What are you going to buy with your tax return?

I know, I know, as tempting as it may be to let it all out and go on a spending spree with your tax return money, it is wise to REINVEST all your hard work into your current debts or work/household lists to do. After all you did work hard to get that money, so its best to spend your tax return money wisely.

The following are tips on what you could do with your tax return.

First job or tertiary student

  • reduce your credit card debt
  • deposit it into a high-interest savings account but be sure to check the fine print – many accounts will entice you with a high interest rate but the headline return may drop once your money has been in there for between four to six months.
 House savers
  • deposit it into a high-interest savings account, as long as you do not have a substantial credit card debt or high-interest car loan.
 Mortgage payers
  • pay lump sums into your mortgage but be sure to check your mortgage arrangements as fixed-rate mortgages and many variable-rate home loans will not allow you to deposit lump sums or pay out early.
 Mortgage payers with children
  • children’s school fees
  • Christmas presents
  • mortgage repayments
  • credit card debt
  • electricity bill
  • deposit on a much-needed new car
  • a holiday for the frazzled nerves.
 Business owner
  • reinvest the money directly into your business
  • credit card debt
  • mortgage repayments
  • quarterly business activity statement payments
  • year-end tax bill.
 Pre-retirees
  • contribute to your superannuation
  • high-interest savings account
  • acquire high-yielding shares that deliver dividends
  • mortgage repayments, as your mortgage may be within reach of being paid out, if it has not been already.
 Retirees
  • high-interest savings account instead of a bank transaction account where you will receive zero or minimal interest
  • high yields that ensure your savings are enhanced before they are diminished by inflation