WEBVTT - Five smart ideas for using your tax refund 0:00:01.600 --> 0:00:03.680 Welcome to How Do They Afford That? The podcast that 0:00:03.720 --> 0:00:07.080 peeks into the financial lives of everyday Australians. I'm Michael Thompson. 0:00:07.080 --> 0:00:08.680 I'm an author and the co host of the business 0:00:08.680 --> 0:00:11.680 news podcast Fear and Greed. As always, I'm with Canna Campbell, 0:00:11.720 --> 0:00:15.480 financial planner, founder of Sugar Mama TV, the financial literacy 0:00:15.480 --> 0:00:19.440 platform that is just about everywhere YouTube, podcast, books, Instagram, threads, 0:00:19.480 --> 0:00:23.880 TikTok and more. Hello Canna, Hello, how are you? I 0:00:23.920 --> 0:00:26.720 am good, Thank you, and I'm looking forward today's episode 0:00:26.720 --> 0:00:30.480 because it is a timely episode because when now a 0:00:30.520 --> 0:00:33.159 few months past the end of the financial year and 0:00:33.200 --> 0:00:39.520 everyone's hopefully got their tax in hopefully maybe a little optimistically, 0:00:40.479 --> 0:00:46.520 but for some, for the lucky ones, tax refunds getting 0:00:46.520 --> 0:00:49.080 a bit of money back, right, for some people it 0:00:49.159 --> 0:00:52.400 might be a couple of one hundred dollars, maybe a 0:00:52.440 --> 0:00:53.240 few thousands. 0:00:53.680 --> 0:00:57.600 Well, I remember reading that the average tax refund that 0:00:57.680 --> 0:01:00.440 Australian and Australian gets is around two to two and 0:01:00.480 --> 0:01:04.000 a half thousand dollars. But with the gig economy and 0:01:04.280 --> 0:01:07.240 obviously hex stits and things like that, it's actually now 0:01:07.360 --> 0:01:09.720 the average is a lot lower. It's around about one 0:01:10.840 --> 0:01:14.120 and seventy seven dollars fund, so the returns are a 0:01:14.160 --> 0:01:14.720 lot lower. 0:01:14.800 --> 0:01:17.759 So if we assume then that the average is somewhere 0:01:17.800 --> 0:01:20.679 between those two, that may be somewhere between one and 0:01:20.720 --> 0:01:26.080 two thousand dollars. Right, it feels like bonus money, like 0:01:26.200 --> 0:01:29.440 free money. And I'm just like, just even as I 0:01:29.480 --> 0:01:32.160 say this one money, that's right, I could just see 0:01:32.200 --> 0:01:35.000 this that that little twitch in your eyebrow that I 0:01:35.120 --> 0:01:39.080 enjoy seeing when something really stresses you out. But how 0:01:39.080 --> 0:01:40.600 do we actually make the most of it if we're 0:01:40.600 --> 0:01:42.720 thinking of it as bonus money, as free money? Today, 0:01:42.760 --> 0:01:44.480 we're going to make a list, because we love a 0:01:44.480 --> 0:01:46.640 good list on this podcast. We are going to come 0:01:46.680 --> 0:01:51.720 up with five smart ideas to make the most of 0:01:51.760 --> 0:01:56.200 your tax refund. But first, why do they feel like 0:01:56.280 --> 0:01:59.920 free money? I'm assuming this is a risky mindset. 0:02:01.720 --> 0:02:05.200 Well, it's psychological. You know, the refund it really does 0:02:05.240 --> 0:02:08.520 feel like a bonus, particularly if you weren't expecting it 0:02:09.280 --> 0:02:12.440 and you you know, discover oh look the aty of 0:02:12.480 --> 0:02:14.960 deposited you know, one thousand dollars or two thousand dollars 0:02:15.000 --> 0:02:15.880 into my bank account. 0:02:16.080 --> 0:02:18.119 Also, and as you've been paying your tax, the whole 0:02:18.120 --> 0:02:21.000 way through the year, and that that year has passed. 0:02:21.000 --> 0:02:22.840 Now you're kind of a few months into the new 0:02:22.919 --> 0:02:26.480 financial year. It feels like it is kind of ancient history. 