Your Tax Refund
I know I’m harping on about being organised but with a little planning prior to the end of the financial year you can legitimately maximise your taxation refund.
And now the Tax Refund has landed in your Bank Account.
You have a windfall from the Australian Tax Office. What next? You have some decisions to make. It is time to consider what is best for you. Consider your financial situation and plan accordingly.
Some options that you have include:
- Spend
- Reduce debt
- Future emergencies
- Save
- Invest
1. Spend
Don’t hesitate to give yourself a treat. However keep it in context. There are other demands that are equally or more important.
2. Reduce debt
If, for example, you have credit card debt, then this is a very smart option. By paying down/off your credit card you are removing the requirement to continue paying very high interest. Many cards charge 20%. By removing this debt, the sum you paid is equivalent to earning 20%.
It is obvious that this strategy makes sense. It certainly makes more sense than spending all or most of your tax refund.
3. Future emergencies
Emergency demands on your finances will happen. It may be a vehicle repair, dental emergency, or the demise of your washing machine. Ultimately an emergency will happen and, if no provision has been made, it can wreak havoc on your short-term financial situation. So it makes sense to plan.
4. Building your short-term savings
An accessible bank account allows you to readily access your funds while also earning a modest interest rate. This flexibility empowers you to direct these funds toward any of the options outlined below.
5. Invest
Start an investment portfolio. The best part? You don’t need a lot of money to start. Many investment platforms allow you to begin with small contributions and gradually increase them over time. Even small, regular investments can add up significantly over time thanks to compound interest. Imagine your money quietly working for you in the background! By investing you are setting up your future. And the future will arrive sooner than you think!
You already are an investor if you have a superannuation account.
To invest in the longer term, it makes sense to put all or part of your tax refund into your superannuation fund because of the lower taxation that is applied to superannuation. The only downside of investing in superannuation is that you cannot gain access to these funds until retirement.
It’s your money and your future.
💬 Have questions? Email me directly or book your free Discovery Call to start a conversation about your goals.
🌱 Ready for a transformation? Check out my Money Makeover Course and take the first step toward financial freedom today!
