Smart ways to spend your tax refund
It’s tempting to regard your tax refund as a mid-year bonus and blow the lot. Not so fast! You’ve worked hard for that money, why make that money work hard for you?
1. Start a Rainy Day Fund
It’s a relief to know you have spare cash on hand to pay for any of the unexpected bills or emergencies that pop up during the year. Keep the funds in a separate savings account with no debit card so you have to work to spend it. There are plenty of high interest savings accounts where your money can grow for when you need it most.
2. Spend It!
But be sensible. Now is a good time to purchase large household items, especially when you can take advantage of End-Of-Financial-Year sales. Buying appliances and other essentials now means you won’t need to put them on a credit card or expensive in-store finance later on. You could upgrade the washing machine, fit new tyres on the car or get any dental work you’ve been putting off done. You could also upgrade household items for long-term savings, such as insulation (reduces heating and cooling costs) or a solar hot water system.
3. Pay Off Debt
Consider making a large payment on your credit cards or loan. You’ll save much more money than you deposit on interest in the long run – pick the debt that you find the hardest to pay back.
4. Boost Your Super
Even if retirement is a long way off, making a contribution now can make a big difference to your super balance in the future. Depending on your circumstances you may also be eligible for a contribution from the Government, boosting your super even further. Check your Super fund’s website, or call, for more information.
5. Prepay a Holiday
Depending on the amount of your return, you could use the funds to put a deposit down a holiday or cruise for later in the year. You’ll have then have plenty of time to save up spending money.