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We got our tax refund information a couple of weeks back.  I spent some time coming up with some proposed allocations, and my wife was more than happy with what I came up with, so I thought I'd give a brief rundown on the categories which we're allocating this year.

The Three Sources of Our Refund

We get our refund from three different sources

  • Federal Refund – Self-explanatory
  • State Refund – Again, shouldn't require any detail
  • Side Income Allocation – When we make money from our side hustles, the sales of stock, the cashing in of savings bonds, or other areas where I know we'll pay taxes but there is no withholding, we set aside 25% in an earmarked fund within our money market accounts.  If we were ever in a position to have to pay estimated taxes, this would be the source, but for now, it's a nice way to get a ‘refund'….and earn interest on it along the way!

So, here are the categories for which we are distributing the money this year:

  • New Car – Eventually we'll get a new car (new to us, anyways), so we stick a few hundred bucks toward that
  • Car / Camper Repairs – I like to have $1,000 set aside to cover any repairs.  My car needed about $1,300 in repairs last year, and I project that we need new tires on our camper this year, so we're putting a few hundred bucks into this to bring it close to ‘fully' funded.
  • Roof Payback – As I alluded to above, our money market fund is broken down (via a spreadsheet) into multiple allocations.  One of those was the roof that we got installed last year.  As it cost about $2,000 more than I'd budgeted, we essentially ran a negative balance, which is fine because there are always other funds running positive balances.  We are about $600 away from fully paying that off, so we'll do so with a portion of our refund.
  • General Home Fund – Everything for the ‘around the house' fund went to re-stock the roof fund, so not only do I want to bring the balance to $0, but start adding money to it so we can do improvements or start saving toward whatever major project comes next (hopefully in a few years)
  • New Mantel – Normally, I don't get very specific, but this year, I decided to get somewhat detailed. My wife has been asking to have a mantel installed above our fireplace since we moved in.  Now that it's been seven years, I figure I can't use the ‘maybe next year' brush-off too much longer, so I'm specifically putting aside a small sum toward this.
  • Kids Rooms – Our youngest will be ready to move into a big girl room, and we're looking at doing some re-shuffling of rooms.  This would require painting three rooms, new bedding, some new draperies and the like.  I am setting aside several hundred dollars to help offset this work.
  • Preschool – Our oldest will be heading to kindergarten this fall, but our youngest will have two years.  We'll set aside a few hundred bucks to cover the cost of preschool.mb-201403stacks
  • Kids Activities – This is the one that sold my wife.  As our kids are getting older, they are getting more interested in things that have costs associated (e.g. T-ball for my son, swimming lessons for both, dance lessons for my daughter), and rather then complain about the costs each time one of these comes up, I wanted to set some money aside.
  • Gifts – We fund our Christmas fund, and also a ‘Month of May' fund throughout the year so that when the gift needs arise (May has multiple birthdays and Mother's Day, so I started saving for this a few years ago to spread out the cost), it's already paid for.  Just a token amount to each fund.
  • Maintenance – Just last week, I referenced a few items that would need some routine work done this year.  $100 each toward getting the snowblower, lawn mower, and HVAC system looked at will help cover these costs.
  • Anniversary Trip – My wife and I try to take a small in-state trip for our anniversary every two years, and I set aside a couple hundred dollars to cover some of the costs.
  • Fun Money – My wife and I each get a little bit of money to spend as we want.  With kids at the age of 4 and 2, I expect that it won't be long before we have to throw a little bit their way, huh?

So, there you have it.  As you can see, it's nothing exciting, but it all helps to fund expenses that we have that I don't really include in our monthly budget.

What are you doing with your refund check(s) this year?