Now that the tax return deadline is over, you may be dreaming about what you’ll do with your tax refund from SARS. Here are some smart choices.
If you’re lucky enough to receive a tax refund, the best you can do is immediately reinvest the money or settle some debt. Instead of seeing it as a gift to spend on the things you want, see it as an opportunity to create wealth.
Invest wisely
Even the smallest of tax refunds can be put to good use if the correct investment is chosen. This could mean retiring a few years earlier or treating yourself to a trip abroad, instead of blowing your entire tax return now on luxuries or a short-lived experience.
Save smartly
Saving might not be as much fun as shopping and with all the financial challenges you may be battling through at the moment, the idea of saving money may not feel very realistic. However, depositing a tax refund into a savings account is the perfect opportunity to start saving without taking a chunk out of an already stretched salary. Most financial experts recommend that you have the equivalent of at least six months’ worth of expenses stashed in a savings account for an emergency.
Fix up your finances
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- Reduce debt. Everyone wants to get rid of debt, and that tax refund gives you a big opportunity to do so. If you owe money on credit cards or loans, consider clearing all or part of the debt with the highest interest rate.
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- Consider a prepaid debit card. Instead of being linked to a bank account or having a credit card, prepaid cards, such as a Visa or Mastercard, offer you convenience and control as the amount you can spend is limited to the amount that you pre-load onto the card. Prepaid debit cards look just like normal credit or debit cards, carrying all the same features (such as the card number, expiry date and security code). They are easy to use, widely accepted, safe and convenient.
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- If you’re planning on putting your house on the market, consider increasing its resale value by using your tax refund to invest in some improvements. Ask an experienced estate agent what renovations would help you sell your home for the greatest price.
Whatever you plan to do with your tax money, be patient while you wait for your refund.
Sources
http://www.inquisitr.com
http://www.neamb.com
http://www.property24.com