Use your tax return to your advantage.
Many of us are due to receive our tax returns in the coming months. While some see it as ‘fun money’, with some planning you can use it to your advantage, especially with the rising costs of living, and increases in interest rates on mortgages.
Home Loan or Offset – If you don’t need the money immediately, consider storing it in an offset account or in your loan if you can redraw. This could cover future payment increases, means less interest on your home loan, and an opportunity to pay it off a little faster.
Pay off debt – Whether it’s a credit card, a personal loan, store cards or a mortgage, this is a great chance to make a lump sum payment and clear some of your debt. This may make managing other payments a little easier.
Add to your emergency fund – Having some savings in case the unexpected happens can reduce financial stress. You could look into a higher interest savings account or term deposit, or even using your offset account to keep the funds in.
Consider solar – By switching to solar energy, you can save money on your electricity bills or potentially eliminate them all together. Even if electricity prices continue rising in the future, you can have the peace of mind knowing that you are generating your own power. You may even get dollars back by supplying additional energy to the grid.
Add to your Superannuation – Making after-tax contributions is a simple way to add to your super, and can really boost your superannuation savings. Adding to your super may also be taxed at a lower rate depending on your income level.
Everyone’s financial situation is unique, but whether you are due a large or small tax return, if you give it a little forethought you can make sure it’s used in a beneficial way.