0:02:26.560 --> 0:02:29.560 And then all of a sudden, this money just lobs. 0:02:29.400 --> 0:02:31.720 And because that money is not part of our you know, 0:02:32.639 --> 0:02:36.480 regular income, you know, it does feel like we haven't 0:02:36.480 --> 0:02:39.240 physically worked for that money. You know, it feels like, 0:02:39.320 --> 0:02:41.680 you know, literally you've won some money. It's it's you've 0:02:42.800 --> 0:02:46.480 manifested it even But the thing is, in reality, it 0:02:46.600 --> 0:02:48.480 is just our own money. It's just been returned back 0:02:48.480 --> 0:02:52.160 to us, and we were just overpaid, well we overpaid 0:02:52.200 --> 0:02:54.760 tax through the financial year, and it's just been given 0:02:54.800 --> 0:02:58.880 back to us. So we somehow seem to treat it 0:02:58.919 --> 0:03:01.360 like it's free money, and we're more likely then to 0:03:01.520 --> 0:03:04.280 go and blow it and spend it impulsively rather than 0:03:04.320 --> 0:03:07.280 actually think strategically, which is a bit of a trap 0:03:07.320 --> 0:03:10.880 when you do get as a surprise tax refund that 0:03:10.919 --> 0:03:12.840 you weren't expecting, because you don't have that if you 0:03:12.880 --> 0:03:14.240 know that you're going to be getting, say a two 0:03:14.240 --> 0:03:16.640 thousand dollars tax refund or a five hundred dollars tax refund, 0:03:16.800 --> 0:03:18.520 you have that time to go, Okay, well when I 0:03:18.560 --> 0:03:22.720 get that refund yep, I will. I got that gap 0:03:22.760 --> 0:03:24.440 to actually think, okay, what do I want to do 0:03:24.480 --> 0:03:27.520 with that money, rather than going, what a great surprise, 0:03:27.680 --> 0:03:29.000 I'm gonna go shopping? 0:03:29.320 --> 0:03:32.640 Yeah? Is that? Is that the biggest mistake with tax 0:03:32.680 --> 0:03:37.680 refunds that you had worn against blowing it just treating 0:03:37.720 --> 0:03:39.960 it as free money and just going you know what 0:03:40.000 --> 0:03:40.400 this is? 0:03:40.800 --> 0:03:41.800 It is not free money. 0:03:42.720 --> 0:03:45.560 But if it's if it's outside of your budget. Right, 0:03:45.680 --> 0:03:46.560 it looks. 0:03:46.320 --> 0:03:50.040 It's smoking mirrors. It looks like it's free money, but 0:03:50.120 --> 0:03:52.680 it ain't free money. It's your own money just being 0:03:52.720 --> 0:03:56.240 given back to you. The atas just overtaxed you and says, 0:03:56.280 --> 0:04:00.200 oh sorry, I gave you the wrong change, back your 0:04:00.200 --> 0:04:01.240 correct change. 0:04:01.720 --> 0:04:07.160 Yeah, but okay, it's your money, therefore go nuts. Right. 0:04:08.160 --> 0:04:10.480 I taught you, Narli, You've taught me a lot. You 0:04:10.520 --> 0:04:13.400 have not taught me this, though, No, you have. Let's 0:04:13.440 --> 0:04:17.760 do our five ideas. Let's start with number one idea, 0:04:17.920 --> 0:04:22.520 number one smart idea, number one, not just any random idea. 0:04:22.440 --> 0:04:27.560 Michael's smart idea. And this holds the latest iPhone. 0:04:27.920 --> 0:04:31.559 Well, yes, but that was a that's a tool for work. 0:04:31.640 --> 0:04:33.320 Technically, yes, it was an investment. 0:04:33.400 --> 0:04:36.280 Indeed, it is idea number one please can I. 0:04:36.160 --> 0:04:39.719 Would be to top up your emergency money. Okay, So 0:04:40.400 --> 0:04:42.760 I was actually reading that most Australians, something like one 0:04:42.800 --> 0:04:45.240 in three Australians kind of come up with two thousand 0:04:45.240 --> 0:04:48.960 dollars in an emergency, which is very very concerning. So look, 0:04:49.320 --> 0:04:51.240 even just a couple of hundred dollars put a side 0:04:51.240 --> 0:04:54.599 into a separate savings account away from your normal everyday spending, 0:04:54.680 --> 0:04:59.120 can massively reduce some financial anxiety and it actually creates 0:04:59.160 --> 0:05:02.120 a place to build upon from that point going forwards. 