What are some smart ways to use your tax refund? Getting a tax refund is exciting and stressful. What to do with this unexpected cash? Remember, this is not just extra cash. It’s your hard earned money that Uncle Sam is returning to you, so spend (or save) it wisely.
First and foremost you should make sure your credit card debt is under control. Also, if you don’t have any savings in an emergency fund, that is a great choice in these uncertain economic times. Another choice is investing, but that doesn’t just mean putting money in an account. Getting a tax refund is a great opportunity to use your refund to your advantage and create more cash equity by investing in your home.
WHAT IS CASH EQUITY?
Cash equity (also known as home equity) is the difference between a property’s current market value and the amount owed on the mortgage. Concentrating on building equity is a smart way to use your tax refund. There are several ways to build equity in your home. Among them, you can pay extra money on your mortgage or make extra payments over time OR you can add value to your home by remodeling or home improvement projects.
Affordable projects that help build cash equity:
- Landscaping – average return on value (AVR) – 100%
- Minor kitchen remodel – AVR – 98.5%
- Exterior improvements (painting, updated front entry – AVR 95.5%
- Deck, patio or porch addition (or repaint/re-stain) – AVR 90.3%
- Replacement windows – AVR 89.6%
Other high-dollar improvements you can undertake:
- Full kitchen remodel
- Full bath remodel
- Turning an attic into a bedroom or play area
- Converting a basement to useable space
BOOST YOUR HOME’S VALUE
Most homeowners wait until they want to sell their home to do necessary repairs, landscaping and painting the interior and exterior of the home. However, there are two problems with that approach.
- First, when homeowners are ready to sell they want to invest the least amount of money they can to make improvements. Generally speaking, you get what you pay for. Shoddy, less than professional repairs and paint jobs could cost you more than you invest.
- Second, you don’t get to appreciate the money you are investing. If it is time to repaint your home, go for it and then enjoy it. How often should you repaint your house? Click here.
ROI (RETURN ON INVESTMENT)
ROI is a calculation of the monetary value of an investment versus its cost. Both interior and exterior painting are projects with a significant ROI. On the average, painting your home results in any where from a $4,000 – $8,000 dollar increase in your home’s value. Whereas neglecting maintenance on your home results in negative ROI. Over time, the upkeep of your home results in cash value in your pocket.
FINAL THOUGHTS
The bottom line here is – don’t waste your tax return! You worked hard for that money. Even though it is tempting to buy a new big screen TV or take a fabulous vacation, firm up your family’s financial future first.
If exterior or interior painting is on your list, please give us a call. We can help with our prompt courteous service. We won’t leave until you are satisfied! Call Britt 803-603-6486 or ellisb@colatownpainting.com for a free, no-obligation estimate. See what our clients have to say on our Testimonials and Reviews Page.
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