Many of us are due to receive our tax returns in the coming months. While some see it as ‘fun money’, with some planning you can use it to your advantage.
Pay off Debt
Whether it’s a credit card, a personal loan, store cards or a mortgage, this is a great chance to make a lump sum payment and clear some of your debt.
Home loan or offset
If you don’t need the money immediately, consider storing it in an offset account or in your loan if you can redraw. It means less interest on your home loan, and an opportunity to pay it off a little faster.
Add to your Superannuation
Making after-tax contributions is a simple way to add to your super, and can really boost your superannuation savings. Adding to your super may also be taxed at a lower rate depending on your income level.
Add to your emergency fund
Having some savings in case the unexpected happens can reduce financial stress. You could look into a higher interest savings account or term deposit, or even using your offset account to keep the funds in.
Spend it locally and support a small business
If you are going to spend the money, perhaps spend it on a local business that has been doing it tough through the last few months.
Everyone’s financial situation is unique, but whether you are due a large or small tax return, if you give it a little forethought you can make sure it’s used in a beneficial way.
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