Getting a tax refund, bonus or inheritance
Top tips to make the most of your
If you get a tax refund, bonus or inheritance here are some
smart ways to use this money that will give you long-term
Pay off your debts
You could use this money to pay off any short-term loans or credit card debt you
have. Or, you could use it to reduce your personal loan or
Pay off higher interest debts like payday loans or credit cards first.
If you have more than one credit card, pay off the one that
charges the highest rate of interest or the smallest debt first.
For more information, see our webpage on how to pay off
multiple credit cards.
Paying off debts means you'll pay less interest and save money.
Find out how you can reduce your debts faster by making extra
Work out how much you'll save in interest by making extra
Credit card calculator
Create an emergency
If you don't already have one, start an emergency savings fund. Open
a high interest savings account and, if you can, aim to build up
1-3 months' worth of living expenses, so the next time life throws
you a curve ball, you'll be ready to face it head on.
Compound interest will help your money to
grow. For example, $3,000 in an account earning 3% interest would
grow to $3,485 in 5 years' time. If you deposit extra money into
this account, your savings will grow even faster.
See how compound interest increases your savings.
Compound interest calculator
How Australians spend their tax refund
Take a look at our tax refund
infographic to find out the average refund and how people spend
Contribute extra to your
Making extra contributions to your super can really boost the
amount of money you'll have to live on when you retire.
If you're on a low income, the government will match your
after-tax super contributions with 50c for every dollar you
contribute, up to a maximum of $500. For more information on
boosting your super see super contributions.
Work out how contributing more to super can affect your final
Consider investing your
Investing your windfall can help you grow your money and keep it
safe. If you choose to invest, make sure you take the time to
consider your investment goals.
If you're new to investing, our section on investing
smarter is a great place to start.
If you would prefer to rely on professionals who are skilled in
making investment decisions, you might consider a managed fund.
These types of products give you access to a range of investment
types with the benefit of having a professional investment manager
choose which individual assets to invest your money in.
Get financial advice
For large amounts of money, such as an inheritance or a
redundancy payment, you might consider getting professional
financial advice. An adviser can help you develop a plan to make
the most of your money.
We have tips on what to look out for when you are choosing a financial
Commit to making the most of
your tax refund
Publicly committing to your goals is a great way to motivate
yourself to achieve the things you're aiming for. Decide how you'll
use this year's tax refund to boost your finances, and share it on
your own Facebook page.
I commit to making the most of this year's tax refund, instead of
spending it on something I don't really need.
SHARE TO Facebook
You could also follow MoneySmart's Facebook page. It's a
safe and supportive community that will encourage you to stay on
track to reach your money goals.
Don't have Facebook? Here are some other options
If you don't use Facebook, or would prefer to make a commitment
another way, why not write it down on a post-it note and keep it in
a place where you'll see it everyday.
This could be:
- in your wallet
- on your bathroom mirror
- on the fridge
- above the coffee machine
- near your desk at work.
Alternatively, set a reminder in your calendar about your tax
refund commitment when you lodge this year's tax return.
Think through your options and use your windfall
to give you a real financial boost.
Last updated: 29 Jan 2019