If you’re expecting a tax refund in 2012, there are numerous ways it could be spent. Options that flew through my mind included a quick jaunt up somewhere sunny, a couple of new pairs of very nice shoes, or some very fancy dinners out. I don’t really have a problem with using a tax refund for any of the above; it’s pretty tricky finding the spare cash to lash out once in a while. But if you’re looking for a meaningful way to spend your cash this year, consider these options.
High Interest Online Savings Account
Low interest rates generally means bank accounts can move reasonably slugglishly as well, but there are still some good deals for savings accounts out there. RAMS is currently offering 5.75% interest, with the big four offering around 5-5.3% for online savings accounts. If you would like to earn some interest on your rebate, but need it to still be available, then an online savings account could be a great investment option for you.
You need serious money to invest in shares right? Wrong. While a lot of managed funds won’t let you trade with a balance of less that $5,000, you can start investing at $2,000 provided you also set up a direct debit for a monthly investment. Talk to a financial advisor about the ins and outs, but it could be a way to start learning about investment without an immense risk.
Straight Into Super
Say your rebate is $1,000. If you invest that as a voluntary contribution into super, you will receive a co-contribution from the government, making your investment go further and also allowing you to take full advantage of compound interest over the years. Even if you’re already investing in super on a monthly basis, if your retirement savings need a bit of a bolster, consider the investment.
Replace Old Whitegoods
Or heating systems. Or invest in some insulation. Whatever appliances you are using that are energy inefficient, getting a tax refund is a fantastic way to ensure you save money for your ongoing running costs. With the price of electricity jumping up at the start of the new financial year, it’s a good idea that everything to lower your running costs has been done.
Go To The Dentist
Visiting the dentist is a very costly exercise and one we neglect when money is tight. Invest in yourself and your future well-being and use the tax refund to sponsor a trip to your local. It might not be the most exciting of investment options, but it is without a doubt one that will pay back ten-fold.
Pay Off Some Debt
All of the above are great options, but if you’re having difficulty paying off your debt, this could be a great opportunity to make a mark on your credit cards, mortgage or personal loans. You’ll save money in the long run on all the interest you don’t pay, and it could be the impetus you need to make this next financial year the one where you pay of all your consumer debt for good.