5 Smart Ways to Spend Your Tax RefundBrian Jang ON May 17, 2017
Ahhhh…you can finally breathe a sigh of relief—tax season is done. And if you’re one of the many lucky folks who’s expecting some cash back this year, you’re probably already dreaming up ways on how to spend it. But before you race out to the stores on a wild shopping spree, you might want to consider doing something smart with your income tax refund.
For days you may have been wondering, “Where is my tax refund?” or “How long does it take to get my tax refund?” But now that the days of waiting are over, you’ll need to figure out what to do with it. Need some ideas? Read on:
Pay down debts
I know. I know. You probably had your heart set on a new HDTV, but you’ll thank yourself later. Paying down debt, especially high-interest credit debt, will not only lower (or eliminate) your monthly credit card payments, but also save you a bundle on the interest you would have shelled out. Using your Canada tax return to reduce or get rid of credit card balances, student loans, or car loans doesn’t sound like a whole lot of fun. It is, however, the smart thing to do.
Fund your emergency savings
Chip a tooth? Pipes burst in the kitchen? Dropped your cell in the toilet? Life is full of unexpected surprises—surprises that can reach deep down into your pockets. Having a rainy day cash stash can come in really handy. Otherwise, you could wind up dipping into your investments or relying on your credit cards when those unforeseeable moments happen.
Do you know what’s better than some money? More money, of course. Now that you have some extra cash, why not put it to work for you? There are a host of investment options to choose from, including the Registered Retirement Savings Plan (RRSP), Registered Education Savings Plan (RESP), Tax-Free Savings Account (TFSA), stocks, and mutual funds.
Make home improvements
Do you own a home? Well, thanks to that trusty tax refund, it might be the perfect time to improve your house or condo. Replacing old windows or doors, adding an energy efficient heating system, or doing some new landscaping will boost the value of your home, not to mention, save you some money down the road.
Hold on a moment! I’m not talking about blowing your refund on a new Coach purse. But if you need some new eyeglasses or your running shoes have seen better days, then it’s ok to splurge a little. Also, with that extra money, you could take up a new class or join a gym. After all, a little self-improvement can go a long way.
Whether you hit the jackpot or simply got back a few extra dollars, use your tax refund wisely. You’ll feel much better knowing your money went to good use instead of blowing it on something you’ll regret later.
Looking for sound tax advice? Contact us today!
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- When Are Your Business Taxes Are Due?
- What You Need to Know About Paying Taxes by Installments