In addition to warmer weather, spring brings tax refunds for many Canadians. While splurging on a summer vacation or new patio furniture may be tempting, consider the three options below that may be better uses for your tax refund.
1. Pay off debt – Debt brings interest payments that essentially throw hard-earned money away. So it’s smart to use your tax refund to pay off any debts (especially high-interest credit card debt) to ensure you can start paying yourself instead of your credit card issuer.
2. Contribute to your RSP or TFSA – Contributing your refund into your RSP or TFSA is a great way for your money to grow tax-free. One advantage to putting your refund into an RSP is that the contribution will generate another tax deduction next year.
3. Save for a rainy day – A recent survey by Tangerine showed that almost a third of Canadians regularly tap into their savings for an unexpected purchase. By putting your tax refund away in savings, you’ll ensure you have enough money to cover any unexpected purchases that arise throughout the year.
More information is available at www.ForwardThinking.ca.