5 things you shouldn’t do with your tax refund

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It’s that time of year when many of us eagerly await our financial ‘bonus’, an anticipated refund from the tax man. We spend hours daydreaming about the ways we could spend the money, and it’s easy to justify a bit of a splurge to ourselves, but is that really the best use of this sudden windfall?

Below are five ways to spend this extra money that, if you don’t want to waste your refund, you should probably avoid:

1) Putting it all on black at the casino

We’ve all dreamt of winning big at the roulette table in one of those I-can’t-believe-my-luck moments. But that’s just it – it’s pure luck, or chance. We know the odds are stacked against us, and the chances of striking it rich this way are mighty slim, to say the least. Gambling your tax refund is a sure-fire way lose most – if not all – of your hard-earned money. So while the idea of an amazing high-stakes win is fun, it’s one best kept in the realm of your daydreams.

2) A brand-new TV

The mid-year sales are no doubt over by now, and just because there’s money in your pocket doesn’t mean it’s the time to purchase a big-ticket item like a shiny new TV, a Thermomix, or an air-hockey table. However, if you’ve been needing to replace an old appliance for a while, and this money will help you do that, that’s a different story. But don’t go out and buy something ‘just because’ you can. Do your research on the best products and shop around first to get the best deal.

3) An alcohol-fuelled holiday to Bali (or some other place where the booze is cheap and obnoxious Aussies are rife)

Not to be confused with bona fide travel to explore new places and cultures, the ‘Bali bender’ is the sort of holiday you remember more for the sweaty drunken nights out (if you remember them at all) than for any life-enriching experiences. Sure, you’ll probably have a good time while you’re there, but you’ll also have nothing to show for it afterwards except a bad hangover and maybe a dodgy tummy. Not the sort of souvenirs anyone wants.

4) That ridiculously expensive pair of shoes (or that in-season designer dress or any other exorbitant fashion item, really)

If it’s not something you would typically buy, ask yourself if it’s really worth it. Do they really go with anything else you own, or will you end up forking out for other things to justify wearing them? Are you ignoring how much they hurt your feet (“I’m sure these blisters will heal soon”) just because they look amazing? You’ll probably wear them a few times at first, but gradually you’ll wear them less and less until they’re lying at the bottom of your wardrobe, forgotten. Then you’ll rediscover them a few years later and feel a sudden rush of guilt about how much you paid for them. Ouch. Not a happy ending for you or the shoes!

5) A new puppy. Or kitten, or baby bunny.

You’re walking past the pet store and a little face pleads with you to give it a home. On an impulse, you end up leaving with the little furball in tow (along with a plethora of toys, food, bedding and accessories). While it might seem like a no-brainer, if you haven’t fully thought through the long-term commitment of introducing a new pet to your home then it’s the last thing you should be dropping your cash on.

So what should you spend it on instead?

Reward yourself. You’ve worked hard all year and paid tax for the privilege, so you’ve earned it. However, think about investing in yourself too. How can you use the money to better yourself, improve your situation or set yourself up for future success?

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