It’s tax season again, which means many of you will receive a little extra money to play around with.
While it might be tempting to use the extra cash to splurge on that expensive pair of heels you’ve been eyeing, or that latest ‘must-have’ tech gadget, it’s important to start off with the seemingly less sexy option of settling outstanding debt.
Pay off your debt
This is arguably the most sensible way to spend your money. You should focus on settling debt that bears the highest interest rate, which is usually your credit card and personal loans. Making an extra payment towards your bond, regardless of the amount, will help reduce your repayment time-frame in the long run.
Boost your retirement and emergency savings funds
If you’re in the enviable position of being debt-free, consider putting a portion of your windfall towards buffering your rainy day fund as well as your retirement savings.
According to universal standards, having a savings account that contains approximately six-months worth of living expenses is considered a healthy rainy day fund.
Pay premiums or monthly subscription fees once-off
Opting for a once-off annual payment option on life or car insurance premiums, monthly subscription fees like DStv, or something sensible such as school fees could actually save you a bit of money. Most insurance companies charge a monthly transaction fee, which you can avoid if you pay a lump sum.
Similarly, schools generally offer discounted tuition fees to parents who make a single payment at the beginning of the year, and the same goes for a DStv subscription.
Invest in your career
Personal development is an area many professionals neglect to their detriment. Remember to set money aside to pursue training courses that will develop your skills set and ultimately set you up for a promotion, or even prompt you to change careers and improve your earning potential.
But let’s face it, you work hard for your money after all and deserve to spoil yourself a little.
As the saying goes, all work and no play makes Jack (or Jill) a dull boy (or girl). It’s important to maintain balance in your life, so take the opportunity that a tax refund offers to do something you might not ordinarily consider.
Treat yourself to a holiday
While the Bahamas or Caribbean might be a stretch, make sure you book that holiday away – even if it’s locally.
Do your research and shop around for the best season and travel dates that will allow you to get the best trip for your money.
Do those home renovations you’ve been dreaming about
With bigger daily concerns to consider, home maintenance issues are often relegated to a ‘when it’s absolutely essential’ status.
Why not give your house a new coat of paint, fix your roof or splurge on those electronic appliances that will spruce up your kitchen.
We all have varying ideas about what pampering entails; the important thing is to do whatever makes you happy.
Whether it’s a day at the spa or buying a cost-saving gadget, (you can argue that digital subscriptions and online shopping is cheaper), celebrate your hard work in style.