Tips on using your tax refund wisely

If you are one of the Canadians expecting a tax refund this year – great, but remember, it is not a free gift from the government, but merely a return of tax money you have overpaid into the system.  So while people may like to think of their return as found money, it really is yours, just delayed in the arrival.  Of course, it is tempting to take the cheque and splurge, but doing so is not the wisest move financially.  So what should you do with your refund?  Here are a few ideas:

• Pay down debt. Use the money to pay down your debt by making extra or higher payments.  Remember to pay down the debt with the highest interest rates first.
• Contribute early to your RRSP or make up for missed contributions.   By using your refund you are double dipping by gaining additional tax savings.
• Contribute to an RESP.  The cost of higher education is ever increasing; why not use your refund to set aside money for your children’s education.
• Check your emergency fund.  If it is a little short use your refund to get your fund in better shape should an unexpected expense arise.
• And yes – spend a little on yourself, but try to keep it to under 20%.....

Not sure what to do or want to make a plan to increase your tax savings throughout the year – contact us - one of our Financial Planners want to C.U. so tax time is as stress-free as possible.