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Tax time has hit again, giving most Australians the opportunity to reclaim their money through their tax return and invest it for the future. If you are lucky enough to receive a refund at tax time, rather than spending it on luxury items, clothes or holidays, consider one of our smart ways of investing your tax refund with your future in mind.
Please note that the information in this article is of a general nature and does not constitute personal financial advice.
1. Pay off high interest debt & consolidate your loans
Credit cards and other forms of unsecured finance can attract interest rates of more than 20% – that’s an extra $1,000 per year on a loan of just $5,000! You can save immediately on interest in the coming year by paying down the balance on your credit cards or personal loans. If you have multiple cards or personal loans, it might be in your best interest to consolidate these into a single loan. Not only will you reduce the number of monthly payments you have to monitor, you’ll also most likely benefit from a lower overall interest rate.
2. Start a high interest savings account for a rainy day
High interest savings accounts are available with some major banks and online financial institutions. Do your research to ensure that you can access the funds as required, then put away your tax refund into a high interest account for emergencies.
3. Make additional contributions to your superfund
Additional superannuation contributions have a snowball effect – investing your tax refund of just $1,500 this year could give you tens of thousands more in your superfund at retirement. Before making voluntary contributions, we highly recommend speaking with your accountant or tax adviser to ensure that your contribution does not exceed the allowable amount.
4. Make home improvements
Whilst your tax refund is probably not enough to completely renovate your home, it could be used towards minor improvements and increase the value of your property. You may consider taking a small loan to fund the remaining amount needed to create the home of your dreams.
5. Start investing
A tax refund is the perfect opportunity to get started with investing. There are so many different investment options that we highly advise speaking with an expert before diving in.
6. Invest in your career
Career related training can lead to a better job or higher salary in future. What’s more, in certain cases the investment can be claimed as a deduction in next year’s tax return.
7. Start a business
Most small businesses require some form of investment to get off the ground, from just a simple website to investing in stock and equipment. Your tax refund could be used as the base for this investment, and you may wish to obtain extra business finance to get up and running quickly. Speedy Finance offers small business loans for both new and established businesses, so contact our business lending specialists to see how we can help you get started today.