Getting a tax refund, bonus or inheritance

Top tips to make the most of your windfall

If you get a windfall such as a tax refund, a bonus, or an inheritance, you might be tempted to splurge on things you don't need.

Here are some smart ways to spend this money that will give you long-term benefits.

Pay off debt

Smart tip

It's best to pay off your higher interest debts like credit cards first.

You could use this money to pay off your credit card bill or pay down your mortgage or personal loan.

Paying off debts means you'll pay less interest and save money. For more information see making repayments.

Work out how much you'll save in interest by making extra repayments.

Credit card calculator

Put it in a high interest savings account

Make this the start of a new savings plan by putting the money in a high interest savings account. There your money will grow with the power of compound interest. For example, if you put a $3,000 tax refund into a high interest savings account that earns 5% interest, in 5 years time you'll have $3,850.

To find out more see savings accounts.

Work out what money you will have if you save a regular amount.

Compound interest calculator

How Australians spend their tax refund

Tax infographic thumbnail smallTake a look at our tax refund infographic to find out the average refund and how people spend it.

Contribute extra to your super

Making extra contributions to your super can really boost the amount of money you have to retire on. The catch is you won't be able to spend it until you retire.

If you are on a low income, the government will match your after-tax super contributions. The co-contribution matching rate is 50c for every dollar you contribute up to a maximum of $500. For more information on how to make extra super payments see contributing extra to super.

Work out how contributing more to super can affect your final super payout.

Superannuation calculator

Consider investing

Investing your windfall can really make your money go further.

If you're new to investing, start with investing basics.

If you would prefer to rely on professionals who are skilled in making investment decisions, a managed fund could be right for you. For more information see managed funds.

Get financial advice

For large amounts of money, such as an inheritance or a redundancy payment, you should consider getting financial advice. An adviser should be able to help you work out a strategy to make the most of your money.

We have tips on what to look out for when you are choosing a financial adviser.

Think through your options and use your windfall to give you a real financial boost.

Related links

Last updated: 10 Feb 2017