What can you do to make and save more money with your tax return?
The end of the financial year is almost here, which for many Australian families means they’ll soon have a tax return or a lump sum payment from Centrelink they can use. If you don’t have a plan for the money it can easily be frittered away or wasted. However, if you want to make sure your tax return works harder for you, here are some options. This post may contain affiliate links to products and services we use. Check out our full disclosure here.
Switch to annual insurance
Paying your insurance monthly? You’re probably paying more a year by doing this. With your tax return, you could now compare insurance premiums, pick the best one for you and switch to annual payments. Continue putting aside your monthly premium amount into a high-interest savings account and use it next year to pay for your insurance. This way, you get the lower rate by paying annually and next year you’ll have the money when you need it, rather than relying on your tax return, leaving your return available for something else if you want. Check out more tips on saving with insurance here.
Reduce your debt
Debt is a massive burden to carry. The interest you pay, the amount of money from your wage which has to go to debt and the stress it causes are all awful. Put your return towards debt and get financially free sooner. Even if the amount doesn’t totally clear a debt I bet it’ll get you a lot closer!
As you clear your debts, close the accounts so you can’t rack up the debt again later. Check out The Barefoot Investor and The Total Money Makeover for tips on reducing debt along with specific methods. You might also want to read how this couple cleared $90,000 in 12 months (they were unemployed when they started) or how Kiri cleared $3,000 in 1 month.
Everyone needs a mini emergency fund. $1,000 to $2,000 is recommended as this amount will usually cover any emergency such as car repairs, your insurance premium if something happens, medical etc. Keep this money in a separate account so you don’t touch it and only use it for real emergencies.
Invest for the future or in yourself
It’s best to speak with a financial planner when it comes to your finances and investing. However, if you want to get started with a small amount, you can do your own research and invest as you wish. A few options are Raiz (previously Acorns) which lets you invest small amounts. I did a comparison over a few months here between it and a high-interest savings account.
Or you could choose your own shares after some research and invest that way. If you have $500+ to invest, my preference is to invest in packets of shares this way instead of Raiz as the fees are lower if you invest directly. However, do your research and invest wisely.
Lastly, you could invest in yourself by doing a course, taking a class you’ve always wanted to or getting something you need but have put off such as dental work. Any of these are a wise investment in yourself. This year I started a Diploma of Counselling, have been doing some different courses on Udemy for as little as $15 plus reading all the ebooks and doing the courses from The Genius Bloggers Toolkit (live again in October, but you can register so you’re notified through this link). I also joined a gym recently and am doing another dance class. Investing in yourself is worth it!
Eventually, you will need to replace items in your home. Research has shown the difference between old appliances and new ones when it comes to energy efficiency, especially for things such as heating and air conditioning. A new split system air conditioner might cost a little upfront, but the savings on your bills can be huge! Is your fridge or washing machine on its way out? Start researching now for the best deals such as 2nds World, which has appliances with slight scratches for much less than their RRP. Keep your tax return to use for the upgrade.
Add it to your super
Compound interest is your friend when it comes to superannuation. The sooner you put money in, the longer it has to earn interest and grow then earn interest on that interest. You can read here how you can be a millionaire even as a single mum through compound interest. Plus, depending on your income, there are co-contributions and other tax benefits for the following year if you deposit into your superannuation.
Your mortgage or home repairs
Sit your tax return in your offset account to reduce the interest you pay and clear your mortgage quicker. Alternatively, you could do some repairs or renovations to increase the value of your home then look at refinancing to get a better rate and save even more.
Personally, I view travel as a valuable investment in living your life and when done with the family, it is great for relationships, bonding and creating memories. It doesn’t need to cost a lot either. I shared here how to make money with travel and this post has tips to save money with travel. To get you started you can get $55 off with Airbnb and if you are booking flights check out Skyscanner or BudgetAir for some great deals.
Start a stockpile
Buying items when they’re on sale so you never pay full price is just one of the many reasons people stockpile. At this time of the year , there can be incredible deals which you can cash in on. Buy things in bulk or on sale and save money on your groceries. Sites such as Catch are a great place to start. You might also want to check out these tips to get free and super cheap groceries, or this post with tips to keep your groceries under $150 a week.
Start a business
Have you always wanted to start a business but didn’t have the funds to kick it into gear? You can now! Check out this post for how to start a business with less than $100. Or if you want to get into blogging, check out how to make money blogging here including the host I use and what I do.