Council tax payments are an annual bill that we can choose to pay over 10 months or 12 months. For those of us opting to pay over 10 months of the year, we get ‘free' council tax for two months of the year. I am going to share what you can do with the extra money from free council tax months.
Council tax payments aren't free
Of course, splitting payments across 10 installments instead of 12 doesn't make it free. You pay a higher amount every month for 10 months to enjoy two months of the year when you don't have to pay council tax.
When are the free council tax months
Council tax bills are issued in April every year and council tax payments are expected between April and January if you pay over 10 months.
That means that your free council tax months are February and March, with payments due again in April.
How much money do you save during free council tax months?
Depending on how much council tax you pay, you could be saving anything from £150-£300 or more during your free council tax months. This isn't to be sniffed at!
Spend your savings from free council tax months
You work hard and there is absolutely no judgement if you want to spend the money from your free council tax months. You might opt to buy something you have been putting off, or go for a nice meal.
Pay off debts
If you are paying off debts then your free council tax months could make a nice dent into it. For example, if you need to repay £1,000 and your free council tax months money equals £150 that's a massive 15% of your debt cleared.
When it comes to paying off your debt then every little helps! Remember we once had £15,000 worth of credit card debt that we worked hard to pay off.
Add to your Emergency fund
Emergencies crop up all the time – your car might need repairs or you might need sick leave from work. Your emergency fund is a buffer that allows you to pay for these costs as they arise.
Every penny you can put towards your emergency fund will help. Dave Ramsey recommends that you put £1,000 into your emergency fund to start with, and I think this is a good goal to aim for.
Remember that breaking it down into just 1%, you just need £10 100 times.
Go on holiday
It doesn't have to be a 5 star all inclusive long haul holiday, but your free council tax months money could make a nice holiday. From a few nights away in a hotel to finding a really cheap all inclusive holiday abroad, your free council tax months money could get you quite far.
Use it as a chance to relax and rejuvenate.
Buy premium bonds
Premium Bonds might not offer the best guaranteed return on your investments, but if you want to save money, be entered into prize draws and diversify your savings then you might like Premium Bonds.
You need to deposit at least £100 at a time into Premium Bonds, and understand the chances of winning premium bonds.
Pay into your pension
Regardless of whether retirement is close by or far away, you will most likely really benefit from paying your free council tax months money into your pension.
Simply put, the Government will give you free money when you pay into your pension. As a basic rate taxpayer, when you put £80 into a pension then the Government will top it up to £100 – kerching.
Invest or pay your free council tax months money into your ISA/LISA
I have recently come to understand how important investing is, and now I love watching my investment pots grow.
Investing can take many forms, and everyone has their own investing goals and levels of risk they are happy with. Investments can go up and down, so it is important that you find the right investment product for you.
If you are looking to explore peer-to-peer lending then you can get a £100 bonus when you invest £1,000 for 12 months or more with Ratesetter.
Use it for matched betting
Matched betting is my favourite side hustle, and I made £12,000 tax free in my first 12 months of matched betting. Whilst you can get started with a small amount of money, it is true that the bigger your pot then the more money you can make, and the faster you can make it.
Matched betting is a legal and tax free way to make money from the free bet offers you see bookmakers offering.
Want to find out more?
- One year of matched betting
- Can you do matched betting long term?
- How to make £1,000 a month from matched betting
Come and join my matched betting support group on Facebook.
Start reselling on eBay
Reselling on eBay is a great side hustle that is gaining more and more popularity. The great thing about this size hustle is that you don't need a lot of capital to get started, and even as little as £10 can get you going.
However, if you were able to buy more stock from your free council tax months money then you should be able to make a bigger profit more quickly – as long as you get your stock listed and not sat around in a pile.
Read more about reselling:
Put it aside for annual costs
We all have them, those pesky costs that happen every year. Whether it is Christmas, car insurance, car tax or anything else, you can put your free council tax months money aside for these annual costs.
What we will be doing with our free council tax months money
With no council tax payments due in February and March, we will be using the money to boost our house savings because we want to buy a house this year.