Getting your tax refund back is exciting, but as tempting as it is to splurge, consider other ways you can put that money to good use.
Consider the following options:
Add to an emergency fund
If you don’t already have an emergency fund then now is the time to start one. An emergency fund acts as a financial backup in the case of an emergency, i.e., losing your job, higher than anticipated car expenses, medical costs, home maintenance costs and so on.
Building an emergency fund with enough money to cover at least three months worth of expenses is a good starting point. Make sure the money is added to a high-interest savings account to utilise compound interest.
Boost your nest egg
Boost your super by making an after-tax contribution to your super. For eligible low-income earners, the Government will match your after-tax super contributions with a maximum co-contribution of up to $500.
Pay down your debts
Pesky credit card debts add up. Consider paying these debts off first as they usually have higher interest rates. If you don’t have credit card debts, consider making extra contributions to any personal loans or your mortgage (if there are no restrictions on additional contributions).