Thanks to former Prime Minister Gillard’s recent reforms, most students will be receiving a sizeable lump sum come tax return time. As we gleefully eye our suddenly swollen bank accounts, we’ll almost inevitably be sucked into the intoxicating and dangerous illusion that we’ve magically become boundlessly wealthy. Cue carefree spending, upbeat shopping montages and senseless splurges on holidays to the Gold Coast.
But the hard and sad truth is that we’re not rich, our spending isn’t carefree, and in a couple of days we will most likely wake up with a horrendous tax return hangover, holding nothing but handfuls of loose change and wondering if that memory of a shiny lump sum is just a half-remembered dream.
The good news is that it is possible to change tax time spending habits and avoid post-payout poverty. The key is in recognising mistakes before you make them. Here are some of the dumbest, most common tax return splurges and some spend-savvy alternatives.
When that chunky lump sum appears in your bank account, curb the urge to immediately hit up your local Westfield. A spontaneous shopping spree is going to burn through your cash quick smart, and more than likely leave you with a nasty case of buyer’s remorse.
Instead of spending all your tax return in one big capitalist spend, try setting aside just a small portion of it, and locking the rest up in a high interest savings or term deposit account. Some top savings account options include:
And these are a couple of our top term deposit picks:
This way, getting your retail fix won’t break the bank, and you will have made a fairly responsible investment in your financial future.
A surprisingly large number of people see the windfall of a tax return as a great gambling opportunity. But here’s a heads up. No matter what you bet on – whether it be horses, the Labor leadership, or Tom Waterhouse’s next career move – nothing is certain, and nothing is worth losing your hard-earned over, especially if you’re a cash-strapped student.
If you’re desperately hanging out for some fiscal thrills, or if you are absolutely adamant that you have to try make more out of your tax return, consider investing in shares instead. They are, almost invariably, a less volatile and unreliable way to gamble your money, and they can quite often turn out to be a great long-term investment.
It’s semester break, your tax return has just come in, and a boozed-up week at a dodgy rented beach house is calling your name. There’s no denying it could be a good opportunity to let off some steam with mates, but before you drop your dough on the exorbitant bond, consider saving it up for something a little more special. What about a European adventure at the end of the year? A romantic getaway for your anniversary? A post-degree gap year? Think twice before spending.
The key to buying gadgetry is learning to look past sleek designs and matte finishes, suppress desire and focus on delayed gratification. Yes sirree, that new iPad is mighty fine, but it comes with a pricetag to match. Hold back for a couple of months to get a better deal and save some of that precious tax return. Also consider buying online from sites like kogan.com, or using comparison sites like getprice.com to track down the best possible price for your shiny new toys.
Exams are done, semester break is here and it is well and truly time to cut loose. And although the timely arrival of your tax return might seem like a sign from the partying gods, don’t be sucked into blowing the whole lump sum in a bender of Great Gatsby proportions.
But you do deserve to let off some steam, so withdraw just enough of your tax return to give you a great night out. Transfer the rest into a high interest savings account, and be sure to leave your ATM card at home when you head out to prevent the 3am “I definitely need to buy all my mates kebabs now” withdrawal.
How have you made your tax return go further? Let us know by leaving a comment below.