Category: Money Matters
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Sub category: Spending
16 July 2015

Top tips for making the most of your tax refund

Super-size this year’s tax refund with a few smart strategies.

What’s not to like about tax time? For an hour or two spent completing your tax return, not only do you get your finances in order but you could be in line to receive a juicy tax refund.

In fact, figures from the Tax Office show the average refund last year was around $3,630[1]. That’s a handy windfall in itself – but here are a few tips to make that money go a lot further.

Kick start a savings habit

This is impressive: deposit the average tax refund (remember that’s $3,630) into a high interest savings account, add in $50 each week and, based on a compound interest rate of 3.5% per annum[2], by this time next year you could have a tidy $6,404 stashed away. Check out how regular savings can turbo-charge your tax refund.

Save thousands on your home loan

Using your tax refund to help pay down your home loan could see your ongoing regular repayments reduce and leave you mortgage free that bit sooner. Discover how much you could save on your home loan with a lump sum payment.

Prevent minor costs becoming major expenses

Sometimes spending on essentials now can help you save in the longer term. Consider using your tax refund to take action on all those niggling must-dos you’ve been putting off. Whether it’s a check-up at the dentist, a service for your car or just some much needed repairs around the home, it could prevent a relatively minor cost blowing out to a far bigger bill.

Add some gold to your nest egg

We all look forward to the golden years of retirement and your super is there to help you grow a healthy nest egg. No matter how far off retirement is, using your tax refund to make a contribution to your super today could make a valuable difference to your lifestyle when you’re ready to hang up your work boots.

It may also provide immediate benefits. If you’re a low to middle income earner, using a tax refund to make a contribution to your super could see you eligible for a government co-contribution worth up to $500. Or, consider adding the money to a low income or non-working spouse’s or partner’s super fund to save up to $540. Just remember to check that you’re within the contributions caps to ensure it doesn’t end up costing you more.

So why not try one, or all, of these tips to strengthen your finances this year? Better still, make it an annual habit to get even more value from your tax refund.

[1] Australian Taxation Office Annual Report 2013/14 & 2012/13
[2] Example based on the current interest rate of 3.5% per annum (as at date of publication) offered to Savings Maximiser account holders who also have an Orange Everyday bank account and deposit their pay of $1,000+ each month.

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