Millions of Americans overpay the government every year and are owed a hefty sized tax return. The average tax return in the U.S is around $3000. Sadly many people receiving a tax refund just see the money as a windfall source of money and squander it away. Here is a list of smart ways to use or invest your hard earned tax return to make the most of it. While this list is not filled with the most fun things to spend your money on or save up for, it is the most practical.
* Down Payment
If you do not own a home you are flushing money down the toilet every month enriching someone else. When you own a home the money you put into it that goes towards the principle is money you can tap into in times of need, so using your tax return to save for a home is an investment. The first step towards home ownership is saving for the down payment.
* Property Improvement
If you do already own a home you could make smart use of your tax return by investing it into your home. Remodeling or renovating that old kitchen, basement or bathroom can easily increase your homes value, making your home a bigger investment.
* New Windows
If your home gets cold during the winter, it could be due to your windows. Older windows tend to be drafty and allow for heat loss. Newer modern windows are sealed better and help make your home more energy efficient, resulting in lower heating bills during the cold season.
* Make Your Home More Energy-Efficient
Anything you can do to cut down on power and gas consumption in your home will save you money on utility bills. Energy efficient homes provide you with long term savings so investing your tax return in making your home energy efficient is a wise long term investment. It also increases the resale value of your home.
* Save For next car
Saving your tax return every year in an interest baring account can go a long ways towards paying all cash for a car. In just 5 years you can have on average $15,000 to $18,000 saved towards an all cash purchase of your next auto and avoid having another monthly payment when it comes time to replace your current car.
* Emergency Prepping
Emergencies happen in life, we do not want to ever experience them yet they happen. Emergencies hit people the hardest when they are not prepared for them. Hurricanes, brutal winter storms and other disasters strike millions of Americans every year. Every person should have a disaster kit and a portable generator for their home, and your tax return can be used to purchase everything you need to weather any disaster you might face.
* Gym Membership
If you use a small portion of your tax return on an annual gym membership you will be investing into your health and well being. By purchasing the entire years membership upfront you will avoid having yet another monthly expense.
* Health Insurance
You can use your tax return to buy your health insurance or better yet upgrade your health insurance to a better plan. Perhaps a new plan with a lower copay or deductible or increased coverage. You only have one life, one body and your health insurance is the key to maintaining it.
* Financial Planner Services
If you have not already done so, you should consider using part of your tax return to hire the services of a financial planner. A financial planner can help you plan for retirement, how and where you can invest, help with starting and maintaining a healthy budget and so much more. Everyone should talk to a successful financial planner at least once in their life.
* A fire proof Safe
If you do not have a fire proof safe in your home, you should consider buying one with part of your tax return. Vital documents such as deeds, certificates and the like should be kept in a fire proof safe.