The moment arrives where your tax refund hits your bank account and it feels like you’ve just won the lottery.
But think about it: this is money you worked hard to earn; you just didn’t have access to it until now! Instead of rushing out to blow your tax refund (and possibly even more savings) on something flashy, take a moment to consider the ways you could put this money towards achieving your financial goals. If you’re fighting the urge to spend your tax refund on something you don’t actually need, read on for our top five uses for your tax refund.
1. Get out of debt
Whether you’ve racked up credit card debt or owe on a personal loan, using your tax return to minimise your debt is one of the smartest financial decisions you can make. Paying off what you can now will lower your interest rates and help you improve your credit score.
2. Start saving for a big purchase.
Start saving for a big purchase. If you’re looking to take out a personal loan for a car, white goods, or other large purchase, use the money towards your down payment on that loan. Saving for a house or starting a small business is quite a daunting task, but putting your tax refund towards that meeting that goal will certainly make a difference.
3. Make an investment.
Always wanted to buy shares in a company or gain interest on a fixed term deposit? Now is the time to start investing! Using your tax refund to invest will grow that amount over time, so what feels like “free” money will turn into even more.
4. Put it aside for emergencies or retirement.
Even if you’re currently in debt, it’s wise to have some cash set aside for emergencies, like car breakdowns, medical issues, or unexpected travel expenses. Place your tax refund in a savings account you can’t access when you feel the urge to shop, or add it to your superannuation account to bulk up your retirement fund. Future you will be grateful!
5. Use it on a pesky annual fee.
Car servicing or registration fees, school enrolment fees, and gym membership charges tend to sneak up on us even though we know to expect them. Use your tax refund for one of these charges to eliminate a big financial stressor you face each year.
How will you use your tax refund? If you’re thinking of using it towards a larger loan, allow our experienced team to coach you through the instant loan process. For more money saving tips and ideas, browse through our blog or chat with us today.