If you’re one of a number of Aussies receiving a tax return this year, it means you’ve overpaid in taxes throughout the financial year, however the cash back at tax time may be music to your ears.
After all, the average return according to figures is around $2,800, with more people than last year indicating that they plan to save the money.
We look at some of the ways people intend on using their tax return in 2018 and some potential ways you too could use your money to get ahead.
How people intend on using their tax return
According to a Finder survey of more than 2,000 Aussies, the most common ways people said they’d use their tax return in 2018 was towards:
- Savings – 46% (up from 31% last year)
- Household bills – 17% (down from 23% last year)
- A holiday – 11% (down from 12% last year)
- Home loan repayments – 7% (down from 10% last year)
- Invest it – 5% (up from 4% last year).
Other ways you could use your money
Pay off your education debt
According to government estimates, the average debt for a tertiary student in Australia is currently $19,100, with the average time taken to clear that debt more than eight years.
For many, making a dent in their loan or paying it off in one fell swoop will be a great idea, but given the low-cost nature of Australia’s higher education loan program, maintaining compulsory student repayments while addressing other debts or financial goals could also be worth investigating.
Create an emergency fund
Given more than one in two people wouldn’t have enough savings to last three months if they lost their job tomorrow, an emergency fund could provide peace of mind when it comes to unexpected bills.
It may also reduce the need to rely on high interest borrowing options, such as credit cards or payday loans, which can often be an expensive form of finance and create unwanted debt.
Put it into super
Contributing a lump sum of money into your super fund may be a good way to grow your retirement savings as what your employer contributes (if you’re eligible) mightn’t be enough for you to live on comfortably after you finish working.
Other benefits of contributing to super, depending on your circumstances, may include favourable tax treatment, or other financial incentives from the government.
Also note—the value of your investment in super can go up and down, contribution caps also apply, and there are rules around when you can access this money.
