Five grown-up ways to spend your tax return

We all love the dopamine hit when those tax return dollars hit our bank account. You immediately visualise all the ways you can spend the windfall.

But, before you start tapping your card left, right and centre, consider funnelling some of your cash injection responsibly so your future self will high-five you.

1. Clear out the blockages 

One responsible approach is to square away any nagging consumption debts such as credit cards, personal loans, or even that pesky HELP loan.

I think about your money flow like your body’s circular system. Your body needs blood to pump it around to keep you fit, keep your immunity up, build muscle, and so forth. If your body has blockages and your blood can’t pump around, you will be tired and generally unwell.

It’s the same with your wealth progression, particularly your money flow.

If you’ve got blockages in your cash flow, it can seriously hinder your ability to thrive financially.

Prioritising paying high-interest debts can help you flush out the blockages to free up cash flow to improve your financial well-being.

2. Build your cash floor

One of the critical mistakes I see people make is not having a financial buffer, or as we call it, a ‘cash floor’ for emergencies.

Money is coming in and going out, and none is sticking to the side.

So, they use credit as their ‘cash floor’ when the unforeseen happens. 

The cash floor is the pot of money you set aside that you don’t touch until something unexpected happens and you need cash quickly.

It’s your emergency piggy bank.

When the fridge carks it, you need to get a new engine for your car, or your beloved pet needs an emergency operation, you dip into your cash floor rather than pulling out your credit card or borrowing money from your in-laws.

3. Invest in yourself

This is always a wise choice. 

Furthering your education or acquiring new skills can boost your career prospects and possibly lead to more income or job fulfilment.

You could use your tax return to enrol in a course or a workshop you’ve had your eye on for a while.

Investing in yourself and expanding your knowledge and skillset can pay significant dividends.

4. Look after ‘Uncle Ron’

If you already have your cash floor, consider putting some money aside for later on or ‘Uncle Ron’. 

Albert Einstein called compound interest the ‘8th wonder of the world.’

Albert was spot on. Compounding is magnificent when it gets going and creates a snowball effect.

The key is to get started and be consistent.

If you started with $2,800 and invested $10 per day in the Australian Share Market, your total investment would grow to $61,861 in 10 years*. 

Extend this to 20 Years, and your investments should grow to $192,955.

Extend this to over 30 years, and this grows to $483,938.

[*Assumptions: 8% interest rate, compounding monthly. See Money Smart Compound Interest calculator].

The sooner you start investing, the longer you have the power of compounding to work its magic.

For more about getting started with investing, download our Investment Playbook.

5. A sugar hit

While we encourage you to be responsible with your tax return flush funds, we are also big believers in balance – enjoying your money now (guilt-free) and making smart moves for your future.

We all deserve a sugar hit now and then.

So, once you’ve funnelled some of your tax return dollars to the responsible actions above, reward yourself with an experience.

Some of my best memories, both from childhood and my adult life are the experiences that I’ve had. 

Whether that be a family holiday to QLD or even just heading to the ‘G’ to watch a game of footy, these are the things that I look back on fondly, and that keep me motivated and rejuvenated.

Receiving a tax return can create a great opportunity to make fun and strategic decisions. 

But, everyone’s situation is unique, so it’s important to assess your priorities and make choices that align with what’s important to you.

Cheering you on!


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Financial Advisor Geelong.


This is not tax advice. This is general advice only. Your personal objectives, needs or financial situation have not been considered when preparing this information.

You should consider the appropriateness of any general advice we have given you and, if necessary, seek advice before acting on it.

It’s always recommended to consult with a qualified tax professional to maximise your tax position.

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