American Dream

The 6 Best Home Investments for Your Tax Refund Money

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Tax refund checks are on their way, and if you’re a homeowner thinking about what to do with these extra funds, now may be the time to make some home improvements. The best home investments will pay for themselves quickly, and will save you money in the future. Whether your tax refund is a few hundred or a few thousand dollars, here are six ways to invest in your home today in order to save money tomorrow.

Low-Flow Shower Heads

A fast, easy, and inexpensive home improvement project for homeowners looking to cut costs is to install a low-flow shower head. These easy-to-install bathroom features will not only decrease your family’s water consumption, but will also shave about $145 per year off your electricity bill, according to Energy Star. You can pick up an inexpensive low-flow shower head at your local home improvement store.

Programmable Thermostat

One of the best ways to save money during the expensive heating and cooling seasons is to invest in a programmable thermostat. These handy devices let you program comfortable temperature settings on a preset schedule, which can be used to reduce temperatures at night or when no one is home. This saves energy and money on heating and air conditioning costs. According to the Department of Energy, if you reduce temperature settings by at least 10 to 15 degrees for eight hours daily, you could save anywhere from 5 to 15 percent of your heating costs per year.

Weatherstripping and Caulking

If you’re a homeowner who’s short on time, installing weatherstripping and caulking, which could take as little as two hours, is a great investment. With a price tag of no more than $30, the U.S. Department of Energy states that you could see an energy savings of between 5 and 10 percent for each window with weatherstripping or caulking.

Tankless Water Heater

Though they’re more expensive to purchase than a traditional water heater, tankless water heaters are also between 24 and 34 percent more efficient. These on-demand water heaters only produce hot water when needed, which eliminates the energy used to keep a tank of water continuously hot. An added bonus: They require less space than the typical water heater.

Adding Insulation

Investing in additional insulation is one of the quickest ways homeowners can save money. This reduces the energy required to heat and cool your house. Before rushing out to buy insulation, arrange for an energy audit of your home to identify the best areas to add insulation. Do your research on types of insulation that are available, and look into the incentives in your area to see if you can qualify for a rebate or grant for insulation installation. To find out just how much money you could save, check out the Department of Energy’s handy Zip Code Insulation Program calculator.

New Doors and Windows

Replacing your doors and windows can be expensive, but this home improvement project is worth every penny. A newly installed steel entry door has an average cost of $1,230, but you can recoup a good amount of that investment depending on where you live. For a typical home, replacing single-pane windows with Energy Star windows can save from $126 to $426 annually, making this another good investment.

The best home investments are those that help homeowners save money year after year. If this year’s tax refund isn’t enough to pay for all of these upgrades, look for ways to budget for the remainder. And if you’re lucky enough to live in one of the states that doesn’t collect income tax, you’ll have extra money to invest in money-saving home improvements all year long.

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Sarita Harbour is a freelance writer specializing in personal finance, entrepreneurship, and green living. As a former financial adviser with over a decade of banking experience, she has been writing for American and Canadian digital audiences for the past three years. Her work is featured regularly on Capital One's Spark Business IQ, Forbes, and The Lending Tree, and also appears on sites such as Fox News, Yahoo! Homes, Bob Vila, Equifax Insights for Small Business, and Intuit Small Business. Sarita graduated from the University of Guelph where she studied Psychology and Computer Science, and she holds the Personal Financial Planning designation from the Institute of Canadian Bankers. Sarita is also a member of the Professional Writers Association of Canada. She lives with her family in an off-the-grid cabin outside of Yellowknife, NWT.