How an adviser would tell you to spend your tax return
If you’ve just lodged or are in the process of lodging your tax return, you may be interested to know that the average Australian receives a $2000 tax refund. So before heading to the EOFY sales or buying that special something, you may want to consider how you could use your tax refund to get ahead financially. To this end we’ve spoken to our advisers and put together a list of their top recommendations.
1. Pay down personal debts
Look to pay off high interest debts first, such as credit cards or car loans. The interest you would pay could add up to hundreds of extra dollars in your bank account.
2. Put it towards your house
There are a few ways this can be done depending on your situation.
- For first home buyers, you may want to add your tax refund to your house deposit cash stash! This will also look great on your application.
- For home owners, you could use the tax refund to pay down your mortgage, or consider a renovation to add value to your home, hence increasing the equity in your property. This could be as simple as a fresh coat of paint, a new front door, fittings, new carpets in the bedrooms or take it a step further with a kitchen renovation.
3. Get the right insurance policies in line
- Health insurance to reduce tax premiums
- Income protection
4. Use it to see a financial adviser
- You could purchase shares/stocks
- Work towards achieving your financial goals
- Discover areas for improvement that can help you save money
5. Boost your super
You may choose to make a personal contribution to your super, which you will be able to claim on your tax return! Win win!
6. Invest in yourself
Sometimes you need to spend some money to make some money! Upskilling could lead to a pay rise or promotion, and adding a new skill could even land you your dream job.
Or have you been wanting to start your very own side hustle? You could use your tax refund to buy your first stock order.
Self-development is always worthwhile investing in too. Are there books that could improve your mindset or develop your knowledge? Here are our top book picks.
7. Invest in your children
Perhaps you have a high interest savings account set up for you children’s future you could add the tax refund to, or use it to get ahead on school fees or tuition fees.
8. Increase your emergency fund
You may choose to not spend your tax refund at all and save it for a rainy day. Ideally families should have three (3) months of living expenses set aside in an emergency fund.
How you decide to spend your tax refund will be completely dependent on you, your situation and what your current needs are, you might just need a get away with the family and have some fun with it! Our advice to you is simple, try to put it towards something that will put you further into the positives and avoid blowing it unintentionally, as we all know how fast money can go!
And this year we are offering new tax clients a 10% discount off their tax return invoice*! Our in house tax team specialise in personal, business and rental property tax returns. Please contact our team on 135 444 or email them at firstname.lastname@example.org
Do not hesitate to contact your adviser with any questions you may have regarding this article.
Tax offer valid until the 31st of October 2019.
Deputy Head of Advice