What I Did With a $10,000 Refund

View of the Disney Magic. Taken at Cozumel, Yu...
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This year our taxes went extremely well. Every part of the process was, dare I say, enjoyable.

We found a new tax accountant. The most incredible thing was, she did our taxes while we were there. Normally as a small business it can take weeks to have my taxes completed. She actually did them while we were sitting there so I could ask questions, and note when she missed a deduction.

In the end, she told us we were receiving about $8,000 back. As a small business, we pay estimated taxes based on the previous year, and since we didn’t make as much last year, we paid in more than we needed to. We also had a new baby girl last year which helped.

In the end, our tax accountant called us back and said she had missed another deduction. She asked me if I was sitting down… we were actually getting a little over $10,000 back.

So what did we do with $10,000?

First – We imagined the possibilities. I let my imagination run wild with Disney Cruises, and a new car. We thought about finishing the basement and the attic. We imagined investing all of it. Or giving it to charity. Or bulking up our emergency fund. Or buying gutters.

Second – We did some research. How much would each of these cost? We priced out finishing the attic and basement. We priced out Disney Cruises. I looked at investments. This was the only way we could compare the value of what we were getting.

Third – We re-figured out our own finances. Since we are self employed we only know what the next 4-6 months will bring income wise. That is why we have 5 month emergency fund. I looked through all of the work we had for the summer which is our best time of year. We were doing well. The problem we usually have is that the summer income has to be so great that it can supplement our winters.

Fourth – We thought about how we would feel in 6 months. If we took a $5,000 Disney cruise, how would I feel a few months later? Would having an attic in the office really help our daily lives? How great would we feel with a new car in the driveway?

Finally – We made our decision. Here is the breakdown:

Attic Finished into a library/office – $1,500

Business Expenses – $2,000

Emergency Fund – $4,000

Monthly Fund – $2,500

Why those items?

We decided to finish the attic since it needed minimal work, and because that would change our lives daily. With more room to work and a place to have all of our books and equipment we would have a more enjoyable work day. I think investing in our office will have a huge return on investment, since our current office is cramped and hard to work in.

My husband and I each received $1,000 each for our businesses. When you have a business there is always more than you want to invest into it. Usually we reinvest some, but recently we have been wanting to be able to invest more. Even if we were given $1,000 fr personal use, I think we would have spent it on business items anyway!

We bulked up our emergency fund to a full 6 months worth of income. This helps us feel better about the winter situation and we have at least a year ahead even if we only had the work in front of us. Stability is a great friend!

Our monthly fund is what we use for our expenses each month. We have been wanting to increase our grocery budget to allow for more organics and fresh fruits each week. We increased our grocery budget. We are also going to get the gutters installed. All sorts of small things that don’t sound very exciting! It also pads the summer income so we have more when winter rolls around.

Conclusion

It’s really fun to dream, but in reality most of the things I would be happy about in six months were things that improved my daily life. I love vacations and we are still talking about going on one with the children very soon, but I like things that are tangible much more.

I think we had to go through this process in order to figure out what we wanted. Since a Disney Cruise was the first exciting idea we had, I could have taken the check and paid for one. But taking my time to figure out exactly what the cost/benefit for each item helped me realize what I truly wanted, and so in six months I won’t regret spending any of the money.

For me, it’s about making a decision both logically and with my heart so that even if everything goes wrong (ie the attic is too hot, or a pain, or whatever!) at least I know I made the right decision with the information I had.

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11 Responses to “What I Did With a $10,000 Refund”

  1. Money Funk

    I love letting the imagination run wild on ‘what to do with the money’. But you and your hubby made some great decisions. Its gotta be comforting to know you increased your emergency fund!
    .-= Money Funk´s last blog ..Sunday Brunch with Christine =-.

    Reply
    • Jaime

      It was a good thing we did what we did, since our dryer broke yesterday! I should update the post with the fact that we will be buying a new dryer too. :)

      Reply
  2. RainyDaySaver

    We also got a similarly large refund. I’ve earmarked $2,000 toward debt reduction (it will actually pay off our credit cards!) and $2,000 for badly-needed furniture for the living room (we have a couch, a too-small TV stand for our HDTV, and a coffee table being held together with duct tape). The other $6,000 went right into our savings.

    Disney would have been fun, but I would be sad to part with $5,000 that quickly!
    .-= RainyDaySaver´s last blog ..Cuts to Education and Teachers Salaries: Voting Day =-.

    Reply
    • Jaime

      Congrats on paying off the credit cards Nicole!

      It’s funny how when you have $10k, half of it for a cruise really doesn’t sound that bad. I think that was the hard part. Even if we spent half we would have still had $5,000 left! I love hearing how you made the same sort of decision with your refund.

      Oh and we got a wall mount for the HDTV on ebay for $30. Just wanted to let you know because it has been awesome. :)

      Reply
  3. Derek Sisterhen | Past Due Radio

    Awesome post, Jamie!

    What a methodical approach you guys took in your decision-making process. It’s tough to say no to a vacation when you have $10,000 sitting in your account, but once the sun tan wears off and the pictures aren’t looked at as frequently, would it have prepared you the best way possible for the remainder of the year?

    You don’t ever want to say, “How are we going to pay the light bill? Hey, remember when we were on the cruise – that was fun!”

    My guess is that with this kind of forethought, you guys will be taking a nice vacation before too long.

    Thanks for the post!
    .-= Derek Sisterhen | Past Due Radio´s last blog ..101 Past Due – Save Yourself! =-.

    Reply
    • Jaime

      Thanks Derek!
      For the past 4 years we have gone on a cruise every year. While I love to travel, I find when faced with the options I always choose against it. It’s funny because I’m trying to figure out why that is! I love travel! I’ll have to think about it more :)

      I just checked out your blog too. Just added it to my reader too. I do personal and business coaching locally, so it’s really nice to meet you! I’m looking forward to downloading your podcast too.

      Thanks for visiting!

      Reply
    • Jaime

      Thank you Barb! I’m probably someone who over thinks things mostly, but that is the exact reason why I do it. I want to be happy with my choice now and later. :)

      Nice to meet a fellow Yakezie member!

      Reply

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