Saving your tax return wisely or getting the most out of your shopping spree? We've got some tips for you

Many people are already planning what they'll do with their tax refund money. Shopping? Holiday? Bills?

We've spoken to a couple of experts and thought we'd share a few ways to help you either save those funds wisely, or get the most out of your shopping spree.

Savvy people are saving their refund wisely

The Australian Tax Office estimates the average tax return is over $2,000*. Heritage's Head of Wealth Management, Richard Herbst, says most people treat their tax refund money as a windfall and blow it. "There are some really smart ways to use tax refund money, depending on your circumstance. The obvious ways are through reducing any personal debt, or saving it."

1. Reduce your home loan

If you have a 25 year home loan, a one-off $2,000 lump sum repayment on a $300,000 loan at 5.19%pa could save you over $4,000 in interest over the life of your loan (without including any costs that may be incurred for lump sum payments), and would end your loan term three months earlier1.

2. Pay off your credit card

The average Australian credit card debt is $4,700^. If you are aiming to pay down your credit card balance, put your refund onto your credit card. If you have a credit card debt of $4,700, you could save over $2500 in interest and you'll wipe your credit card debit 14 years sooner than if you were just making the minimum repayment2.

3. Save it

If you consider stashing your tax refund in a high interest savings account like our Online Saver, your annual tax refund could grow to over $26,000 in just 10 years if you chose to save your $2,000 refund each year3. That could buy you a new car, a great overseas holiday or help with your home renovations!

Go shopping and find some bargains

Let's be honest, using your tax refund for a little splurge is a great way to reward yourself for all your hard work throughout the year. Remember to shop around to get the best price on whatever you are planning to buy.

  • Support your local businesses - local stores are often very competitive with price, and you have benefit of being able to see and feel the item you're buying. Plus you get hands-on personalised service and advice.
  • Shopping online with your Heritage Visa debit or credit card comes with its own benefits, in that you can often get a cheaper price, and you're not restricted by your location. It's a great way to shop in London, New York and Paris, without paying the airfare! To get you started, here are some of the most popular online shopping sites used by other Visa card holders:

Fashion

urbanoutfitters.com
asos.com
victoriassecret.com
topshop.com
netaporter.com
evolveclothing.com

Sports wear

eastbay.com
drjays.com

Beauty

sasa.com

Books

bookdepository.com

Whether it's a new pair of shoes, watching your account balance grow or slashing your personal debt, we hope you make great use of your tax refund. If you'd like more information about using your tax refund to help reduce your personal debt – or saving it – talk to us today. We can even make an appointment with one of our financial planners for you, and your first consultation is free.

*According to www.etax.com.au

^According to www.moneysmart.gov.au

1 This is based on a 25 year loan term at an interest rate of 5.19%pa, with extra contributions commencing one year after commencement of the loan. The results are only indicative. Actual loan repayments will differ depending on your individual circumstances, the product you select, the loan amount you borrow and any fees.
2 This is based on a credit card with an outstanding balance of $4700 ,an interest rate of 16.75%pa, with the minimum repayment details being $10 or 3% of the outstanding balance .The results are only indicative. Actual repayments will differ depending on your individual circumstances, the product you select, the outstanding balance and any fees.
3 This is based on contributing $2000 per annum into an accountw ith an interest rate of 3%pa over 10 years .The results are only indicative. Actual amounts will differ depending on your individual circumstances, the product you select, the balance and any fees.
Any loan applications are to approved applicants only. Fees, charges and conditions apply. Please also read the Guide to Heritage Deposit Products (available in branch, by phoning 13 14 22 or heritage.com.au) and consider whether any product described is right for you. This information has been prepared without taking into account your objectives, financial situation or needs.
Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs. You should also obtain personal investment and taxation advice before making any decision relying on the information provided. Heritage Bank Limited. ABN 32 087 652 024. AFSL and Australian Credit Licence 240984. DMS 1307081A

* Home loan comparison rate based on a $150,000 loan over 25 years.  Fixed loan comparison rate applies only for loans with an LVR of 80% or less and a loan amount of $150,000 to $249,999.  WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Interest rates are on a per annum basis. Rates are correct as stated and subject to change without notice. Rates shown are for new loans and do not apply to switches or internal refinances.

Home Advantage Variable rates include discounts shown from the Standard Variable rate. Home Advantage Living Equity rates include discounts from the Living Equity rate. Discounts are based on total lending in the package. Discount Variable LVR rates are for new lending and include discounts from the Discount Variable Loan Rate.  Discounts are not available in conjunction with any other interest rate discount or special offer. All fixed rates are fixed for the period stated and revert to the variable rate applying at expiration of the fixed term. To approved applicants only. Conditions, criteria and fees apply.

Loan to Value Ratio (LVR) is the loan amount divided by the value of your security property (determined by Heritage Bank at assessment), multiplied by 100. Owner Occupied loans have a maximum LVR of 95%, Investment loans have a maximum LVR of 80% and Living Equity has a maximum LVR of 80%. Heritage is not accepting any new investment applications until further notice.

This advice has been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs.

Generate a personalised Key Fact Sheet based on your loan amount, term and repayments. This tool is provided to help you compare home loans from Heritage with other financial institutions.

The information provided is intended as general information only. Blogs have been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs. You should consider obtaining personal investment, taxation and/or legal advice before making any decision.  Please consider the Guide to Heritage Deposit Products and Guide to Heritage Credit Card Products (available in-branch, or at www.heritage.com.au) before you decide whether a product is right for you. All loans and credit cards are subject to application and approval. Conditions, criteria and fees apply and are subject to change without notice.