Author Topic: What to do w/ tax refund  (Read 867 times)


  • Handlebar Stache
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What to do w/ tax refund
« on: April 13, 2019, 12:08:20 PM »
It's been a while since I've had a facepunch, so I'll roll this out here and see how it goes.

I'm working on our taxes and it looks like we'll get a $10k tax refund. Sweet.  (Yes, we will need to adjust some things with our withholding.)

Now. What shall we do with the windfall?
1) Save for kids' college (oldest will be out of HS in 4 years)
2) Put into general investing (basically same as #1, it will go in our taxable account for later use)
3) Replace some 50-year-old windows on our house. They're old. They're unattractive. They're inefficient.
4) Hire professional to spruce up a half-bath rather than DIY.
5) Pay down the mortgage (we're at a principal balance of about $36k). I have been keen on paying the mortgage off, but it won't take long for this to go away anyway. I can see the light at the end of the tunnel.

Note, our general finances are in good shape. We have kids' college coming up, and we want to grow our 'stache so my husband can retire early.



  • Handlebar Stache
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Re: What to do w/ tax refund
« Reply #1 on: April 13, 2019, 12:25:59 PM »
Were you planning to replace the windows even before you knew you'd be getting a big refund?  If so, then I don't see a problem with going ahead.  I'm assuming it would save you money on utilities to have more efficient windows - do an ROI calculation based on expected savings, if you haven't already.  If you're only now having this idea now that you're getting the money, then don't do it.

Otherwise, you can't go wrong with investing according to your regular allocation, whether it be for college or retirement.  Don't pay down the mortgage with this money, you're better off investing and paying the mortgage on schedule (assuming you're in the US with a standard mortgage).


  • Magnum Stache
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Re: What to do w/ tax refund
« Reply #2 on: April 13, 2019, 12:38:07 PM »
I'd do the windows as it'll give you positive return on your energy bill and it'll give you more equity/value in your house for when/if you sell it. 

Otherwise I'd stick it into a taxable account and let it ride.  Windfalls like this are great to drop in because they are unexpected and can really bump up your savings rate for the year. 

I'm generally not a fan of 529's for college - what if your kid gets a scholarship or for some reason doesn't need the $$?  Then it's stuck there and really difficult to access.  Better, IMO is to just invest it and know that you'll pay for college out of the general investing fund. 


  • Magnum Stache
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Re: What to do w/ tax refund
« Reply #3 on: April 13, 2019, 12:54:07 PM »
According to the radio you should clearly buy new tires. Or put a down payment on a new used car.

But really, this money is no different than any other money just because it comes in one big lump. That's a behavioral finance tick that can get you to spend on things you shouldn't, so what is your current priority for any money you earn?


  • Handlebar Stache
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Re: What to do w/ tax refund
« Reply #4 on: April 13, 2019, 01:01:32 PM »
Cars are paid for, in good shape with good tires. :)

I have been wanting to do the windows for years, but it's a low-priority item and we've always gotten along with them and prioritized toward other things.  I think that windows would be nice for the energy savings (they are very leaky) and also the aesthetics. I think we'd enjoy them. So we'll probably do that and move it up the to-do list.  However, I'll sleep on it for a couple weeks before deciding.  I like investing too!  We'll be in this house probably another 10 years at least.  I don't think the energy savings will pay for the windows quickly at all... but I could be wrong.

Generally, we are just bulking out our savings.  Our home could use new siding too, (50 year old aluminum) but I think we'll phase it out and do the windows first, siding later on.  I can make a case to do the windows because they work, but they're not working well.  I mean, we can live with them, but it's an opportunity to make a substantial improvement. Or, I could save the money and do windows+siding together later on.
« Last Edit: April 13, 2019, 01:07:06 PM by KBecks »

I'm a red panda

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Re: What to do w/ tax refund
« Reply #5 on: April 13, 2019, 02:55:28 PM »
What do you do with your paycheck? This was money that should have been in that.

Stick to what your priorities we're before a "windfall"


  • Senior Mustachian
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Re: What to do w/ tax refund
« Reply #6 on: April 13, 2019, 07:28:52 PM »
Where are you relative to the generic Investment Order?