With the lodgement of tax returns and issue of resulting refunds many Australians may be wondering how best to utilise those funds this year.

Your tax refund can be a major financial bonus and can help secure your financial situation. There are many ways to avoid wasting your refund and making the most of your cash.

Here are five smart ways to use your tax refund this year:

1. Top Up Your Savings Account

If you have a financial goal that you are working towards, it may be for a car, a house deposit, a holiday or even a wedding – your refund is a great opportunity to top up your account and work towards your goal faster.

Starting a new savings account or a term deposit can be a great way to store your refund. We all can get tempted to spend our refund straight away; putting your refund in a term deposit will stop you from accessing the money for a set amount of time and will be gaining some interest while it sits there!

2. Pay Off Debt

Most Australian’s hold some form of debt, whether that be a personal loan, student loan, a mortgage or credit card debt. An incredibly smart way to use your tax refund is to pay down existing debt.

The average interest rate on new credit is around 16%. Interest fees can snowball quickly into overwhelming amounts of debt particularly if its credit card debt. If you use your tax refund as a lump sum to pay off some debt, you will reduce your financial burden as well as improving your credit score.

3. Add Value To Your Property

Putting money into home improvements, whether that be your home or an investment property, can reap tremendous rewards. Home improvements can add instant value to your property and will pay off in the long run.

When you make improvements to your investment property, this can result in tax deductions as well as increasing the amount you can charge in rent. Ensure to not focus on the wrong areas of your home when renovating. Make smart money moves to get the most value out of your property.

4. Invest In Shares

Investing in shares can be a complex matter, however once you become educated in shares, investing your money into the stock market can be highly beneficial to your financial success.

There are more than 2,000 companies listed on the Australian Securities Exchange. Take the time to research and learn about the stock market and decide what shares are worth investing your money in.

5. Top Up Your Super

Increasing your super fund by adding money from your tax refund is a fantastic way to boost your superannuation savings. This is money that is in addition to any compulsory super contributions that your employer makes.

There are caps that can apply to any contributions made to your super. The caps can depend on many things such as your age and whether you contribute before or after tax. It is important to be aware of these caps to avoid exceeding them.

Spending your tax refund smartly can help you advance your financial position. Be sure to explore your options and make the best decision on what to do with your tax refund, to ensure you are supporting your financial goals.

How We Can Help

Here at W M Wright & Co, we strive to make the most out of your tax return. If you are looking at how you can make the most out of your tax return, contact our team.