It’s tax season and the deadline is fast approaching for you to submit your income tax returns (official deadline 25 November 2016). Besides the fact that it’s the law, one of the most compelling reasons to file your tax return is the chance that you have overpaid the taxman during the year. Very soon, you will hear the anticipated ‘ping’ of an SMS, as funds are deposited into your bank account from SARS.
One of the best things about a tax refund is that it’s additional cash that you hadn’t budgeted on. Especially at this time of the year, it’s easy to get carried away with the excitement of spending this new- found cash on items that you may not necessarily need. This is why GPS Log Book has provided five tips to help you spend your money wisely so that you can overcome the urge to splurge.
- Pay off that long-lost debt
There is nothing better than seeing the balance owing on your credit card, declining. So why not use your tax refund to completely – or partially – pay off any high-rate credit card debt or car loans. If your mortgage will be a burden in the future, consider paying that down too.
- Emergency funds
If you don’t have an emergency fund equal to at least six months of expenses, use at least part of your tax refund to create one – you never know when you may need it for a rainy day.
- Invest in Education
In South Africa, quality education can be costly so it’s a good idea to invest in your or your children’s education. Perhaps this is the time to go back to school, finish your degree or take that course that you are interested in. Use your tax return to pay for your short-term educational goals or towards a longer term tuition for you or your children.
- The 10% rule
You will most likely purchase items that you’ve had your eye on for some time. Just make sure that you don’t spend more than 10% of your refund. While every situation is different, this rule of thumb will still leave you with 90% of your refund to invest.
- Make a list of your short-term and long-term goals
It’s very tempting to spend additional money on short term goals such as buying a car, or going on holiday. However, before you splurge, consider your long-term retirement goals and whether you will be able to sufficiently meet them.
To find out how you can use your GPS Log Book device to generate a SARS compliant logbook, visit www.gpslogbook.co.za or contact GPS Log Book Customer Care on 0861 GPS LOG (477 564)
The GPS Log Book Team