What should I do with my tax refund?

You’ve waited patiently for this day. Your fingers are hovering over the keyboard, punching in your interest earned and hours worked. In a few days the ATO will send you a shiny new email, filled with a ‘free parking’ level of cash. You’re left with one question: 

What am I going to spend it on?  

Pay off debts 
According to ASIC, around two-thirds of those who receive a tax return will spend it paying down debts.  

Though not the most glamorous, it can be a great way to get a head start on paying off a credit card or reducing overall payments on your home loan.  

Offset it 
The next best (and sometimes preferable) option is to place your extra dosh in an offset account. This keeps your money accessible for everyday or emergency spending while simultaneously saving you interest.  

Do a good deed 
If you’re in a particularly giving mood, there are thousands of local and global charities who would appreciate your contribution. Plus, many donations are deductible on that year's tax return.  

Plan for retirement 
If you’re under the age of 30 you might not think about retirement much. The truth is that the younger you are, the bigger an impact a contribution can have on your retirement.  

Contributing won’t be beneficial for everyone, but you can talk to your financial adviser or accountant if you’re unsure. That extra money will then compound until it’s time to crack open the old piggy bank.  

Even if you only contribute a small amount, that extra plane ticket or day in paradise will be invaluable when the time comes. And, it’s tax deductible! 

Prepare for the apocalypse (or a rainy day) 
No matter what we plan, sometimes we roll an 8 and end up on an occupied Park Lane. With hotels.  

A bit of a buffer when you have unexpected costs can help a lot. Broken fridge? Forget that your car insurance is due? Your emergency fund is there to cushion your fall.  

Invest your money 
If you already have an investment account, this could be as simple as adding a one-off payment.  

This might also be a great opportunity if you’ve been thinking about getting started but haven’t been able to find the spare cash.  

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There is no one size fits all approach to deciding how to use your tax return. If you’d like advice on how to best utilise your return, feel free to reach out the office.