Although these may be absolutely fine choices for some (it’s called retail therapy for a reason), spending your refund wisely could have a greater payoff—literally. Opting for things like money-savers and pre-paid plans could help cut down on costs year-round.
Here, smart-shopping expert Trae Bodge shares seven sound strategies for spending your latest tax return in ways that make those dollars go even further.
1. Pay Down Your Debt
A smart use for your extra cash is to make a bulk payment toward the principal of any outstanding loans you may have, says Bodge. “This can save a lot on interest down the road,” she explains. “Anything from student loans to credit card debt to a mortgage could be a great place to start.”
2. Pre-Pay Insurance
Some insurance companies, like GEICO, offer savings if you pay in-full versus paying monthly. With a newly cashed refund check, it’s as easy as paying the full premium by the policy-effective date to lock in the rate. The best part? You won’t have to worry about missing a payment or any installment charges down the line.
3. Smart Outlets
Nearly one quarter of all residential energy consumption occurs through electronics in idle power mode, according to one study. Investing in smart outlets that connect to a smart device or have a simple timer function to shut off automatically will help save on electricity costs, says Bodge.
4. Buy In Bulk
Many fitness studios and salons offer savings for buying classes or services like manicures and massages in bulk, says Bodge. “Unlimited monthly passes are also worth investigating, depending on how many times you attend or typically use the service,” she adds.
5. Store Membership (So You Can Keep Buying In Bulk)
If there are certain household items that you buy frequently, like paper towels, vitamins and groceries, Bodge says a wholesale-club membership could be a good investment to help you save on everyday items. Just make sure to shop with a list, so those huge carts and huge deals on everything—including jewelry, clothing, electronics and furniture—don’t result in impulsive overspending.
6. Programmable Thermostat
Heating and cooling account for about 48 percent of the energy use in a typical U.S. home, making them the largest energy expenses for most households, according to the U.S. Department of Energy. Bodge recommends installing a programmable thermostat so you can set timers for your heat and/or cooling—including adjusting the temperature at night or when no one is home during the day—to cut back on wasted energy.
7. Low-Flow Shower Heads
Low-flow shower heads market themselves as using as little as half the water of a conventional shower head, which could translate to big savings in water-heating bills over the course of a year. “While you’re at it, encourage family members to limit the length of their showers, which will help save even more,” says Bodge.
Read More: 5 Financial Resolutions To Make This Year
By Nicole Cherie Jones