0:05:03.000 --> 0:05:05.160 So as she was combak where I read that one 0:05:05.160 --> 0:05:07.320 in three couldn't actually come up with even five hundred 0:05:07.320 --> 0:05:10.360 dollars in an emergency, not two thousand dollars. That's really 0:05:10.560 --> 0:05:14.039 really frightening. Yeah, so yes, this is not the most 0:05:14.080 --> 0:05:17.560 glamorous idea, but it's going to help you sleep a 0:05:17.560 --> 0:05:19.680 little better at night, and it gives you some breathing room. 0:05:19.720 --> 0:05:21.240 And you know, if you get hit with some you know, 0:05:21.440 --> 0:05:22.440 a tough time. 0:05:22.440 --> 0:05:28.440 And especially if you're not expecting this refund necessarily or 0:05:28.520 --> 0:05:32.320 you are, you're not budgeting for it, so you're not 0:05:32.360 --> 0:05:34.640 going to miss it necessarily. If you tuck it away 0:05:34.680 --> 0:05:37.000 straight into emergency money. It's not as though it's like 0:05:37.000 --> 0:05:39.680 you're having you're wrenching it out of your budget and 0:05:39.720 --> 0:05:41.839 trying to kind of clear space for it in your budget, 0:05:41.839 --> 0:05:43.680 and you're cutting all of these other things. You were 0:05:43.800 --> 0:05:47.320 just reallocating something that has just arrived. So it's probably 0:05:47.320 --> 0:05:51.240 the best possible time to do it right, to bring it. 0:05:51.360 --> 0:05:53.400 Come back to your idea about it being free money. 0:05:53.480 --> 0:05:55.160 It's like you go to the coffee shop with a 0:05:55.200 --> 0:05:59.600 fifty dollar note and you buy coffee, and the coffee 0:05:59.640 --> 0:06:02.200 say dollars, and you get back. 0:06:03.200 --> 0:06:05.919 Say forty four dollars. Yes, I was helping you. 0:06:06.200 --> 0:06:07.520 No, no, no, you don't get no. Hang on, you're 0:06:07.560 --> 0:06:10.240 not helping me. You actually now nest my idea up. 0:06:10.520 --> 0:06:15.560 You get back forty two dollars, and the barista says, 0:06:15.600 --> 0:06:18.160 hang on, Michael, stop, I didn't give you the right 0:06:18.279 --> 0:06:21.760 change back. Here's an extra two dollar coin that I 0:06:21.800 --> 0:06:25.240 didn't give you previously. Is that free money? No, it's 0:06:25.279 --> 0:06:29.440 your money, and so therefore you I just killed your idea. 0:06:29.480 --> 0:06:30.440 Now of free money. 0:06:31.360 --> 0:06:33.279 Nowhere near as fun as it used to be. But 0:06:33.360 --> 0:06:35.200 I do like this idea of the fact that because 0:06:35.240 --> 0:06:39.919 you haven't actually been relying on it, or it hasn't 0:06:39.960 --> 0:06:42.400 been part of your household budget, it hasn't just been 0:06:42.400 --> 0:06:45.120 floating around that it's probably the ideal time to put 0:06:45.120 --> 0:06:46.640 it into some of those things that are a little 0:06:46.640 --> 0:06:51.120 bit more dull because you're not having to sacrifice anything 0:06:51.160 --> 0:06:51.400 for it. 0:06:51.480 --> 0:06:55.840 You know, it's an opportunity to create a bit more 0:06:55.880 --> 0:06:57.719 headwind in your financial journey. 0:06:58.800 --> 0:07:03.680 That's idea number one, with including a very confusing amalgry. 0:07:03.760 --> 0:07:05.359 I just came to it, just hit me, and I 0:07:05.440 --> 0:07:07.320 just had to share it with you. I feel like 0:07:07.360 --> 0:07:10.520 you're still stuck thinking a tax refund is a winning 0:07:10.600 --> 0:07:13.680 or a bonus money, and you can it's probably where 0:07:13.720 --> 0:07:15.800 you how you bought that new iPhone of yours kind. 0:07:15.680 --> 0:07:17.000 Of still feels like a bonus. 