Whether you already filed your taxes or are racing to beat the deadline, you may be heartened to know that as of last month, the average tax refund for Americans has climbed to $3,068. It’s no wonder this time of year is one for big spending, with many tax refunds leading to new cars, electronic devices, or even a new home. You want each of these important purchases to serve you well through multiple tax seasons – so for each of those categories, here are the top things to keep in mind when parting ways with your hard-earned tax refund.
If you are one of the countless Americans driving a car that's no longer reliable, you might consider using your tax refund to make a reasonable down payment on a new (or at least newer) car. Besides reading up on our top three tips for car buyers before visiting a dealership, you should also consider the benefits of a service contract (or extended warranty) for your new purchase.
A recent study of 2,000 American car owners found that half of them don’t feel confident changing their own oil and more than 40 percent can’t even identify their car’s engine. What’s worse: 2 in 5 wouldn’t take their car to a mechanic for fear they won’t be able to afford all the repairs they need. A service contract is the best solution – a little planned expense upfront or month-to-month assures coverage when things inevitably start to break down.
Much like the way custom mats, seat covers, and other accessories make the car your own, a service contract can be unique to you – you can choose what to cover, from tires and oil changes to the transmission, or even bumper-to-bumper coverage. While most new cars come with a built-in warranty for a certain number of miles, not all manufacturer warranties protect you against the full spectrum of problems that could arise. A service contract will protect your wallet, provide peace of mind, and help you keep your car running smoothly for years to come.
Springtime is game-on for technology retailers. In April, many retailers get ready to stock the newest items by holding clearance sales to clear their shelves. Your tax refund is an opportunity to finally treat yourself to that high-tech device you’ve had your eye on, from a cellphone or smartwatch to a computer or television.
We use our devices to work, play, travel, and connect with family and friends across the globe. According to Pew Research, more than three-quarters of Americans go online every day, including 43% who do so several times a day. Americans spend more than 11 hours per day watching, listening, or otherwise consuming media. When you constantly rely on devices for work and play, having hardware and software you can count on is essential.
The most desired tech gadgets aren’t cheap. In North America, the average price for a new phone is $567, and upgrade cycles for phones average 32 months across the U.S. While some scoff at the idea of using a three-year-old device, a service contract can help you meet your needs for a longer period of time, giving you the most bang for your buck. With so much time and money spent on your gadgets, it’s well worth having a service contract that can cover everything from cracked screens to faulty hardware.
With Americans paying an average of $1,400 a month for rent, many are looking to buy a permanent home – and a tax refund can serve as a boost to that all-important down payment. Deciding to buy a home is a huge decision, and a service contract ensures that important and expensive amenities stay in tip-top shape. It won’t alleviate all of the stress that comes with the buying process, but having a service contract for your new home can bring peace of mind while saving you money.
And when it comes time to sell your home, having a home warranty can be what turns a prospect into a committed buyer. Many buyers will ask sellers to include a home warranty because it protects the home from unexpected appliance failures, broken heating and cooling systems, and a plethora of other possible concerns. Buyers recognize that a home warranty adds value, and it is a relatively inexpensive negotiation tool for sellers.
Even if you’re perfectly happy to stay in the house you already own, a home warranty is a smart investment in your future. As you upgrade your living situation in different ways – by updating bathrooms, installing new fencing and landscaping, or giving the house a fresh coat of paint – adding a service contract will give you years-long savings.
No matter how you choose to spend your tax refund, buying a service contract to cover a new purchase is a smart move. Invest now and save later by covering your tax refund purchases with a service contract.