If you're due a tax refund, the temptation to flitter the extra cash away on short-term luxuries can be hard to resist. Whilst temporary pleasures are all well and good, the sensible thing to do is use the money for something that will further enhance your financial situation.
1) Pay off debts - whether they're student, credit card or your best friend who has been badgering you for months - pay them off. You'll feel relieved that you've either made a start or entirely eliminated a money worry that causes you unnecessary stress.
2) Save it for a rainy day - putting money aside for life's little disasters is a sure way to be prepared for any unexpected costs you can incur throughout the year. Flat tyre, sick pet, last-minute wedding? If you've got an emergency fund pre-allocated, you won't be dipping into current accounts.
3) Invest them - if your tax rebate is a significant amount, it might be worth considering investing it. Utilising low minimums/fees and exploring the opportunity to break into the stock market may reap the rewards in years to come. Make sure you seek advice if you're new to the market to ensure you are making profitable decisions.
4) Pay into your pension plan - starting your pension planning early is essential to facilitate your retirement years. It might seem safer to have the money in your bank where you can access it, but when earning an income isn't as easy as it once was, you'll be grateful you planned ahead and saved some extra cash.
5) Invest in yourself - coming into some extra cash can give freelancers the little nudge they need to pursue their business full-time. If you've been wanting to gain a qualification for some time, think about investing the money into something that will benefit your career long-term. Training, tuition or attending a work-related conference are all professional development strategies that may result in greater job stability in the future.
Whether your tax refund is big or small, there are more investment-savvy ways to spend it than on a designer pair of shoes (be we won't begrudge you if you do!)