying the minimum every month. That can take you years to pay off even a moderate amount.

College Savings

According to CNN Money, most Americans can expect to pay about $57,000 for a degree at a public college, and more than $100,000 at a private institution. That’s a lot of money for anyone. Why not use your refund to open a 529 or Coverdell education savings account? And investing in your state’s 529 plan may result in a nice state income tax deduction. However, beware of using the money for unqualified purposes, which can earn you a 10 percent penalty.

Roth IRA

A Roth IRA lets you stash money away that becomes tax-free after age 59.5 as long as it’s been open for at least five years. You can contribute to it as you wish and withdraw the sum of your contributions without being hit with a tax or penalty. Your Roth earnings can be used tax-free for education expenses or for a first-time home purchase.

Invest in Yourself

You are your own most valuable resource, your best hope for earning and growing your assets. Improve your ability to do that by investing in training, additional education, or by joining a professional association. It’s a good way to sharpen your skill set, pick up new knowledge, and make valuable new professional connections. The more you can improve yourself, the more valuable you’ll be to an employer or to clients.


Speaking of self-improvement, are you aware that travel broadens perspective and helps you keep problems, challenges, failures, and successes in their proper context? Think about spending a portion of your refund to go someplace new, a destination that’s always interested you.

Think of a tax refund as an opportunity, an annual chance to improve your financial situation and personal prospects. Think carefully before heading off to the Jacuzzi store or ordering a season football ticket package. By being strategic with your financial prospects, you can put yourself in a much better position to acquire those “toys” you really want and achieve financial security.

5 Tips to Prepare a Home for Sale During the Winter Months

House for SaleUnless a residence is located in a climate that enjoys warm temperatures the year around, which is only a small part of the United States, home sales do tend to slump (at least somewhat) during the winter months. There are some steps you can take to up the ante when it comes to placing your home on the market for sale in the wintertime.


Be Generous with Illumination


During the wintertime, natural light is somewhat at a premium. This reality is coupled with the fact that in many locations across the United States, the days are cool and the nights are cold. In order to ensure your house is placed in the proverbial and literal best light you need to be generous with illumination.


In the daylight hours, open drapes, blinds, and shutters. Do this with every window with the only exception being one that overlooks something that is not particularly desirable. You will also want to turn on the lights. Many residential staging experts recommend turning on all lights in a residence when a house if being show for sale in the winter months. Some of these professionals go so far as to suggest placing spotlights on the floor behind some furnishings to enhance overall illumination.


Keep Pathways to the Residence Clear


Snow and ice on walkways impair the curb appeal of a residence. They also present a very real hazard. For these reasons, you must keep pathways to a residence clear of snow and ice. You need to shovel and scrape walkways even when snow of freezing is still falling.


Keeping paths clear conveys that a homeowner is meticulous about caring for a residence. Significantly, keeping paths from the street to the front door clear is an important step to prevent injuries at a residence.


Keep the Heat Up


If you are like many homeowners, you keep the temperature lower in order to save money. That represents an understandable strategy. With that said, when prospective buyers will be visiting your home, turn up the heat to ensure that it is comfortable.


The best strategy to employ is to turn up the temperature in your home a few degrees higher than normal in advance of a prospective buyer arriving at the property. This will heat up the home before a potential buyer arrives. Taking this approach tends to prevent the heating system from kicking in while a person is touring a home. Depending on the type of HVAC system in a residence, a distracting noise can permeate the residence when it turns on. You are likely used to any such interference; however, a visitor to your home will not be used to the noise.


Set an Idyllic Mood


During the winter months, you need to take extra steps to make the rooms in your home feel and look particularly inviting and cozy. Staging experts strongly encourage a homeowner to eliminate bric-a-brac in advance of showing a home to prospective buyers. With that noted, you will want to consider adding a few touches throughout the residence that convey a sense of warmth.


Consider placing vases filled with fresh flowers here and there throughout the house. If the fireplace is in good repair and functioning properly, lighting a fire for a buyer’s visit can be a nice touch as well.


Finally, consider displaying photos that present what the exterior of the residence looks like during warmer months of the year. These photos can be neatly arranged on a countertop in the kitchen or a table somewhere else in the residence.


Take Caution with Scents


You certainly want your residence to smell nice when presenting it to a potential buyer. However, you most definitely do not want to overdo. Indeed, some people are allergic to deodorizers and different types of scents.


More than a few Realtors have taken to using essential oils during an open house, specifically ones that emit scents like freshly baked cookies. Yes, that can prove to be a welcoming scent. However, you will find visitors looking for cookies or other munchies and you must not disappoint.


Going the essential oil routes (in moderation) is acceptable and prevents ovens from becoming unnecessarily dirty from baking. You can solve the cookie and munchie dilemma by preparing snacks off premises and having them set out during showings.


By employing these strategies you will give you residence a true leg up on the market when you seek to sell your home in the wintertime. Indeed, you are wise to utilize some of these strategies no matter the time of the year.




Jessica Kane is a writer for Nick’s Building Supply, Inc., the best place for custom made or replacement front doors online.