0:07:17.200 --> 0:07:20.560 ID Number two, Please all right, pay down high interest 0:07:20.600 --> 0:07:24.120 debt like so credit cards by now, pay later, personal loans, 0:07:24.640 --> 0:07:27.280 you know, they are those expenses that really do drain 0:07:27.320 --> 0:07:31.320 our cash flow. And credit cards can charge like twenty 0:07:31.480 --> 0:07:34.040 percent sometimes I've seen twenty two percent, even a little 0:07:34.080 --> 0:07:36.680 bit more. So you've got say two thousand dollars oring 0:07:36.720 --> 0:07:39.200 on a credit card and you get a tax refund, 0:07:39.320 --> 0:07:41.800 you know, depending on the refund, you potentially are saving 0:07:42.120 --> 0:07:43.640 four hunder dolls and interest that you would have had 0:07:43.680 --> 0:07:46.440 to pay over the year on that on that loan. 0:07:47.280 --> 0:07:51.040 So the benefit of this is is you're facing your 0:07:51.120 --> 0:07:53.760 financial demons. You know, you know you need to pay 0:07:53.760 --> 0:07:55.640 it off. He's an opportunity to help make a dance 0:07:55.760 --> 0:07:58.200 or to help clean it and wipe it away instantly. 0:07:58.640 --> 0:08:00.800 That's going obviously going to improve your fine health. You 0:08:00.800 --> 0:08:04.800 can start afresh and start building savings and building maybe 0:08:04.960 --> 0:08:07.760 investments and obviously reduce your stress levels and improve your 0:08:07.760 --> 0:08:08.400 credit store. 0:08:08.520 --> 0:08:13.120 Even is there a risk, right, And I don't mean 0:08:13.160 --> 0:08:17.880 to be cynical, no, never. If you do that, you're 0:08:17.880 --> 0:08:20.480 just going to build it straight back up again, because 0:08:20.720 --> 0:08:22.960 paying it off is one thing, but you need to 0:08:23.080 --> 0:08:27.200 also have an adjustment in your mindset at the same time, right, 0:08:27.240 --> 0:08:30.600 because otherwise you will pay it down. Yes, you will 0:08:30.600 --> 0:08:33.120 not pay the interest then moving forward on that, but 0:08:33.360 --> 0:08:35.560 unless you actually change your spending habits, you're just going 0:08:35.600 --> 0:08:37.280 to build it straight back up again. And I've seen 0:08:37.280 --> 0:08:39.160 this very much firsthand. 0:08:40.160 --> 0:08:46.359 Absolutely, if you don't confront the actual I guess parasite 0:08:46.440 --> 0:08:49.360 or the problem at hand that's creating this credit card 0:08:49.400 --> 0:08:51.160 dead of course you're going to be back in it again. 0:08:51.480 --> 0:08:54.120 This is just an opportunity for you to actually restart. 0:08:54.120 --> 0:08:55.880 That's why I said, you know, start with a fresh 0:08:55.960 --> 0:08:58.520 plate or turning over a fresh leaf is probably a 0:08:58.520 --> 0:09:01.000 better way of saying this. And I really do believe 0:09:01.000 --> 0:09:04.520 when you're in credit card debt or any type of debt, 0:09:04.720 --> 0:09:07.640 it's so toxic because it kind of keeps you trapped 0:09:08.080 --> 0:09:10.240 in that you don't feel good about yourself, so you 0:09:10.320 --> 0:09:12.559 go and spend more. Yeah, and you know, this is 0:09:12.600 --> 0:09:14.480 why we see people get deeper and deeper into debt. 0:09:14.520 --> 0:09:15.679 You know, think, O, well, I'm already in two and 0:09:15.679 --> 0:09:17.760 a half thousand dollars with a debt, what's another three 0:09:17.880 --> 0:09:20.559 hundred dollars? You know? And then it's oh, well I'm 0:09:20.600 --> 0:09:22.640 in eighteen two thousand, eight hundredars with a debt. Well 0:09:22.640 --> 0:09:25.000 what if it just goes to a flat three thousand? 0:09:25.000 --> 0:09:28.079 And that's where I see people really get themselves into 0:09:28.120 --> 0:09:31.880 a hole. So when these opportunities come, you know, you've 0:09:31.880 --> 0:09:34.080 got to jump on them, and jump on them quickly 0:09:34.320 --> 0:09:37.680 before temptation comes in and go all right, I don't 0:09:37.720 --> 0:09:39.520 want to I'd love to go and blow that money 0:09:39.559 --> 0:09:41.400 and spend it. But the truth and reality is is 0:09:41.440 --> 0:09:42.880 I need to confront this credit card debt and I 0:09:43.440 --> 0:09:45.880 need to start working on myself and learn about managing 0:09:45.880 --> 0:09:48.959 my cash flow better to fix this so I don't 0:09:49.000 --> 0:09:51.760 have The next tax refund I get goes to me, 0:09:51.920 --> 0:09:53.640 It goes to my savings, it goes to my