3. Home Maintenance: "Since the home is generally one of the largest or largest asset of most people then investments into improvements can create significant increases in the overall resale value of the property," said Morris. "Whether these are cosmetic in nature or more significant in term of repairs the net result can and really should be a substantial return on investment." Morris added that painting is one of the most value added enhancements a homeowner can make and even a $500 investment can go a long way in that endeavor.
4. Paying Down High Interest Debt:
Recent regulations that require credit card companies to show debtors how much they're actually spending has gone a long way in helping people understand that high interest debt
can eat them alive. "At 29.95% the money saved in interest is tremendous," Morris said. "To put it into perspective, $1,500 at 29.95% means that you are going to save thousands in interest payments just by paying off that lump sum, even if it only represents a fraction of the outstanding debt."
5. Paying Down Student Loan Debt: It can seem that just about anyone who attended college in the past decade most likely still has some student loan debt. "One of the best moves you can make with your tax refund is to pay down your student loan debt. Interest rates on the debt will keep rising, and it's a guaranteed return Right now," said Robert Farrington, founder & editor at The College Investor. "The stock market is showing signs of a correction, so a safer bet is to focus on getting out of your student loan debt."
6. Roth IRA:
Retirement will be here before you know it and you want to be ready. Joseph D. Clemens, CFP and co-founder of Wisdom Wealth Strategies, said a Roth IRA
gives two advantages: "Roth principal contributions can be withdrawn tax-free, penalty free immediately, thus substituting as a quasi-emergency fund. By having access to principal without tax and penalty, the individual can save for retirement, while giving them a safety net in case of an emergency as well."
7. Traditional IRA: Of course, if you're going to invest in your retirement future and you need a tax deduction now, opening a traditional IRA is your route. "If they do not have a 401k or similar retirement plan at work, money that goes into a regular IRA becomes tax deductible, thereby using this year's tax refund to reduce next year's taxes. Sort of 'double-dipping' with taxes - a win-win situation," said John M. Scherer, CFP with Trinity Financial Planning.
8. Charitable Contribution: The benefits of donating to charity are many, including feeling good that you've made a contribution to a cause for which you care. There could be financial rewards as well. "I'd encourage people to donate their refunds to charity," said Steven Hirsch, CPA Cohen Greve & Company CPA, P.C. "It's a wonderful thing to do, and you may get an additional tax break for your donation."
9. Life Insurance:
If you've made all of the plans you need in life, you might think about making plans for your loved ones
. "The money grows tax deferred, and you can withdrawal it tax free," said financial advisor Gregory Cornelius. "In the event the owner passes on before it is needed, a much larger sum of money is given to their beneficiary, completely tax free. That money can be set up into trusts or foundations to last many generations, or go to charities."
10. Take a Trip: If you have to spend some of your refund, skip the big screen, said Simon Moore, chief investment officer at FutureAdvisor. He said a book he recently read contained a study that showed people who spent money on experiences rather than things were happier. A Bucket List trip or better yet: "Spend money on others rather than on yourself," he said. "For example, treat a friend to a special dinner rather than getting yourself a new pair of shoes."
--Written by Kerri Fivecoat-Campbell for MainStreet