It is not unusual for a person to let out a big whoop of joy when they receive their tax refund but bear in mind – the refund is tax you have overpaid, not the lottery. To ensure you make the most of money that you have worked hard for, a wealth management expert has compiled a guide on where you should deposit your tax refund, depending on which stage you are at in your life.

First job or tertiary student

• reduce your credit card debt
• deposit it into a high-interest savings account but be sure to check the fine print – many accounts will entice you with a high interest rate but the headline return may drop once your money has been in there for between four to six months.

House savers

• deposit it into a high-interest savings account, as long as you do not have a substantial credit card debt or high-interest car loan.

Mortgage payers

• pay lump sums into your mortgage but be sure to check your mortgage arrangements as fixed-rate mortgages and many variable-rate home loans will not allow you to deposit lump sums or pay out early.

Mortgage payers with children

• children’s school fees
• Christmas presents
• mortgage repayments
• credit card debt
• electricity bill
• deposit on a much-needed new car
• a holiday for the frazzled nerves.

Business owner

• reinvest the money directly into your business
• credit card debt
• mortgage repayments
• quarterly business activity statement payments
• year-end tax bill.

Pre-retirees

• contribute to your superannuation
• high-interest savings account
• acquire high-yielding shares that deliver dividends
• mortgage repayments, as your mortgage may be within reach of being paid out, if it has not been already.

Retirees

• high-interest savings account instead of a bank transaction account where you will receive zero or minimal interest
• high yields that ensure your savings are enhanced before they are diminished by inflation.

Whichever stage you find yourself at, be sure to exercise restraint and a good deal of common sense when deciding where to deposit your tax refund.