Getting a tax refund, bonus or inheritance

Money Smart
(ASIC)
Last updated: 29 Jan 2019

Top tips to make the most of your windfall

If you get a tax refund, bonus or inheritance here are some smart ways to use this money that will give you long-term benefits.

Pay off your debts

You could use this money to pay off any short-term loans or credit card debt you have. Or, you could use it to reduce your personal loan or mortgage.

Smart tip

Pay off higher interest debts like payday loans or credit cards first.

If you have more than one credit card, pay off the one that charges the highest rate of interest or the smallest debt first. For more information, see our webpage on how to pay off multiple credit cards.

Paying off debts means you’ll pay less interest and save money. Find out how you can reduce your debts faster by making extra repayments.

Work out how much you’ll save in interest by making extra repayments.

credit card calculator

Create an emergency fund

If you don’t already have one, start an emergency savings fund. Open a high interest savings account and, if you can, aim to build up 1-3 months’ worth of living expenses, so the next time life throws you a curve ball, you’ll be ready to face it head on.

Compound interest will help your money to grow. For example, $3,000 in an account earning 3% interest would grow to $3,485 in 5 years’ time. If you deposit extra money into this account, your savings will grow even faster.

See how compound interest increases your savings.

compound interest calculator

How Australians spend their tax refund

Contribute extra to your super

Making extra contributions to your super can really boost the amount of money you’ll have to l