3 Ways to Get the Most From Your Tax Refund
If you’re like most Americans, you’ve probably received your $2,700 tax refund by now. The average U.S. citizen overpaid his taxes by that much during 2008, the Internal Revenue Service reports.
How should you spend your personal stimulus? A recent Associated Press-GfK poll found that 54 percent of those receiving refunds would use at least a portion of the proceeds to pay bills. And not just credit cards — utility and housing bills were also part of the survey.
We hope you aren’t among the poor souls who need stimulus to keep the lights on. If you are, this post may help. If not, strap in, here are three ideas for getting the most from your $2,700.
CC Image Courtesy of TheTruthAbout
Pay down debt
There’s never a bad time to pay down debt but now may be the best time in years. Mortgage rates have drifted below 5 percent and the average 1-year certificate of deposit pays just 2.3 percent, Bankrate.com reports. By contrast, the average credit card charges more than 11 percent in annual interest, according to the LowCards.com Credit Card Index. Do the math. Earn 11 percent paying off debt, or earn 2 percent on a CD; which would you rather do?
Take a vacation
Lately, a luxury resort nestled in the Rockies has been sending me email after email boasting of its best deals. I’m not alone. Airlines, hoteliers and tourist boards are actively promoting in-season offers at off-season prices.
For example, the Montreal Jazz Festival, celebrating its 30th year, will host many of its 650 performances on free outdoor stages and two-night hotel packages begin at $144 a night. Not bad for an internationally known event.
What’s more, all six of the major U.S legacy airlines have the halved the number of miles needed to qualify for “elite” status and the benefits that plateau confers. The message? Spend your money with us now and we’ll reward you handsomely on your next vacation.
Improve your home or apartment
As with most businesses, contractors are hurting. New home construction fell 11 percent in March, according to government data released recently.
Home improvement is also trending south. A new study from the Harvard University’s Joint Center for Housing Studies projects that consumer spending on home improvement will decline by 12 percent this year.
What does all this mean for you, holder of a fat check from Uncle Sam? Deals. You’re in a position to negotiate for the very best bargains out there for remodeling your kitchen, fixing the porch, or adding to the back deck. Get bids from at least three local, licensed contractors with verifiable references and get to work.
Renters, too, can get a return on their rebate. Tell your landlord you’ll spring for a new paint job or a bathroom touch-up in exchange for knocking a few dollars off your monthly tab. Not only will your apartment look better but your wallet will look fatter.
When it comes to personal finance, isn’t that the bottom line?
Tags: stimulus package, tax refunds | Categories: Quicken Tips, Taxes |
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