investing, 0:09:53.679 --> 0:09:55.120 it goes to my super or whatever you want it 0:09:55.200 --> 0:09:55.560 to go to. 0:09:55.880 --> 0:09:58.040 I know that we're veering off into credit cards and 0:09:58.080 --> 0:10:00.320 things here, but if you were to do that, if 0:10:00.360 --> 0:10:02.040 you were to pay down, say you have a thousand 0:10:02.080 --> 0:10:04.640 dollars come in from the ATO and you pay that 0:10:04.679 --> 0:10:08.160 off your credit card, would you recommend, say, then, reducing 0:10:08.200 --> 0:10:11.319 your credit limit on your card by that same amount 0:10:11.520 --> 0:10:14.280 so that it limits your ability to keep doing it 0:10:14.400 --> 0:10:15.920 or you don't have to do it as a full 0:10:15.960 --> 0:10:19.120 credit limit change. A lot of providers allow you to 0:10:19.480 --> 0:10:22.120 put in place a spending cap on that credit card. 0:10:22.200 --> 0:10:23.160 Is that a smart move? 0:10:23.480 --> 0:10:25.480 Definitely? I think that's a great idea. And I said 0:10:25.480 --> 0:10:28.160 a lot of people, you know, if you keep getting 0:10:28.160 --> 0:10:31.960 yourself back into this cycle of pay credit card data, 0:10:32.040 --> 0:10:33.880 often then find six months out of your back in 0:10:33.920 --> 0:10:36.240 it all over again. Perhaps it's time that you don't 0:10:36.280 --> 0:10:39.360 actually have a credit card at all, so, you know, 0:10:39.720 --> 0:10:42.720 reducing the cap and then eventually canceling it is definitely 0:10:42.760 --> 0:10:44.760 a great plan. You know. It's the idea of having 0:10:44.960 --> 0:10:46.600 being on a diet, But then your fridge is full 0:10:46.600 --> 0:10:50.280 of chocolate and lollies and cheeses and all those delicious 0:10:50.320 --> 0:10:52.480 but very naughty foods that don't help us achieve our 0:10:52.600 --> 0:10:55.880 weight loss or fitness goals. So why make life harder? 0:10:55.920 --> 0:10:59.080 And I don't own a credit card, and I really 0:10:59.240 --> 0:11:02.079 like not having a credit card. And that's nothing to 0:11:02.120 --> 0:11:04.040 do with credit card debt, just one most thing not 0:11:04.080 --> 0:11:04.600 to think about. 0:11:04.800 --> 0:11:06.560 Yeah, okay, that makes sense, all right. So they are 0:11:06.600 --> 0:11:08.720 the first two ideas. Let's take a very quick break 0:11:08.760 --> 0:11:11.440 and come back with the next three on our list 0:11:11.520 --> 0:11:14.800 of the top five smart ideas for using a tax refund? 0:11:21.240 --> 0:11:23.120 Can are We are going through five smart ideas for 0:11:23.200 --> 0:11:26.320 using your tax refund. This is assuming that you have 0:11:26.400 --> 0:11:29.280 received one. Maybe you are expecting to receive one, and 0:11:29.280 --> 0:11:32.600 in which case this is just getting in early. So far, 0:11:32.640 --> 0:11:35.000 we've had top up your emergency money and pay down 0:11:35.120 --> 0:11:38.719 high interest debt at toxic debt, your credit card or 0:11:38.880 --> 0:11:43.239 personal loans. Things like that. Smart idea number three. 0:11:43.600 --> 0:11:46.520 What is it invested? My favorite idea? 0:11:46.760 --> 0:11:48.280 Excellent? What are we talking? 0:11:48.679 --> 0:11:52.000 Well, you could look at say a listed investment company, 0:11:52.000 --> 0:11:54.240 which is my personal favorite investment. Or you could look 0:11:54.240 --> 0:11:57.080 at an ETF exchange traded fund, or even look at 0:11:57.080 --> 0:12:00.680 a micro investing account, but obviously don't stay there for 0:12:00.720 --> 0:12:03.760 too long. Once your account grows and you're ready to 0:12:04.040 --> 0:12:07.439 fly to spread doings, get out of those micro investing apps. 0:12:07.960 --> 0:12:11.080 But you know, even you know users to start your 0:12:11.080 --> 0:12:14.560 financial journey of investing. You know that one thousand dollars 0:12:14.559 --> 0:12:16.720 could be used to buy your first