Our taxes came back from the accountant and I was pleasantly surprised. I had estimated our federal return using a couple of the online calculators. I was close but we actually came away with about $200 more than I’d thought. Our federal return goes as a straight percentage allocated to the following:
- Debt Payoff – 25% – We are working to be all-but-mortgage-debt-free by the end of 2012 and this will help us take a big step towards that goal
- Vacation Fund – 10% – We like to go on vacation now and then, and this will help pay for our trips
- Home Repairs / Renovations – 25% – Our house is just a touch over ten years old, so I expect that bigger ticket repairs will start piling on in the next few years, such as roof, windows, driveway, furnace, water heater, etc. and this will help defray some of those costs
- Car Repair – 5% – This is to defray unexpected car repairs, insurance deductibles, or big ticket repairs like brakes or tires
- New/Used Car Fund – 25% – We don’t have any car loans and I’d like to keep it that way. We purchased a used car last year, so we should be set for a few years, but this will allow us to start re-building this fund since it was depleted with our recent purchase.
- Family Expenses – 10% – We had built a nice fund when we had Baby Beagle so that we were able to pay for big ticket items that we didn’t receive as shower gifts. We have future plans (nothing imminent, I promise) to continue to grow our family, so this will help defray some of those costs for when the time comes.
As you can see, our federal return goes largely towards paying off things that we haven’t purchased yet. This is done intentionally for the simple reason that, as we work towards our goal of paying off debt, we also have a goal not to take on any new debt if at all possible. Saving money for expenses we know are coming will help us maintain this goal.
Our state refund was also a couple hundred dollars bigger than we had expected. With our income falling from 2008 to 2009 due to my wife working only part of the year, we qualified for a bit of a refund on our property tax expenses that I hadn’t been anticipating.
Our allocation of this will be for more current items:
- Debt Payoff – 25% – It’s our standard to use 25% of cash inflows to pay down debt and we plan on doing the same with this.
- Carpet Cleaning – We would like to get our carpets cleaned annually and it will be time in the spring
- Lawn Mower Repair – My lawn mower is a couple of years old and I’d like to have a general repair done. We have a lot of nuts and twigs that fall on our grass, so I’m sure that the blades need to be sharpened, and there’s a local place that does a tremendous job with yard equipment.
- Furnace Tune-Up – I’m embarrassed to say that we haven’t yet had our furnace cleaned and tuned up, and I know that most guidelines for reducing heating/cooling costs tell you that this is something you should do every year or two.
- Tree Trimming – This is something that, with many trees on our yard and near our house, needs to be done every two to three years.
We may not get to everything from the state return, but we should be able to get a big chunk of our list done, and all of the items are things that my wife and I agree need to be done to keep our house and yard in the condition that we desire.
Now, we just have to wait for our returns!