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Maximizing your tax refund

Maximizing your tax refund

January.  The month of the year where tax documents start trickling in.  Receipts from charitable contributions, how much interest you made this year on your savings account, and of course the most important one: your W-2.

Once you’ve received all these documents then it’s time to prepare your return.  Often your withholdings that you’ve been paying over the year exceed what you owe the IRS and you hear those magical words from the person doing your taxes that you’ve been looking forward to all year:

“You’re getting a refund.”

So, this leaves you with a problem.  A good problem, so maybe a better thing to call it is a decision.  You have an opportunity!  You can decide what to do with this lump sum of money that you are getting.

Here’s some things you could do:

  • New furniture
  • Pool table
  • Take a vacation
  • New wardrobe

But please allow me to make a case for investing your money where it will have a lasting impact.  Invest your money where it impacts your day to day life and also you financial future.  Stop renting and buy a home using your refund as your down payment.

Why does buying a house make so much darn sense?

  • Your payment will go down or you’ll have a bigger living space (maybe both).  In West Michigan it costs approximately 40% less per month to buy than to rent the same house.
  • When you pay rent, your payment goes to paying off your landlord’s mortgage.  When you buy your own home every month a portion of your payment is paying off your principal.  Even if your home never goes up in value, this still puts you in a much better financial position with every payment you make.
  • Besides financial reasons, it’s also such a point of pride.  You are now a homeowner.  That has a great ring, doesn’t it?  When you want to paint a room pink, you don’t need to ask anyone or worry about getting your security deposit back.  You just do it.  Because it is yours.

So, maybe you’re thinking that what you have isn’t 20% of the house you would want.  Well, I have good news!  There are programs that allow you to buy a house for as little as 1% down.  

Call us at (616) 363-7788 for a personalized consultation on what’s involved with buying a home and what makes the most sense for you.  We are here to help!

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