passable shares and 0:12:16.720 --> 0:12:19.960 that is the birthplace of your passive income stream, and 0:12:20.000 --> 0:12:22.800 then you can regularly contribute and build it upon it 0:12:22.840 --> 0:12:25.320 from there. But you've started, and that's the hardest part 0:12:25.360 --> 0:12:28.520 done for you through your tax refund. Yeah. 0:12:28.559 --> 0:12:32.480 I was reading some research recently that said that basically, 0:12:32.520 --> 0:12:35.040 and I'm paraphrasing here, that even a lot of high 0:12:35.120 --> 0:12:39.240 income earners don't start investing because they feel, I haven't 0:12:39.280 --> 0:12:42.120 got enough money to get going, even though they do 0:12:42.679 --> 0:12:44.960 actually have it. But it's almost a confidence thing. It 0:12:45.040 --> 0:12:47.400 is almost just a mindset thing of just kind of 0:12:47.480 --> 0:12:52.080 getting going, doing some research and just getting started and 0:12:52.120 --> 0:12:54.720 once you've started, then it's easier to continue going. And 0:12:54.760 --> 0:12:56.800 maybe this is that that kind of trigger that having 0:12:56.840 --> 0:12:59.719 that money sitting there, not how allocated to anything else, 0:12:59.800 --> 0:13:02.120 might just be that that little push that you need. 0:13:02.280 --> 0:13:05.920 Definitely, And like the thousand dollars project that I created, 0:13:06.880 --> 0:13:09.040 you know, started as just that you literally just hustle 0:13:09.080 --> 0:13:11.120 one thousand dollars. That first one thousand dollars was the 0:13:11.120 --> 0:13:13.920 hardest to come up with. But once I went and 0:13:13.920 --> 0:13:17.719 invested it, it just compounded and just grew, and I 0:13:18.320 --> 0:13:20.160 became addicted to watching it grow. And now it's worth 0:13:20.200 --> 0:13:23.200 over three hundred and sixty five thousand dollars. Yeah, and 0:13:23.400 --> 0:13:24.920 that is literally one thousand dollars at a time. 0:13:25.040 --> 0:13:25.840 That is incredible. 0:13:26.080 --> 0:13:27.960 But it started and that was the hardest part. 0:13:28.200 --> 0:13:31.480 Yeah. And of course remember that everything we're talking about 0:13:31.520 --> 0:13:33.160 here is general in nature. 0:13:33.440 --> 0:13:36.240 You guys are my favorite resident is investment company, right, It. 0:13:36.320 --> 0:13:39.960 Is not personal investment strategic product advice. We don't know 0:13:40.040 --> 0:13:42.199 your financial circumstances. 0:13:41.480 --> 0:13:44.520 Well, the time frame for your financial goals. 0:13:44.280 --> 0:13:48.000 And this is financial education purposes only, and you should 0:13:48.400 --> 0:13:54.319 seek professional advice before making decisions. I got very formal. 0:13:54.040 --> 0:13:57.600 There in the middle of it that was my fault. 0:13:57.600 --> 0:14:00.640 Number four, So that was investing number four or idea 0:14:00.800 --> 0:14:02.600 number four. Is this a smart one or a fun 0:14:02.640 --> 0:14:03.720 one or somewhere in between. 0:14:03.880 --> 0:14:06.640 It's sexy, it's super okay, So. 0:14:06.559 --> 0:14:10.160 It's neither okay. It is definitely smart, it's not necessarily fun. 0:14:10.320 --> 0:14:13.439 I wouldn't describe it necessarily as sexy. 0:14:13.520 --> 0:14:17.199 Well, that's your personal choice. It is. You could use 0:14:17.240 --> 0:14:20.440 that money as a one off personal contribution. Now you've 0:14:20.440 --> 0:14:22.120 got to be careful with this because if you have 0:14:23.480 --> 0:14:26.280 limits in place that you have come close to, and 0:14:26.320 --> 0:14:28.960 these limits are per financial year, not per calendar yet, 0:14:29.000 --> 0:14:32.480 you just could just double check. But there's also a 0:14:32.520 --> 0:14:35.960 way of potentially not doubling your money, but getting a 0:14:36.040 --> 0:14:38.000 much better return on your money, and that is by 0:14:38.040 --> 0:14:41.840 looking