According to the most recent data available, the average tax refund received by Australians is $2,574.
Given this is a reasonable amount by most standards, in one of our past animations, ‘Making the most of your tax refund’, we discussed several helpful spending suggestions for those of us that had received or were expecting to receive a tax refund for the 2016-17 financial year.
Importantly, the helpful spending suggestions that we mentioned are still very much relevant today. For example:
Importantly, in terms of the helpful spending suggestions listed above, it’s vital to take the time to consider what’s relevant to you and how the appropriate use of your tax refund this year (and in following years) could make a difference to you now (and into the future).
With this in mind, arguably one of the most successful investors of all time, Warren Buffett, has been quoted as saying, “The most important investment you can make is in yourself.” We explore this quote within the context of one potential option for making the most of your tax refund this year; however, it also has broader application regarding how you may wish to approach life in general moving forward.
Investing in yourself
When we talk about investing, often it’s centred on accumulating and retaining wealth through investments inside and/or outside of superannuation – with an appropriate application of investing fundamentals, such as diversification, asset allocation, risk versus return, and liquidity, compound interest and dollar cost averaging.
However, there is another important area of investing that we have occasionally touched on in the past through several of our articles, videos and learning modules…it’s investing in yourself. In our animation (mentioned above), we provided examples of investing in yourself, in both mind and body, and explained the positive
flow on effects of doing so from both a personal and work-related perspective. For example:
Please note: Another great way that you can invest in yourself on a personal level is by getting to know your Money Personality and beliefs on money, as well as increasing your financial literacy with the resources available on our Financial Knowledge Centre. Unlike the abovementioned suggestions, this may not cost you money (just a little time and effort). Furthermore, in terms of benefits, this can enable you to understand your natural personality preferences and beliefs on money better, as well as improve your knowledge of the topics that relate to your personal finances.
If you have received or are expecting to receive a tax refund this year, it’s vital to consider what’s relevant to you and how the appropriate use of your tax refund this year (and in following years) could make a difference to you now (and into the future). Importantly, we can help you with making this decision by taking the time to discuss with you helpful spending suggestions that may be appropriate to your existing financial situation, goals and objectives.
Consequently, depending on your personal circumstances, these suggestions may not include investing in yourself this time around as there may be other areas that require your focus right now, such as repaying debt or establishing an emergency buffer. However, it’s important to realise and keep in mind the benefits that can be derived from investing in yourself – as seen above, you may earn returns that last your lifetime.