Tax refund? Invest in your home

When you get your refund from Uncle Sam, consider using it to fund a home improvement. As your biggest asset, your home is a worthy place to invest your extra dollars.

Money laundering is something you want to stay away from, but investing money in your laundry is a good idea. A new washing machine will pay off immediately in reduced energy bills, as much as $135 a year. In addition, there are often rebates available from the manufacturer, the utility company or state governments. A high-efficiency washer will cost between $700 and $900, making it a good investment for a $1,000 tax refund.

You could also use your windfall to help make your mortgage disappear. Even if you have a 30-year mortgage, applying small amounts of extra money can do a lot to pay it off early, saving thousands of dollars in interest. Paying an extra $1,200 a year on a 6% fixed-rate, 30-year mortgage of $250,000 would save you $52,000 over the life of the loan and pay the mortgage off 4 years early. Use your tax rebate to make an extra payment, and you will be moving closer to actually owning your own home.

Click here to use our Mortgage Calculator to see what your savings might be. For more ideas about ways to invest a $1,000 tax refund, click here.

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