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Spending Your Tax Refund Wisely

Spending Your Tax Refund Wisely

THAT time of the year is here again, and the chances are many of us are hoping to get a tax refund. Regardless of the amount, there are wise and not-so-wise ways to spend the money. Despite of what your inner voice may be telling you (new shoes, a fancy night out, upgrading your golf clubs…), try to give that money a purpose. And considering that an average tax refund amount in New Zealand is around $450*, there are quite a few smart things you could do with that money.

One of the things that may first come to mind is paying off your debt, such as, for example, payday cash loans. As a responsible lender, here at Payday Advance we strongly encourage our customers to make early repayments on their loans; and unlike some other lenders, we do not charge any fees for paying loans off early.

Your could also use the refund money to start or increase your emergency fund. According to the Sorted website, you should aim to save up the equivalent of 3 months’ expenses, but depending on your specific situation (for example, whether you have any dependants) you may need to save more. You may also want to make sure your emergency fund earns reasonable interest – so that your money works for you!

If you are a homeowner, you could consider making sensible home improvements which can increase the value of your property and make your home cosier at the same time, for example getting a home ventilation system.

Spend money to save money – that could mean getting your car serviced or visiting your dentist or hygienist for a regular check. These things may not be considered super-important, but at the end of the day they can save you hundreds of dollars. According to Huffington Post, simply changing your car’s air filter once a year can save over $270! Other examples could often be getting pet insurance, paying a lump sum for a gym membership instead of paying in weekly instalments, splurging on a coffee machine instead of paying $5 daily for take-away coffees, etc.

If you are on a very tight budget, giving money to charity may be the last item on the list of your current financial priorities. However, if you feel that you can spare a few dollars, donating to charity can be a very fulfilling and socially beneficial thing to do: besides, you may be able to claim tax credits on your donation – up to 33.33% of the donated amount.

These just some examples of what you could consider spending your newly-found funds on. At the end of the day, you know your financial situation the best – and only you can fully figure out your needs.

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Disclaimer: The above information is general in nature and not intended to be advice. You should consider seeking professional advice before following any suggestions in this blog/website.