9 Wise Moves to Make with Your Tax Refund

It’s tax refund season! Now, whether you are expecting a major or minor windfall, the decisions that follow can work to break or build your financial situation.

Here are 9 ways to make sure your money works for you, to set you in a better financial standing for your future.

 

1. Have fun! Splurge – an overdue holiday, a new phone, a new…

Treat yourself, right? You stick to your budget throughout the year, you save well, you do your best to keep everything in check. There is no need to feel guilty here about putting your tax refund toward your Christmas holidays, a new phone, or anything to reward yourself. Be sensible and savvy. A $30 tax refund does not necessarily justify a $3,000 overseas holiday, however, do not be afraid to reward yourself if you do receive a worthy return.

2. Repay debt

Credit card debt, mortgage, student loan, car loan repayments, hire purchase repayments. We tend to carry a lot of debt. Plus, these debts carry high-interest rates so the need to repay these is essential and of a high degree of importance. Contributing your tax refund toward eliminating debt is certainly a wise move and one to be recommended. For more strategies on repaying multiple routes of debt check out;

https://nzcusouth.co.nz/debt-snowball-or-avalanche-whats-the-best-way-to-tackle-your-debt/

 

3. Keep the funds ‘in house’

If you own a home, contributing your tax return toward home improvements and renovations is a smart move. Buying a home is an investment, and by improving the state of your place, you are essentially improving your investment. Undertaking kitchen or bathroom renovations? Or even simply upgrading your appliances; a tax refund can prove timely to help you on your way to improving your living situation.

4. Boost (or establish) an emergency fund

Directing your tax refund toward an emergency fund is hardly the fun option, but is a wise move. An emergency fund prepares you for the unexpected; a job loss, medical emergency or any unexpected costs that may suddenly arise. Boosting or establishing an emergency fund is more a safe, peace-of-mind option that will allow you to sleep easier at night knowing that you are prepared in case of emergency. For more advice on setting up your emergency fund check out https://nzcusouth.co.nz/8-reasons-why-an-emergency-fund-should-be-on-your-financial-radar/

5. Boost your savings

Increasing your savings account is never a bad idea. You may not NEED anything at present so why not direct your tax return to savings? This may come in handy at a time when you do really need it. Similar to our way of thinking surrounding the emergency fund, it would be wise to consider boosting your savings if you have ticked off some of the other options on this list.

6. Save for Christmas

Christmas is always an expensive time of year, right? You may be placed in a good financial situation right now, but several months down the line you will likely be confronted with multiple financial decisions to make. It’s never too early to prepare. And by preparing, this can cover anything from purchasing gifts in advance, paying for a Christmas/New Year holiday now through to putting a fund aside for the holidays – to brace yourself for the raft of costs that will impact us during the holiday season. Why not start up an NZCU South Christmas Saver to help you afford the special things at what is a busy and costly time of year?  https://nzcusouth.co.nz/products/savings-accounts/christmas-saver/

7. Invest

A worthwhile tax return is a bonus and can be a surprise. Let’s say you have been sticking to your budget well and you are on the right path to achieving your financial goals. Why not direct your ‘bonus’ tax return toward an investment fund? Allowing you to sit back and watch as your money grows in a high-yielding term deposit. For our term deposit options and rates check out https://nzcusouth.co.nz/products/investments/term-deposit/

8. Need items

Is there ‘that thing’ that you have been putting off? Mainly due to cost. An overdue dental appointment, new tires for the car, or anything that you may have refrained from doing due to a lack of funds? Now is the time to do it. The key here is that you need to differentiate what is a need and an essential action versus what is a want, that may not be necessary at this point in time.

9. Pick up a new hobby

Always wanted to take up deep-sea diving or surfing? Or perhaps golf or hiking for the land-locked inclined? And a lack of funds has been holding you back? Then why not utilise your tax refund to fund whatever new hobby you are yearning to learn or take up. Similar to our first point regarding treating ourselves – however, this seems more justified doesn’t it?

 

Are you receiving a tax return this year? Big, or small what are you planning to do with your return?

You can complete your tax return at http://www.ird.govt.nz/forms-guides/number/forms-001-99/ir003-individual-income-tax-return-2018.html

 

 

Related Links

1. 8 Reasons why an Emergency Fund should be on your financial radar 

2. Debt Snowball or Avalanche; what’s the best way to tackle your debt?

3. Time to re-think the way you manage your money

 

 

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