Before you go on a shopping spree, book a holiday or put it all on red take a moment to consider where your tax refund money would best be placed. Remember it’s your money and the tax department has been using it interest free. In Australia 82% of taxpayers are likely to get a refund with the average refund being around $2,200; let’s give it a purpose.
Put it towards relieving some stress from your life. If you have any outstanding bills this is a good opportunity to pay them off. Credit cards are high interest and bank profits are booming so take advantage of paying off your credit card or buying some shares. Here are some other ideas:
- Boost your Super – Think of your retirement, making a non-concessional contribution can boost your super and make your retirement days brighter.
- Put it in your Emergency fund – If you don’t already have an emergency fund it’s time to start one. Having three to six months aside for unexpected expenses will relieve a great deal of stress when the time comes.
- Put it in a Term Deposit – Invest your money in a term deposit. Save for a big purchase; a car or holiday take a while to save for and putting a chunk of money aside will make a big difference and see you closer to your goal.
- Put it into your mortgage offset account – this will reduce the amount of interest you pay and assist in paying off your mortgage faster.
- Spend it on something you need – We’ve had some chilly mornings so if you don’t have a nice warm Winter coat take the opportunity to invest in one. Spending your return on a new appliance or car service would also provide you with peace of mind or increased comfort.
- House improvements – Anything that adds value to your house is a worthwhile investment. Take the opportunity to add a fresh coat of paint, update those taps or re-tile.
- Do a course – invest in yourself and do the course you’ve always wanted to do or increase your skills to give you a better opportunity for promotion. If you do a course for work you will be able to claim it on your next tax return!
- Buy insurance – Put it into life insurance and TPD to protect your most important assets; yourself and your family.
- Donate to a charitable cause – There are many worthy causes, choose something that is close to you and help make a difference.
With a few good ideas under your belt cancel that giant party you were going to have and put your tax refund to good use and improve your financial situation. Careful money management will set you up for a prosperous future.