Make the most out of your tax refund

There’s so much you can do with it, but what makes the most sense?

The responsible thing and the fun thing aren’t always the same thing, unfortunately. It’s tempting to use a tax refund on a trip, to spruce up your wardrobe or have a splashy evening out. There’s a ton of ways to spend your refund, but if you’re looking for one of those responsible ones, here’s a few suggestions:

Pay down your debts

Getting rid of high-interest debt, like the balance on your credit card is the perfect place to start. When you’re not paying those interest fees, you’ll be in a much better position to save up for something fun or practical. If you took out a loan to contribute to your RRSP, your tax refund is a great chance to knock that loan principal down to size.

Pump up your emergency fund

If you don’t already have an emergency fund, your tax refund’s a great opportunity to start one up. If something in your life goes hay wire an emergency fund can be the cushion that keeps you afloat.

Buy something you need

It might be car repairs, replacing the shingles, dental work or a new winter coat. There’s no way around it, sometimes you need to spend your money. Before you do, just make sure you’re spending it wisely.

Invest, invest, invest

When you invest your tax refund into an RRSP, you know that there’ll probably be another refund waiting for you next year. With some discipline, you can ride that cycle all the way to your retirement. If you’ve maxed out your RRSP contributions, there are other investment opportunities available.

Save for something nice

Life isn’t all about pinching your pennies – you need to have some fun too. If you have big plans coming up, your tax refund is a chance to set aside some money to help make them happen.

If you have questions about where to direct your tax refund, give our Contact Centre a call at 1.866.863.6237.