It’s that time of year again. If you’re due to receive a refund this this tax season, you might wonder what to do with the extra dough. Here’s how to get the most out of your refund.

Your tax refund can feel like ‘found money,’ and treating it as a windfall is pretty tempting, but it’s worth considering what you want before you indulge.

Achieving a financial goal is a great way to lead to long-term peace of mind. Let’s look at five ways to get the most out of your next tax refund.

You might also like:
> Money reset: 8 hacks worth tackling this new financial year
> Getting ahead: Why can’t I save money?
> The cost of living is going up: Here are 19 quick ways to lessen that burden

#1 Buy yourself some breathing room and pay off your debt

Paying for things you’ve already bought on a credit card doesn’t exactly spark the level of joy that buying new things does. But here’s the thing. No matter how you pull it apart, debt weighs you down. What could you do if you were debt-free with no more regular payments?

If you have big savings goals, you could kickstart that house deposit without pressing repayments holding you back. You could even start travelling more. All of us could do with better sleep – and less/no debt is a great way to reduce your nightly stress about impending expenses.

So if you’re wondering what to do with your tax refund, consider the actual costs of your outstanding debt. Narrow down your debt with the highest interest rate (it could be a credit card or a car loan) and send that refund there to buy yourself some breathing space. 

#2 Protect yourself against uncertainty with an emergency fund

The cost of living is rising, and whether it’s medical, transport or home-related, the chance of you running into a $1,000 sudden expense isn’t low. Here’s the thing. By definition, financial emergencies are pretty damn stressful. Worse still, if they happen when you’re unable to pay for one, you’re facing a harder time again. 

If you haven’t already started your emergency fund (more on those here), open a savings account and allocate your money here. This is a good way to protect yourself against life’s uncertainties.

#3 Get a month ahead of your paycheck

You might call it a financial cushion or a buffer, but the point of this plan is to have more money in the bank than you need. It’s not a quick process, but you do it month by month and budgeting. It’s a low-stress way to live if you can make it work.

The idea is that you get to a point where you have five bills due on the same day, and you pay them without batting an eye. The idea is that you shouldn’t need the money that comes in today. Effectively you’re paying with cash you earned last month because you put a paycheck in the bank for safekeeping. And if that sounds impossible, remember you just got a tax refund.

#4 Invest in some shares

Did you know more than 2,000 companies are listed on the Australian Securities Exchange (ASX)? Be wary of putting all your eggs in one basket, of course. Look for ways to diversify your share investments and mitigate the risk of market volatility. 

Consider an exchange-traded fund (ETF). ETFs are listed on the stock exchange. Units in an ETF can be bought and sold like shares through a broker. They’re a relatively low-cost entry method into markets that might be otherwise tricky to access. ETFs are a good way to get more diversity across different markets.

You might also like:
> Saving up: Why it pays to have an emergency fund
> Sitting pretty: 4 reasons renters smile at rising interest rates
> Love Afterpay? We do too. But could it affect your chance of buying a house?

#5 Think about topping up your super

If you’re young, you might not be thinking about retirement, which is fair. But here’s the thing. Your life expectancy and the cost of living are both on the rise, which means that by the time you retire and want to live it up, you will need more cash.

Boosting your superannuation early is a great way to let your savings grow. That said, be mindful of caps and tax implications, so have a chat with your accountant before you make any additional contributions to your nest egg.

You’re also worth investing in. So if there’s a course or a new hobby you’ve wanted to try, invest your refund in some personal growth. Whether looking for a new qualification or certification, your tax refund can help you kick some serious career goals. 

It’s easy to get complacent and comfortable in your career, but get intentional about your perfect job, hours and life and map it out. Then invest the time and money you need to make it a reality.

The final word

Whether you’re looking at a significant refund or a little drop in the bucket, a little strategy can make your money work for you and improve your financial situation. 

If you’ve already earmarked some of your funds for spending, that’s fine. Give your money purpose, think about your goals and use your tax refund to get there faster. is Australia's largest company dedicated to renters and is owned and operated by ASX-listed Limited (RNT:ASX). For over 15 years, has exclusively focused on making renters' lives easier by making it easier to find a property, secure it, move in and pay rent.