Top 5 tips on how to use your tax return

A lot of Australian’s will be getting an extra $1,080 in their pockets after the government passed the new tax laws through as legislation recently. Unfortunately not all Australian’s will be eligible as it works on a sliding scale but for those of you who are, we thought we would go through our top five tips for what you should do with this extra bit of cash to make sure you get it working as effectively and efficiently for you as possible.
 
 
#1 – Invest!
 
 
The top tip is to act like you never had the money and put it away for the future. This is the easiest way to turn that couple of thousand into a lot more. Putting the money into an investment you currently have or starting a simple diversified investment and letting the money sit and grow for many years can be a great use of these funds. If you have children you could even potentially look at investing these funds into something like an investment bond to provide for education costs into the future. 
 
 
#2 – Invest in yourself
 
 
Use the funds to better yourself in an area that you want to, whether that be taking a class or even buying new equipment that might make you better or help you get to where you want to be in a certain skill. This is money that you mightn’t have expected to have this time last year so using it to better yourself can be a great use of the funds.
 
 
#3 – Pay down credit card debt
 
 
Probably the most boring of the tips but if you have credit card debt and are paying a high interest rate on that debt then the best use of the extra injection of money may be to pay that debt down. Even if you have a numerous amount of buy now pay later type financing on the go such as afterpay, it can be a good idea to pay down a few of those or get ahead in a few repayments to ease the financial stress. 
 
 
#4 – Super contributions
 
 
Putting some money away towards your retirement goals can be a great use of the money. Depending on how close you are to retirement, squirreling away your tax return and letting it sit and grow until retirement will hopefully mean that those funds could potentially allow you to retire a little bit earlier. If you were to do a concessional contribution then this could mean that you might also get a bit more back in your next tax return. 
 
 
#5 – Put it towards your financial goals
 
 
Everyone has financial goals, whether it’s purchasing a home, buying a new car or going on holiday and using these extra funds to help you hit that goal faster can be a good use of the money. If you’re a first home owner looking to purchase a first home in the near future then using the funds to do a First Home Super Saver Scheme contribution could be potentially an even more efficient use of the funds. 
 
 
As always, if you have any questions please feel free to send me an email at zac@pekada.com.au!
 

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Post Contributor:

Zac Masters | Financial Planner @ Pekada

Wealth Collective trading as Pekada (ABN 95 624 612 684), corporate authorised representative (CAR), number 1263725, is authorised to provide financial services on behalf of Communitas Wealth Pty Ltd.

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