Thursday, May 29, 2008

'Don't waste tax return' says CU boss

The lucky people who receive a tax return should use the money wisely and not spend it on frivolous items, the nation's largest credit union says.

As tax return time nears, a person should consider using their financial windfall to improve their finances, Credit Union Australia (CUA) managing director Graham Olrich said.

"While those shoes or new pair of jeans may be a 'must have' today, there are smarter ways to spend a tax return that could provide you with an endless shoe or jeans collection in years to come," Mr Olrich said.

Mr Olrich suggests seven ways for a person to look after their tax return.

The first and most obvious way was to reduce your debt, particularly credit cards, he said.

According to financial research service group CANNEX, some credit cards now charge more than 20 per cent on outstanding balances.

Secondly, use the tax return to help pay off the mortgage, Mr Olrich said.

"It's a great way to significantly reduce your loan and perhaps pay it off in a shorter period than expected," he said.

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