This is an exciting time for many, because it’s that annual springtime moment when you get a semi-unexpected bonus – your tax refund. The average tax refund amounts to about $3,000. Are you expecting one this year? If so, what will you do with it? Investing in your home, most likely your most valuable asset, is always a good idea.
How to Channel Your Refund Into Home Renovation
- Save for a Rainy Day: We should all have a home maintenance fund, the account on which we draw when the AC goes out, when the hot water heater needs replacing or when a hailstorm wrecks the roof. A home maintenance fund can be challenging to develop and maintain. Your tax refund would be the perfect seed for a fund that could be used when unforeseen needs arise in the future.
- Pay Down Your Loan: Rather than home remodeling or taking on some other project using your tax refund, why not pay down your home loan? For all homeowners, this would create greater equity and financial flexibility, and for others it might even mean no longer paying private mortgage insurance. Either way, you’re putting your tax refund to good use when you choose to lessen your debt obligation.
- Small Project, Big Impact: Home renovation ideas don’t have to be grand, sweeping ideas for fully transforming the look and feel of your home. Focus instead on doing something small and colorful – something that can stay under the $3,000 proposed budget while still making an impact. Consider a new and stylish backsplash for the kitchen, fresh landscaping for the yard, paint throughout your home or something else manageable.
- Increase Your Efficiency: Energy efficiency is the gift that keeps on giving in the form of long-term savings. You can achieve greater energy efficiency through a number of approaches, including additional insulation, replacing old windows, weather-stripping worn doorframes, replacing old light bulbs, etc. Energy-efficient improvements also tend to increase resale value.
- Enhance Your Curb Appeal: Your home’s exterior makes a first impression. Shouldn’t it be a good one? A $3,000 tax return is just enough for a beautiful new entry door, and you might even be able to work in a new mailbox, landscaping and other curb-appeal improvements as well.
- Manageable Bathroom Remodel: For true home remodeling, keep it simple by starting in the bathroom. With your tax refund dollars, you can afford new paint, new flooring, fresh grout, new faucets and perhaps even a stylish newvanity. You’ll stay under budget and be proud of the outcome.
These simple home improvement ideas will make a big impact, for not a lot of money.
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