[Updated August 20, 2024]
If you are one of the 84 per cent of Australians expecting a refund, getting ready to lodge your return is not quite the epic chore it feels like to others. So many people are more than happy to get their taxes filed and watch their money roll into their accounts. Last year’s tax refund averaged right around $3,600.
When you are expecting a refund, it is easy to daydream about a month in Bali or a shiny new sports car, but there is something to be said about practically using your money.
Here are six practical ways our financial experts suggest spending your tax refund.
Life is busy and goes by so quickly. One day you are just beginning to figure out pocket squares, and the next, some young-looking financial advisor is telling you to put your dreams on hold again.
You can invest in yourself and still come out ahead. Think about furthering your education. It may be deductible on next year’s taxes. Or maybe you have always wanted to learn to paint. Investing your tax refund in yourself is a good idea.
Again, not a glamorous route, but this can help you immensely as you move forward. Carrying debt is cumbersome and, at times, oppressive.
You may feel that if your tax refund is not enough to wipe out the debt, it is not worth putting towards paying down debt. It does not need to be an all-or-nothing proposition. Use your tax refund to chip away at your debts. You will thank yourself later when you are free from debt.
Remember the old saying that people do not plan to fail? Do they fail to plan? If you have been steadily saving some or all of your income tax returns, you will be able to help your kids (or even yourself) during a tough time. At some point, your kids will become adults who may need a hand from mum and dad.
Recent estimates tell us that to retire comfortably, we will need $640,000 for a couple and $545,000 for a single person at retirement age. Those numbers may seem unattainable, but you must begin the journey somewhere.
A financial advisor can give you the information you need to move the appropriate amounts of money from the tax refund to the super. This is a move that can provide significant rewards down the line. Especially when you are playing another round of golf while your friends are asking if someone wants fries with that.
Even if you have no immediate plans to sell your home, you can rearrange things to make the time you spend at home as pleasant as possible and add value for resale down the road.
You do not need to do major demolition projects to make your home more desirable. Often people become fixated on adding something significant and run out of money.
One grand gesture makes some people feel as if they must redo as much of the house as possible, and things do not always go right. Start with manageable projects. Fresh paint, updated appliances, new flooring or lighting can make your home a beautiful space you can enjoy now. As well as a stunning place now, you have invested in your home to serve you down the road.
It is no exaggeration to say that there is ALWAYS someone who has a more challenging life and lacks many of the necessities of daily living. You can find reputable organisations that take donations online, or your local house of worship can offer suggestions of places that accept donations.
Even if you do not have an extensive collection of gently used clothing or household items, organisations will gladly take monetary donations to pay for various necessities for men, women, and children.
Some taxpayers eagerly anticipate their tax refund and have definite structured plans for where they will spend it. If you are unsure about your refund or are not sure you will receive one, please feel free to contact us at My Tax Refund Today.
We can make sure you have lodged your tax documents, and you will know in a matter of minutes how much of a tax refund you have coming. Tax season may never be the most wonderful time of the year, but it can bring some much-needed revenue.
Simply fill out the form and one of our Australian tax experts will call you back.
