5 smart ways to use your tax refund

Tax time is amongst us, and it’s the perfect time to think about how you’ll use your tax refund. You may be itching  to learn a new set of skills or simply want to boost your emergency fund to prepare for any financial mishaps that may happen in your life.

COVID-19 has had a great impact on the finances of Australians with those unfortunately losing work or relying on government support payments to get them by. This is why it's important to look at your options if you're expecting to receive a tax refund this year.

If you're stumped in finding ways to effectively use the extra money, we provide five smart ways to use your tax refund.

Money-smart uses for your tax refund

1. Invest in your education.
2. Boost your savings.
3. Make a donation to your favourite charity, 
4. Start your own business or side hustle.
5. Put it aside for gift-giving.

1. Invest in your education.

You may have been eyeing on a particular course at Upskilled and love the added benefits of studying online. If you want to move up the ranks in your career, or simply have the passion for learning, investing in your education is a great way to spend your tax refund. 

Not only will you have the opportunity to upskill, a qualification can improve your employment prospects and can even give you the added benefit of feeling a great sense of accomplishment when completing a course.

Did you know that Upskilled provides a discount of 15% when you pay your course fees upfront? You won’t have to worry about adding in another repayment schedule in your bills, and you’ll have plenty of courses to choose from in IT, business or community services.

Since you can undertake the qualifications online, it can help you juggle study with work and other personal commitments.

Investing in your education gives your life a sense of purpose and direction, especially if you’re itching for a career change. Either way, you'll potentially get a Return of Investment (ROI) with studying as it can help open up doors for you.

2. Boost your savings.

Your savings account may be on the low and needs a bit of a top up, or you probably don’t have any savings to put towards emergencies for that matter. It’s a good idea to put your tax refund in a High Interest Savings Account (HISA) because not only is it a low-risk investment, you get to see your money grow with bonus interest being added month-on-month (depending on your bank).

In addition, a tax refund can kickstart the momentum you need when picking up good saving habits. This helps you make empowering decisions on money, spending less on useless things and saving more.

In fact, you may be in your 20s wanting to give your super a boost too. Not only is it a clever way to use your refund, but compound interest gets better with time, making your ROI in savings even larger.

3. Make a donation to your favourite charity.

It's important to give back so why not donate some of your tax refund to your favourite charity? You may be passionate about a certain cause like mental health or want to support charities that share your vision on a particular social justice issue.

Either way, your tax refund can benefit these organisations to continue doing great work, and they'll be able to do so thanks to your generosity. Most charitable donations are tax-deductible so don't forget to keep your donation receipts when you file for your next tax return!

4. Start your own business or side hustle.

Have a passion project you’d like to invest more in? While it’s hard work, sometimes having a project on the side is worthwhile. You may have been thinking about turning it into a full-fledged business but don’t have money to spend on the resources to grow its hidden potential.

With your tax refund money, you can choose to invest in your side hustle and have some kick-start money for your business. It can be tough to start and grow your own business but if you’re smart when it comes to your tax refund, you can use it sparingly and be knowledgeable about a start-up’s non-negotiable expenses.

You may want to start a business but don’t feel comfortable running one unless you have the skills needed to be good at it. Upskilled offers the BSB40320 - Certificate IV in Entrepreneurship and New Business, which is ideal if you want to develop skills and knowledge in running a small business. It'll teach you how to manage finances, draw up business plans and establish and maintain business relationships.

The ROI in starting your own business doesn’t come without its risks but if you’re strategic enough, your tax refund money could be the reason for its starting success.

5. Put it aside for gift-giving.

Do you get stressed when it comes to getting Christmas and Birthday gifts? Your tax refund will come in handy if you put it away for special occasions where you plan on gift-giving to family and friends. The costs of gift shopping can really add up and may cause you financial stress if you're not careful with your budget.

Setting aside your tax refund for gifts can help you spoil your loved ones guilt-free!

Want a larger ROI on your tax refund?

Investing in online education is a great way to make the most of your tax refund. With the flexibility of online study, you can study anywhere at any time.

Upskilled has plenty of courses to choose. You can read some of the success stories where past students have either felt “job-ready” when completing a course, or how further study has helped them progress into a better job.

If you’re ready to study and are keen to spend your tax refund on a qualification that can provide meaning and purpose, start your course search and contact one of Upskilled’s friendly education consultants today.

This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances. 

Editor's note: This article was originally published in June 2019. Content has been revamped and updated for accuracy and comprehensiveness.