July is usually a month of collating receipts and documents to complete your tax return. The sooner your tax return is lodged, the sooner you can receive your family tax benefit if you opt to be paid it as a lump sum as opposed to fortnightly throughout the year. If you are expecting some money to come in in the next couple of months, here are 5 ways to spend your tax return that will help you save money – and your sanity.
1. Credit Card debt. Cue inward groan. Credit card debt usually has the highest interest rate applied so it makes sense to put your refund towards paying off your credit card because if you place it in a high interest savings account, the interest rate is 5 times less than a typical credit card at 20%.
2. Mortgage Repayment. Put it on your mortgage if you have one. Every dollar put on your mortgage is a dollar that doesn’t accrue interest.
3. Put the funds away for future expenses like Christmas and Back to school costs. If you have a dedicated savings account for Christmas, place the funds in there.
4. Purchase products for work or pay for courses that are tax deductible. You may not be able to claim them until next financial year, but at least you have the funds now to pay for them if they have been on your list to acquire or do.
5. Cross one thing off your bucket list. Often the above suggestions are the smart tips when getting a cash bonus, but everyone needs to have fun once in a while. Check out sites like Red Balloon for sales on experiences. Working hard deserves time out and investing in the memory bank is a worthwhile thing to do.
What will you do with your tax return if you get one this year?