Smart Ways to Spend Your Tax Refund

Three out of four taxpayers are expected to get a refund this year, and the average refund is about $3,000.  Is this money coming your way? Here are some smart ways to put it to use:

Invest in your career

Feel like you’re not getting anywhere in your current position? No new opportunities or additional responsibilities?  Haven’t had a raise in years? It’s a good time to freshen up your skill set, attend networking conferences, or take on a career counselor, for example, and look for new opportunities elsewhere because they’re starting to emerge.  In fact, in a sign that the labor market is slowly improving, workers are no longer doing whatever they can – and then some — to keep jobs they don’t necessarily even like.  They’re now quitting their jobs — at a rate we haven’t seen in over three years.

Put a dent in your debt

Did you know that this year’s class will graduate with about $25,000 in student loan debt, on average? Or that the average household has about $14,000 in credit card debt? This is debt that could stick around for decades unless you make an effort to attack it!  And, bonus: when you pay down this debt, you are essentially earning a guaranteed return that is likely much higher than any available investment. Pay off a credit card balance with an 18% APR, for example, and it’s like earning 18% on your investments!

Build your college savings

The cost of college tuition is up 300% since 1990 so the sooner you start saving, the better.  Consider opening a 529 account (minimum lump sum investment: generally just $250).  It’s an easy way to invest for in higher education.  Your money grows tax-free and withdrawals used to pay for college are tax-free, too. You could even get a state income-tax deduction for your contribution as well. To learn more about these plans, go to

Invest in your home

How about making your home more energy efficient (by investing in new Energy Star appliances, sealing the leaks or buying new energy efficient windows, doors, etc.?) or using the refund money to pay for small home improvements? This may be something to think about if you’re looking to sell your home, and a little paint, updated light fixtures, or new shrubs out front, for example, can make a big impact.

Make extra mortgage payments

One of the primary benefits to making extra mortgage payments is seeing the principal visibly reduced every month. Consider this: If you owe $200,000 @ 4.25% interest, then your monthly payment would be around $1,000. Paying an extra $200/month would save you about $50,000 in interest and the loan would be paid off almost 10 years earlier. Compelling, eh? Run your own numbers using Zillow’s mortgage calculator or download one of Zillow’s mortgage apps: the Zillow Mortgage Marketplace iPhone App or the  Zillow Mortgage Marketplace Android App.


About Maria Paulina Pagano

As a Realtor for the last twenty years and a Monmouth County resident for twenty-four years, I have accumulated extensive and invaluable knowledge of the Real Estate Market and Market Trends. Member of Ocean, Monmouth, & Middlesex MLS.
This entry was posted in Home Buying, Homeownership, Market Conditions, Monmouth County, Uncategorized. Bookmark the permalink.

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