at the government's co contribution scheme. So if you're 0:14:41.920 --> 0:14:47.520 earning it's forty seven thousand or four hundred and eighty 0:14:47.560 --> 0:14:50.720 eight actually or less, you can and it obviously tapers 0:14:50.760 --> 0:14:53.440 off and I think it stops it around about sixty 0:14:53.520 --> 0:14:56.040 two thousand if I remember correctly. But you can put 0:14:56.120 --> 0:14:58.760 up to one thousand dollars into your superannuation and the 0:14:59.120 --> 0:15:03.840 government will put up to five hundred dollars. So it's 0:15:03.840 --> 0:15:06.880 like an instant return, guaranteed return. 0:15:07.040 --> 0:15:08.120 That is free money. 0:15:08.760 --> 0:15:11.080 That is free money, and that is super sexy. 0:15:11.680 --> 0:15:15.040 Actually that is quite quite erotic. 0:15:17.200 --> 0:15:21.240 I don't know how I feel about erotic, but I 0:15:21.280 --> 0:15:22.880 know I use the word sexy, but six seems a 0:15:22.880 --> 0:15:26.520 bit more PG than erotic. But you know, super innuation 0:15:26.680 --> 0:15:30.120 is one of the most tax effective long term asset 0:15:30.200 --> 0:15:36.560 building vehicles that is available to all Australians, well most Australians, 0:15:36.960 --> 0:15:40.640 and really can make a huge impact in improving people's 0:15:40.680 --> 0:15:41.960 the quality of people's retirement. 0:15:42.200 --> 0:15:46.600 Yeah, and again, great opportunity to do it when you 0:15:46.640 --> 0:15:50.040 suddenly have this extra money as you weren't necessarily expecting, 0:15:50.720 --> 0:15:51.320 go for it. 0:15:51.400 --> 0:15:53.520 And also it's away from temptation because you once that 0:15:53.560 --> 0:15:55.760 money's in, you can't get it back out, which I 0:15:55.800 --> 0:15:57.160 think is a blessing in disguise. 0:15:57.520 --> 0:16:01.240 I completely agree with you on that, ok. Idea number 0:16:01.240 --> 0:16:04.880 five we are moving right away from the sexiness of 0:16:04.880 --> 0:16:06.880 superannuation into. 0:16:07.560 --> 0:16:11.320 Spending it on self care or something that improves your future. 0:16:12.040 --> 0:16:14.320 So you know, I was not expecting this from you. 0:16:14.600 --> 0:16:18.760 I thank you. I do like to surprise education, upskilling 0:16:19.120 --> 0:16:21.040 or even you know, a side hustle idea that you've 0:16:21.040 --> 0:16:24.080 been wanting to work on. Now use that money to 0:16:24.120 --> 0:16:28.680 buy that equipment, or use that course of that software program. 0:16:28.920 --> 0:16:32.400 You know, self help course is a great one. I 0:16:32.400 --> 0:16:34.720 recently did one and I absolutely loved it. So these 0:16:34.760 --> 0:16:37.800 are things that you can invest your money in. They're 0:16:37.800 --> 0:16:39.680 going to hopefully have I guess you could say a 0:16:39.760 --> 0:16:45.040 multiplier effect on your income or your potential income. So 0:16:45.080 --> 0:16:47.520 that's quite exciting, and you know, I think this is 0:16:47.520 --> 0:16:49.960 really important to ask yourself, like, what can I use 0:16:50.040 --> 0:16:54.080 this refund to help create more income or help build 0:16:54.080 --> 0:16:58.200 my knowledge or my experience or my opportunities to improve 0:16:58.240 --> 0:17:00.480 my finances end? 0:17:01.480 --> 0:17:06.439 Oh oh boy? What this No. I'm just thinking that 0:17:06.560 --> 0:17:09.439 if you are doing something that is a side hustle 0:17:09.600 --> 0:17:11.600 or that is helping you to actually make money, and 0:17:11.640 --> 0:17:13.920 you're investing in something that is potentially going to help 0:17:13.960 --> 0:17:16.560 make you money, there is a chance that, with advice 0:17:16.600 --> 0:17:19.399 from your accountant, that that spending might in fact be 0:17:19.440 --> 0:17:22.720 tax deductible as well, in which case then your tax 0:17:22.800 --> 0:17:26.200 refund spending becomes tax deductible in the following year. 0:17:26.359 --> 0:17:29.119 That's really really good point I missed that? Have I 0:17:29.160 --> 0:17:29.560 missed that? 0:17:30.000 --> 0:17:33.000 You know what? There is a moment in one's life 0:17:33.760 --> 0:17:39.560 where the student becomes the teacher. Oh my god, and 0:17:39.600 --> 0:17:42.480 I think we've just we just crossed that threshold. 