OK, you can’t yet submit your tax return for 2011-2012, but if you’ve organised yourself, you’ll be ready to go in early July, and your refund could follow before the end of the month. If you want to start planning now for what you’ll do with that windfall, we have a few suggestions.
Picture by Joe Shlabotnik
The majority of Australians get a refund, and it’s a substantial amount (above $2,000) for many of us. So having a plan is a good idea.
Set It Aside As An Emergency Fund
Compared to much of the world, Australia’s economy is extremely stable, but the future is extremely unpredictable (just ask all the journalists at Fairfax and News Limited). Putting money aside to help in the event of an unexpected crisis is always a good idea. You don’t have to tie the money up where you can’t get it; an online savings account will give you a better rate of interest and still allow easy access.
Take An “All Expenses Paid” Holiday
Getting your tax refund doesn’t have to be all work and no play. You need time to recharge, relax, and get away from the day-to-day, right? Consider using your refund as a set budget for a private getaway. Whether it’s a trip to a place you’ve always wanted to visit, a cruise to a tropical getaway, or just a nice night at a B&B, if the money is spent on you and your well-being, it’s not misspent. Just make sure to stick to your budget, and pick a destination or event that you’ll really love. If you plan it right, you can essentially walk away with a free holiday without even touching your regular budget.
Treat Yourself To A Modest Upgrade
When the new iPad came out, we talked about potential alternative purchases that were more impressive. Treat yourself to something affordable that will also make a big impact in your day-to-day life, whether it’s a new 1080p Apple TV, your own home-built HTPC, or a bicycle to get you out of your seat and into the open air.
One upgrade on that list that we can’t recommend enough is a solid-state drive (SSD) for your computer. We’re huge fans of replacing your primary hard drive in all of your systems with SSDs. They’re getting cheaper, and the performance impact you’ll feel once you have one in your system is hard to understate. You won’t be sorry. Photo by Joel Bez. [clear]
Replace An Energy-Sucking Appliance
A good way to get some ongoing bang for your buck with your tax refund is to replace an old clunky fridge, washing machine, water heater, or some other ageing appliance in your home with a more energy-efficient and money-saving model. Perhaps it’s time to consider replacing a few windows or upgrading your air-conditioning unit, or looking into solar. Home improvements that deliver long-term savings make much more sense than something that merely looks impressive.
Invest In Your Well-Being
If you’ve been putting off going to the doctor or the dentist because you were worried about how much it might cost, now’s the time to make that appointment. Been meaning to get to the gym but didn’t want to buy a membership until you had the money? Grab one now, or head to your local sports equipment store and look at some exercise gear for your home,
The same applies to things that are stressing you. If you’ve been putting off some nagging home or car repair, get it out of your mind with the money from your refund before you spend it on something fun. The benefit of having those stressors taken care of and out of your life will last far longer than the momentary pleasure of a new shiny toy. That said, if you can afford both, we recommend it! Photo by Phil Campbell.
Whatever you choose to do with your refund this year, make sure it’s a smart move for you, and if you do spend it, do something with it that’s memorable and leaves a lasting impact. Try to avoid using it to keep an unsustainable lifestyle afloat, or spending it on something that will only create more debt (like a car you can’t afford, or paying off a credit card you’re about to load up with purchases.)
So you’ve seen our suggestions — what are some of yours? What will you do with your tax refund this year? Let us know in the comments below.