How not to waste your tax return
So what are you doing with your tax return and why its likely not to be what you think!
In a mini survey I have done most people who are getting a tax return want to save some of it.
Half tell me they are likely to spend most of it on either paying out debt or just shopping in general…so what would you like to do with it and as always my big question is how are you planning to do it?
The easiest way to achieve a goal is to automate your behavior around it as much as possible – or create a new habit around it.
James Clear in Atomic Habits is all about creating the environment around the habit rather than just relying on willpower – so have a read if you have not already!
So what is the environment you need to create in order to achieve your goal.
Lets say you decide today that you want to save or invest half your tax return and use the other half to buy a new washing machine.
You have estimated your return to be $2000 and therefore want to put $1000 to the purchase and $1000 into savings.
If you have a savings account set up is it connected to your everyday account so that you can easily transfer money in and out – my problem is that I spent more time transferring in and out than I needed to.
My trick was to get a micro investment app connected to all my accounts – always separate and take two or three days. I am not here to tell you what to do - even an online savings account at a different bank than your normal bank can do this for you!! Do look into what returns they are getting – savings accounts are pretty low.
Of course another form of savings is to an additional payment into your super – you can’t get it back but it will give a little kick to your retirement – it looks like this if you assume 8% return over 30 years. (Note this is not personal advice - I don't know you!! Its just an example)
I used money smart to see the compounding affect of $1000 a year
Your actions from this are:
Chose what you are going to do
Create the environment you need to do it –
set up the savings account
start the micro investment app
contact your super and find out how you make an additional payment
THEN go to your bank account that will receive the tax return and set up the payee so that its all ready to go when the money pops in – that way you can just do it straight away.
Now about that washing machine!!!
With any large purchase I do a bit of research first – the washing machine –search on line, then go into your local retailer and again set it up. Ask about price, delivery and timing for your purchase.
This sounds like its going to take ages but it does not take much time up all. Do a quick search on line and find what you want and how much it will be, then go shopping!
I had no idea you could get a further discount at a shop until my Mum came with me while I was buying a washing machine and she talked them down by about $220…and free delivery.
Get the best price / deal and set up what it is you are going to do.
If you create the environment prior to doing anything you are way more likely to do it!
Good luck!
Phoebe x