Five smart ways to handle your tax refund
If you know you are due a tax refund at the end of the financial year, you might have already decided on what you will splurge your extra cash on. Here are our 5 smart ways to use your tax rebate:
- Pay down / pay off your debt
This may not be the most glamorous way to spend that refund but it will certainly save you money you would otherwise spend on interest. Depending on how much debt you have, you may not be able to pay it all off but every little bit counts. If your debts total more than $8,000 and you’re paying off multiple loans or credit cards, you may want to apply for our debt management service. If you are eligible, it replaces all your debts with just one loan which makes it easier to pay and may save you money on the interest
The reason savings is often the go to when you are given extra money is because it’s so important. According to data from Roy Morgan, “almost one in five Australians would struggle to come up with $1,000 to cover an emergency expense.” Having a little extra in the bank can literally be a life saver
- Treat yourself
This is your money and if you can’t stomach the idea of putting it all into savings then you should certainly spend some of it. Before you go out and make it rain, think of something(s) you really need and start with that. If you are looking to do some home renovations, now is a good time to get started. This is not only a nice way to improve the space where you spend so much of your time, but it could also add value to your property when it comes time to sell. If you don’t own your home or are still a ways away from affording a home renovation, there are still other ways to spend the money. Maybe it’s a good winter coat or a pair of sunnies - whatever it may be, make sure it’s not something that will just be a one-time use
- Spend it on something that will make you more money
Do you have a hobby that could also make you money? Are you a step away from a pay rise? If there are small things you can invest your money in – such as a diploma - put your tax rebate towards it to reap the benefits in the long term
- Add to your Super
Whether retirement is near or far, adding to your Super with every tax refund is a good habit to get into and will definitely benefit you when the time comes. It doesn’t have to be that much but ensuring you add a little each year will make a much larger impact on your future than a night out now
These five tax tips for handling your refund are just some of the ways to help your bank account balance and financial future. You may choose to do all of them or just a couple. Different things will work for different people but the ultimate message is that you shouldn’t spend your refund all in one place. Make sure your tax rebate works for you.
If you have been dreading submitting your taxes check out our helpful tax tips to get you started.