Five ways to turn your tax return into even more money

Andrew Munro 26 July 2016

tax returns

The average Australian gets between $2,000 and $3,000 from their tax return.

It’s not enough for you to quit your job and travel the world, but it’s more than enough for you to make some creative financial moves and turn it into even more money.

We’re not talking about hitting the stock market. Here are five much more sensible and interesting things for you to spend your tax return on which will usually give you a much quicker return on your investment.

1. Make your home energy efficient

If you’re one of the many people who has avoided going energy efficient because of the cost, this is a great time to do it. As a statistically average Australian, you’re pumping a solid 40% of your energy bill into heating and air conditioning. This is almost twice as much as the runner-up (water heating, at 21%).

The good news is that your tax return is more than enough to make a huge difference. Unless you have an particularly big or complex house, you can spend it on professional, high quality insulation installation. This will keep your house warm in winter and cool in summer, taking a huge bite out of your energy bill. If you don’t mind a bit of DIY, you’ll also have enough left over to get double glazing, which is basically window insulation, on most or even all of your windows.

With double glazing and good insulation, you won’t need to run the heater or air-con anywhere near as much. The average electricity bill for a household in Australia is estimated to be $1,690, so reducing that by as much as 40% means insulation and double glazing pays for itself within a few years. After that, it’s extra money in your pocket.

2. Go crazy with bulk buying

One of the greatest possible investments anyone can make is an industrial sized truckload of toilet paper. Or anything else that won’t go off and you’re guaranteed to use. Make sure you have enough storage space and stock up in bulk. Use coupons and other discounts for truly jaw dropping prices. To find out exactly how much you’re saving, compare the price per unit of bulk packages and smaller packs. For a bit of inspiration, think about these:

  • Toothpaste, shampoo, soap and diapers. These can be relatively pricey if bought individually, meaning you can save big with bulk purchases. They are compact, always useful and have a near limitless shelf life. Make sure it’s the right type for you and resist the temptation of buying unproven products en masse just because they’re the cheapest.
  • Food like dry rice, pasta, oatmeal, canned goods and similar. A few extra large heavy duty tupperware containers can make storing them easy, and it’s nice to know there’s always food around the house.
  • Office supplies, light bulbs and gift cards. These will often be sold in bulk at great prices, and if you go through a lot of them, or have a lot of people on your gifting list, they can be an incredible money saver.

You haven’t lived until you’ve walked out of a store with a trolley full of nothing but pasta. If space is limited, consider sharing the bounty with friends and family, and consider having them share their own bounties with you.

3. Repair anything you can

The longer something stays in a state of disrepair the worse it gets, and the more it will eventually cost to fix it. The most obvious things to fix up are your car and your house, but this also applies to dental work and skincare. In the long run it’s cheaper to fix problems sooner so don’t put it off.

Car repairs can improve your mileage along with overall vehicle safety and lifespan, while home repairs such as rising damp fixes will bolster the value of your property and prevent extreme damage down the line. Appliances are also a good option, but always be realistic about when it’s time to throw in the towel and buy a new one. No matter how much sentimental value your washing machine has, it will eventually be time to say goodbye.

Dental work should also be near the top of your list. It’s better, and cheaper, to get a root canal or fillings than a full tooth replacement. It can also help you in your professional life because nothing wins clients over like a gleaming smile. For extensive dental work and a bit of adventure on the side, you can always think about dental tourism, where you go overseas for inexpensive and high quality treatment. Consider minimising the risk by putting some of your tax return towards dental tourism insurance.

It’s usually worth avoiding the cheapest dental crowns and bridges because they have a higher risk of complications and a shorter lifespan, but there’s no need to go for the priciest choice either. Using your tax return to get sensible dental work done well is a smart move.

4. Refinance your home loan

Refinancing your home loan is when you switch to a new home loan, either to a different option from the same provider, or an entirely new company. You can consolidate your debts, find better interest rates, seek, flexibility, take advantage of temporary special offers and more.

This can bring exceptional savings in the long run, but also carries some up front costs in the form of a stack of different fees, which prevents a lot of people from switching. In Australia the total cost of refinancing a home loan usually comes out to about $1,325. If you’re thinking of refinancing your mortgage.

These fees are sizable amount of money, but are often a drop in the ocean next to the total lifetime costs of a mortgage. Fortunately, it’s pretty easy to find out whether or not this will be worth it in the long run. Learn all about refinancing home loans and take advantage of convenient mortgage refinancing calculators to find out exactly how much you could be saving.

If you’re being held hostage by a subpar home loan, buy your freedom with the tax return. Work out how much you could be saving, and you might discover that it’s an incredible investment.

5. Spend it on education

Are you looking for a new skillset? Your tax return alone is more than enough to make it happen. Upskilling is an investment in yourself, and will potentially provide greater returns than anything else. If you already have the skills but need to prove it, you can put your tax return towards certification exams.

There are courses for almost anything you can think of and it’s typically cheaper to pay up front than in installments. Setting aside your tax return as a personal education fund lets you think about what exactly you want to do and which skills will be most valuable. There are also a lot of ways to save money on education to take multiple courses and discover a job you love.

TAFE is a great option, and your tax return can get you certified occupational skills in everything from civil engineering to plumbing to hairdressing. Apprenticeships typically start from $2,000 and carry incredible career potential, so they’re definitely worth considering.

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