Ways We’ve Used Our Tax Return In The Past

Some of my coworkers have already done their taxes! Man, they’re on the ball! I usually do ours well before the deadline (we always use TurboTax), but now I’m feeling inspired to get on it. There’s really no reason to wait. I think I have all of the paperwork that I need.

Anyways, around the water cooler (we don’t really have a water cooler), we’ve been talking about how we want to use our tax returns, if we get one. So I’ve been thinking back to what we’ve done in the past. We don’t usually get a huge return. We’re married, no kids, average-low income… But we’ve gotten something back every year since we’ve been together.

You’ll see about 50 articles come out in the next few months saying that you should invest it all. And while that is a very smart idea because of compound interest and all, we’ve always had other things that needed to happen before we invest. We always use a little of our tax return for something fun, and most of it for something practical. So here it is:

Ways We’ve Used Our Tax Return In The Past

New House Projects

When we knew that we would be purchasing our first house in the coming summer, and that said house would probably need some TLC due to our small budget, we saved our tax return to help fix up our new home. We ended up needing all kinds of things like a step ladder, paint, paintbrushes and rollers, yard tools… We were glad to have some money set aside to be able to fix a few things and put some fresh paint on the walls (and then repaint again because of the lime green living room incident).

If you know you’ll be buying a new home soon, it’s smart to save up a little extra. Your down payment might drain your bank account, but you’ll want to have some cash to paint and tweak things.

Kitchen Update

After almost a year with blue counter tops, nowhere near enough storage space, and no dishwasher, we decided to give our kitchen a little help. We spent under $1000 on a few new cabinets, painting all of the cabinets to match, non-blue counter tops, and a dishwasher. That tax return got stretched and stretched, but I love our kitchen now!

Emergency Fund

Up until a year ago, our emergency fund has been a never ending work in progress. I was usually lucky if I had $20 bucks to add to it after our bills and expenses. And when your goal is to have six months of expenses saved up, it’s slow-going at $20 a month! We’ve used a portion of our tax return for many years to give a bigger boost to our emergency fund. It’s so nice to have that peace of mind. Money well spent saved.

Fun Money

When you’re on a super tight budget, it’s so nice to be able to splurge on a treat here and there. Every year we’ve used a bit of our tax return on something fun. I don’t even remember what most of these things were, but I know it was fun and special for us.

Last year we used a chunk of our tax return for a Summer Fun Fund. There are so many awesome things to do in the summer, and in Michigan you really want to take advantage of the warmer months. Of course, all of these things cost at least the gas money to get somewhere if not more. So last year we had a fund for doing special summer things and it was the best! We’ve already decided that if we get a tax return this year, some of it will go to a new Summer Fun Fund. Last year we went to the beach (the fund paid for gas and parking fees), went out for ice cream a bunch, had a day trip to the water park, and saw some big summer movies in the theater, among other things. We might have been able to do a few of these things within our normal budget, but we really had so much fun and enjoyed the summer with a little extra fun money!

It’s all about Balance

We don’t have any debts except for our house, so we try to use any extra money, like a tax return, for something responsible (like adding value to our home or saving up for emergencies) and for something fun.

I think the important thing is to spend it on purpose. Don’t just let your tax return get dwindled away on random stuff here and there. Make a plan for it so that it gets used where it is needed most.

⇒How have you spent your tax return in the past? What are your plans if you get one this year?

This post is linked up to the Penny Pinching Party

This post is linked up to Frugal Friday