0:17:42.520 --> 0:17:43.280 I'll let you think that. 0:17:43.520 --> 0:17:46.600 Oh thank you. Okay, So there are five ideas. Can 0:17:46.640 --> 0:17:49.600 you use it for fun? What can we just. 0:17:49.880 --> 0:17:52.280 Can I mean, god, I'm not the fun police. 0:17:52.119 --> 0:17:54.119 Yes you are, but can we just get a little 0:17:54.200 --> 0:17:57.520 bit of it? Like if you're just say is? Because 0:17:57.560 --> 0:18:00.960 again I don't want to be kind of silly with it, 0:18:02.119 --> 0:18:05.439 but it does make sense right to just go a 0:18:05.440 --> 0:18:08.240 little bit at ten percent or something. Whatever I'm going 0:18:08.280 --> 0:18:10.399 to spend that, I can actually have a bit of 0:18:10.400 --> 0:18:11.879 fun with that, and the rest I'm going to be 0:18:11.880 --> 0:18:15.119 smart with because otherwise you run the risk of coming 0:18:15.400 --> 0:18:18.200 very boring, and the money side of it can become 0:18:18.240 --> 0:18:18.719 a chore. 0:18:18.880 --> 0:18:21.760 Absolutely. Look, it is about balance. So you might say, okay, 0:18:22.240 --> 0:18:23.720 and this is why I think it's really important not 0:18:23.800 --> 0:18:27.840 to react when you see that in an impulsive manner. 0:18:27.960 --> 0:18:30.760 When you see that money, sit down, deep breath. This 0:18:30.840 --> 0:18:33.040 is exciting. Yes, this is something you didn't expect. Yes 0:18:33.080 --> 0:18:35.680 it's bigger than you thought even but go, okay, how 0:18:35.680 --> 0:18:38.639 do I do this? Enjoy some money today and spend 0:18:38.680 --> 0:18:40.440 it and feel good about myself, but then also feel 0:18:40.480 --> 0:18:43.479 proud of making an intelligent decision that's going to benefit 0:18:43.520 --> 0:18:46.399 me for many, many years to come. Don't forget like 0:18:46.440 --> 0:18:48.480 there are going to be other tax refunds, hopefully in 0:18:48.520 --> 0:18:50.560 the future. But you know, yes, so you know it 0:18:50.640 --> 0:18:53.520 might be something like a holiday. It might be you know, 0:18:53.600 --> 0:18:56.320 a new wardrobe, or it might be a new piece 0:18:56.320 --> 0:18:58.960 of equipment, or it might be a weekend away, or 0:18:59.280 --> 0:19:03.360 it might be a massage. Yes, like you do need 0:19:03.400 --> 0:19:06.400 to have that sense of fund to help keep you motivated. 0:19:06.520 --> 0:19:08.560 As you say, like it makes you very dull and boring, 0:19:08.560 --> 0:19:12.280 and I amazingly do agree with that. So the question 0:19:12.320 --> 0:19:14.520 I like to ask myself is would I buy this 0:19:14.800 --> 0:19:16.800 if it was coming out of my normal after tax 0:19:16.880 --> 0:19:19.840 money or not. And that doesn't mean yes or no 0:19:19.880 --> 0:19:22.280 to proceed ahead. It means just just have that awareness 0:19:22.359 --> 0:19:24.280 that you are spending mindfully. 0:19:24.640 --> 0:19:28.280 Yeah, no, that makes sense. Just very quickly, you mentioned 0:19:28.280 --> 0:19:30.560 a couple of times we're talking about investing, We were 0:19:30.600 --> 0:19:33.560 talking about adding to your superannuation. If you had a 0:19:33.560 --> 0:19:37.520 couple of thousand dollars right that you've received for your 0:19:37.560 --> 0:19:42.960 tax refund, just what impact could that make long term? 0:19:43.880 --> 0:19:46.800 Well, if you took say two thousand dollars, and you 0:19:46.840 --> 0:19:49.800 went in invested it in to say an ETF, and 0:19:50.119 --> 0:19:52.160 you looked at a return, a net return of say 0:19:52.200 --> 0:19:55.840