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.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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