Half of Australia is planning on saving their tax return while the government desperately wants them to blow it.
Australia’s economic recovery is partly reliant on a prolonged spending spree but according to new research by Finder, Australians aren’t in the mood for splurging this tax season.
The end of the financial year is almost here and with it a $17.6 billion cash injection in the form of Australian tax returns.
But the Finder survey revealed that 35% of Australians – equivalent to 6.8 million people – plan to put their tax return into savings.
With the average tax refund sitting at $2,600, Finder estimates a staggering $17.6 billion will be put into savings this year.
The research found that 12% of Australians will use the extra funds to pay for household bills, and 7% will put their tax return towards paying off their mortgage.
Kate Browne, personal finance expert at Finder, encouraged Australians to think sensibly about how they use their cash injection.
“Most people have worked hard throughout the year for this extra cash, so it’s promising to see that just over a third of Aussies aren’t planning to spend it all at once.
“In previous years, we would have anticipated higher rates of spending on things like retail therapy and travel.
“Australians are understandably wanting to save whatever cash they can, given the uncertain events of the past 12 months,” she said.
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The survey found a small portion of respondents (5%) will use the extra cash to pay off their credit card, and only 4% will put the funds towards a holiday.
Browne reminded Australians that the extra savings could be a good buffer against any unforeseen costs in the coming financial year.
“The COVID-19 pandemic has shown us what an unforeseen financial event can look like, so for many Australians having a healthy savings account is top of mind.
“I’d recommend using the cash to add to your savings, consolidate debt, or get your bills under control.
“Budgeting apps like the Finder app can help you boost your savings by keeping you accountable for your spending and helping you analyse where you might be able to cut back,” Browne said.
Gen Z is the biggest savers, with almost half (45%) planning to save their tax return.
Just 23% of Baby Boomers plan to do the same.
Nearly one-third (30%) of Aussies aren’t expecting a tax return at all.