Tax season is well and truly upon us, which means that your returns are also just around the corner! Now that you have some extra money to burn, it’s time to get your priorities in order and sort out your finances. Unfortunately, many a time Australians (and everyone else around the world) will splurge on something at the beginning of the new financial year, ridding themselves of their tax return. Just because you get a $300 return does not mean you need to go on a $5,000 overseas holiday. This extra boost in your bank account should be put towards something that will benefit you, so we’ve made a list of our top 6 to help with your personal wealth, and overall happiness.
1. Put towards your debt
So, say you’ve had a vehicle loan for the last 2.5 years, and the term is almost up. Why not direct your tax return straight to your debts and in the end, pay it off faster? Make sure to double-check if you are charged fees for early payout, but bonus payments are a good way to allow for future treats, because paying off a loan faster is surely a win for you! If it isn’t finance getting you into debt, then maybe it’s a credit card repayment, electricity bill or your HECS debt. Get on top of them while you have the spare cash and you’ll reap the benefits in the long run.
2. Start a house deposit fund
Your tax refund may not necessarily be enough for a house deposit, but it will be a big push in the right direction. Sometimes it’s just the fact that you need to start somewhere, and a big healthy deposit in your account could be all you need to get the savings bug and work towards the great Australian dream.
3. Increase your education
Some say money is power, but little did they know knowledge can topple right over that. Rather than rolling around in your newly acquired money, put it towards some personal development and get some education on a topic you’d always wanted to boast on your resume. If you think you’re good on the extra education front, do like our suggestion above and put it towards your HECS debt. The more you pay off, the more fortunate you will be for the education you were able to receive.
4. Stash it away
It may sound a little boring, but stashing your tax refund away into your high-interest bearing savings account will be sure to put a smile on your dial. Then you’ll be able to save it for a rainy day and put it towards something you actually want/need and not something you thought of on a whim. It’s also important to build up your emergency fund in the event of a broken-down car, or emergency dental appointments – your health fund may cover some of the expenses, but definitely not all of it.
5. Make a Super contribution
There is no better way to set yourself up for the future than to make extra Super contributions. You might be financially stable right now and not need your tax return for anything except maybe a new pair of pretty shoes, so let it work its magic and help you in the future. Making a commitment to adding extra contributions to your Super is a smart way to gear yourself towards retirement, and really who doesn’t want that?! If you think you’re really financially savvy, buy some high-yielding stocks and keep them until retirement – those dividends will be a boost to your travel plans upon retirement.
6. Reward yourself
Say you have been working really hard, and managing your finances responsibly over the past financial year then you probably do deserve to reward yourself for all your hard work. Rewards, however, can come in all forms. You could put it towards a holiday, buy a new computer, explore your photography hobby, or put it into savings. The options are endless, and if you go through life being tirelessly frugal, you may be missing out on the things that bring you happiness.
So giddy-up and get your tax return finalised and you’ll be reaping the benefits in no time! Divide it up to align with your budget like you do with your regular pay, or use it as a lump sum – whatever your heart desires, but make sure it’s worth it for you and your financial state.
The information contained in this blog is accurate only at the date of publication.