get the most out of tax

10 ways to get more out of your tax refund

Posted  August 11, 2015

Are you one of the many fortunate South Africans who received a tax refund in the 2014-15 tax year? If so (or if you’re still hoping to get one), you may be wondering what to do with this surprise mid-year bonus. 

You’ve probably heard about all the things you SHOULD be doing – like paying it into your bond or clearing your other debts or investing it – but what if you could make your refund work for you? What if you could use the money to create value that’s greater than the couple of hundred or thousand rand that SARS deposited into your bank account?

Here are ten ways that you can use your tax refund to make it count for more.

1. Skill up to earn moreYou’ve heard that saying, “learning is a lifelong journey.” Well, now you can buy your ticket for the ride. Whether you buy a short course to enhance your IT skills or save towards a longer-term qualification, an investment in education is one of the best you can make.

2. Buy a memoryIt’s often said that the best thing to spend money on is an experience rather than a possession. Broaden your horizons by spending your tax refund on a special experience for you and your family, whether it’s a sporting event or the start of a fund to send you to some exotic destination. Make it an experience you’ll never forget.

3. Make a difference in someone else’s lifeIf you’re paying tax, that means that you earn more than 90% of South Africans. While your tax return may seem like a small amount to you, remember that it takes only a few rand to feed a child or to provide them with a Christmas they’ll never forget through charities like AddHope or Santa’s Shoebox. Consider donating your refund to a worthy cause and touch someone’s life today.

4. Save for something you really wantJust think how great it would be to avoid going into debt on your next big purchase. Open an account to start saving for something you’ve been dreaming about, like a retro scooter, a work of art by your favourite local artist or that piece of designer furniture that you’ve always wanted in your lounge.

5. Don’t do anything… for now There’s no rule that says that just because you have extra money, you have to do something with it immediately. Stop, breathe and give yourself the space to think about the right way to spend or save it.

6. Use it to improve your homeVery few houses are perfect just as they are, no matter what the estate agent said. You may need to repaint your roof, sand your floors, replace your curtains or fix a leaking loo. If you have a looming home maintenance task that you’ve been putting off, put it off no longer now that you have the funds.

7. Invest in a second incomeMost people have a big idea to earn extra money. If capital is holding you back, use your tax return to buy the home computer, big cooking pot or fancy camera that you need to get your small enterprise off the ground.

8. Replace a piece of energy-sucking equipmentThere is an energy crisis globally, and an Eskom crisis in South Africa. We should be doing all we can to reduce our power consumption and cut costs. You can use a few hundred rand to replace all the lightbulbs in your house with LEDs or a few thousand to buy a solar geyser – and the beauty is that these investments start delivering measurable returns as soon as they are installed.

9. Visit a financial advisor, tax consultant or estate plannerMost people aren’t being as clever or efficient with their money as they could be, or planning sufficiently for their future or their family’s security. If you’ve been putting off visiting a financial advisor, tax consultant or estate planner, make an appointment today!

10. Buy chocolate If you only received a small tax return, that’s OK. Buy chocolate. Chocolate will never let you down. And if chocolate’s not your thing, then do something cheap but cheerful that will remind you that while your taxes helped build our nation, you got something out of it too.

The difference you can makeWhatever the size of your tax return and however you choose to spend it, do it with forethought and intention and you will be sure that even a few hundred rand can make a big difference in your life, in your family’s or in that of a stranger in need. That will make your year’s hard work worthwhile.

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