Tax Rebates & Refunds

Tax rebates – Three ways to spend the money you get back

September 16, 2010
Posted in Tax Rebates — Written by Geoffrey

Once you have received a tax rebate from HMRC, you may be in a dilemma as to how to spend the money. You may be considering spending it on having a good time. It is however important that you spend the money wisely. Here are some guidelines to help you spend your tax rebate wisely.

Balance your finances

You should clear all your outstanding debts with the tax rebate you have received. Once you have cleared all your debts, you can consider spending some of the money on other goods. Spending does not mean you indulge in impulse shopping but you should spend wisely. You need to prepare your budget wisely and list down the things in priority order. If you plan properly, you will not face a situation where you need certain things but you do not have the finances.

Clear debts

An old saying goes, ‘borrowing money is like attending a wedding and paying off debt is like attending a funeral’. The money you receive as a tax rebate is unexpected so you might be tempted to spend it in an impulse-like fashion. A wise thing to do is first clear all your debts because nothing is as peaceful as living a debt-free life. Even if you are not able to clear all your debts with the received money, it is still one step forward in making you debt free.

Invest the cash

The money that you receive as a tax rebate can be invested in government or non-government institutions. If you go for government bonds, you may receive lower returns but there are fewer risks involved.

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