After all the time and effort you put into doing your tax refunds, all that’s left to do is wait for your reward! But let’s not get ahead of ourselves and spend it all on that watch we’ve been eyeing for the past 2 months.
We have compiled 5 smart ways to make sure your tax refund doesn’t go to waste.
1. Settle your bills and loans
You may be eager to go on that holiday you’ve been planning with your friends over the past few months, but we all know that the first thing you should do with your tax refund is to pay off any outstanding payments or loans you have.
Be sure to start with the more urgent payments and higher interest debts such as credit card bills and short term loans and move down the list from there. By paying off these debts early, you get to save money by paying less interest payments in the future.
2. Save for a rainy day
You never know when an accident will happen, but you can prepare yourself for it if it does. The worst case scenario is to run out of funds when you need it the most.
Create a separate account for your emergency funds and regularly add to it, or take this into account while preparing your personal budgets.
The small bits that you save up every month will definitely add up and be worthwhile in the future.
3. Investment options
Investments can be a great way to grow your wealth using the extra funds you just received from your tax return.
However, bear in mind that the success of your investments will depend heavily on the amount of research you do on the types of investments you plan to make.
You should also consider the amount of funds you are able to allocate to investments because it will take time before you can access your earnings.
4. Invest in yourself
If 2020 has taught us anything, it is that upskilling is incredibly valuable in a time of crisis. When jobs are scarce, the best thing you can do is improve yourself.
The obvious option would be to attend workshops and undertake further studies to build your knowledge and skill set depending on your field of work. If the course you take is directly related to your field of work, it may even be eligible for a tax deduction.
Even something as simple as picking up a new hobby that you’ve always wanted to try can benefit your personal growth, which will inevitably spread into various facets of your life.
5. Consider donating
Whether large or small, donating to a cause you care about is a great way to spend your disposable income.
The Australian Charity Guide has a list of over 10,000 Australian charities you could donate to. Make sure to do your research to ensure the charity you donate to aligns with your values.
Also, remember that charitable donations are tax deductible!
If you need help with preparing your tax return, please do not hesitate to contact us for a consultation. We are confident that we will be able to assist you! Contact us now at 02 7208 5065 or email@example.com