More than six weeks have passed since the end of the financial year.
And by now you probably have completed your tax returns and are waiting for your tax refund. For most of us it’s quite a nice chunk of money and the average tax return is about $3,000.
Most people’s tax refund is often already spent. It has been nominated for bills, credit cards, mortgages or holidays.
But what if you tried a different strategy this year? After all, this is unexpected money. It’s not money you were potentially relying on and you didn’t have to do a whole lot for it.
Here are 3 options to consider…..
Sort out your credit card
If you struggle with paying down your credit card then this is your opportunity to sort yourself out. You might start with paying your refund onto it and then contacting your bank and reducing your credit limit.
Invest in a managed fund
You don’t really have any debt but you don’t really have any savings either. Your tax refund may be your opportunity to start with a small amount that you weren’t budgeting for and to continue to add to this with future refunds. Money in a bank account will earn you dismal interest rates so your tax refund gives you access to the sharemarket or even property via property funds without needing a large deposit or even understanding shares.
Leverage your refund
If you’re not scared of a little risk, you might consider leveraging your refund. Essentially this involves using the same strategy as investing in a managed fund but in year two and onwards, you would borrow an additional $3,000 each year to add to your investment.
Read the full SMH article here: SMH Money Guide