What should you do with your tax refund?

If you paid more taxes last year than you owed, you will be getting a refund. Sometimes it’s a little and sometimes it’s a lot. What should you do with this money? Is there anything you can do to help your lawn care business grow from it? That’s a question a member of the Gopher Lawn Care Business Forum asked.

He wrote “I am receiving $1,380.80 in income tax return this year. What should I do with it? Here are two options I am considering.


Option 1

Get myself a lawn vacuum to speed up my crazy cleanup calls that I am currently having. The unit sells for $1,499.95 so it would almost be payed off. I could also finance this machine but I don’t want another loan on myself.

or

Option 2

I would upgrade my cell phone to improve the communication of my lawn care business. Currently, my phone is with another subscriber and I would have to pay the cancellation fee since I have 1 year left which is $240. I can get a blackberry for $19.99 the phone only and $50/month for a decent plan. I would also use the rest of the income tax money to pay off credit card/bills I have.

So what should I do? I am leaning towards option #1.”

One lawn care business owner suggested “if you spend it on your vacuum, you need to consider how long it would take you to recover the investment. The improved speed it gives you to perform the work should allow you to get the jobs done faster but would that be enough to justify purchasing it?

I would personally use it to reduce my debt unless I could recover the machine investment in like 1 month and then I could do #2 on the list with that extra cash.”

Another lawn care business owner said “I win a lot of business by having a Blackberry. All my emails come to it and I respond right away. I email pictures to clients of my current job progress which they may then show to others, which has brought in business. So in short it pays for itself.

Based on the time of the year, I probably would not invest in a leaf collector now. If you want to speed things up buy a smart sweeper by Agri Fab, you could use it for a season. It will run you around $350.00 and if you decide to sell it, you will get $250++. It will pay for itself very quick if you already have a tractor to pull it with. Use the rest of the cash as working capital or what other services could you offer that you could invest in.”

I like the idea of paying off debt especially when the interest level is high. But the downside is that unless you can keep to a budget, you will quickly increase that credit card debt right back up again and all that money will be gone.

Buying equipment tends to be a crap shoot at times if it’s not something you are going to be using daily.

Instead, why not bank as much of that money as possible. Get into the habit of saving money. Get used to having money in your bank account. Rent any equipment as needed and schedule similar jobs that need such equipment close together so you can get a bunch done as quickly as possible.

If a new cell phone with added features will help improve your communication and land you more customers, go with that too.

How are you planning on spending your income tax refund? Tell us on the Gopher Lawn Care Business Forum.

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