Mortgage, Taxes

Plan For Our Tax Refund

I have almost finished working on our 2010 tax returns.  We will owe a very small amount in state taxes, but it looks like we’ll get a refund (think hundreds, not thousands) from Uncle Sam.

Instead of using the money to go on a vacation, or to make a down-payment on a new car, or for buying a big screen television, every penny will go towards paying down our mortgage.  This week’s articles about being consumer-debt free have motivated me to get even-more-serious about paying off our mortgage.  Instead of spending the refund on more stuff – my plan is to put it to work doing what I do best – pay off debt.

Our zero-based budget is based on fixed take-home pay and irregular income from my side-business.  The refund will be directly deposited into our ING Direct checking account.  This transaction will be entered into the awesome You Need a Budget software that we use for creating our budget.  (By the way, version 3.0 of the YNAB software is amazing – and right now you can download it and try it out – free for 7 days.)

Once the refund reaches our checking account, I will schedule a payment to our mortgage company.  This single extra payment will shave 2 months off of the length of our mortgage!  Not bad, especially considering the fact that this refund was somewhat unexpected.

1 thought on “Plan For Our Tax Refund

  1. I think whenever you can put a certain amount of money back into something that will help you it is a great plan. Your are right, a new car or TV is not going to help your financial situation in any way.

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