Top 5 Ways To Spend Your Tax Refund
TOP 5 WAYS TO SPEND YOUR TAX REFUND
As tax season winds down, you may be anticipating a tax refund. If you already have a plan for your refund, maybe topping up your vacation fund or making some home improvements, that’s fine. But if you don’t have a well-thought-out plan and are working to improve your finances in the long term, consider these options.
MAKE THE MOST OF YOUR REFUND
PAY OFF OUTSTANDING BILLS
If you have a pile of bills, use your tax refund to pay them off. Being behind on payments can be very stressful. Use your refund as an opportunity to get ahead.
TOP UP YOUR EMERGENCY FUND
Ever notice how life’s curveballs tend to come at the worst moments? Like when you’ve just paid an expensive vet bill, and suddenly your washing machine calls it quits? Use your tax refund to start or top up your emergency fund. You will thank yourself later!
START A NEW SAVINGS PLAN
One of the hardest things to do is start a savings program. Consider your tax refund an excellent way to kickstart a TFSA, RESP, RRSP or vacation fund. You decide where to put your savings. Once you have a plan, you may be more motivated to continue making small contributions through the year.
PREPAY YOUR MONTHLY EXPENSES
Tired of living paycheque to paycheque? Use your tax refund to prepay some monthly expenses like your rent, phone bill, hydro, gas or water bill. Instead of waiting to pay on the due date, pay them now! This way, you will not be tempted to spend the money on something you don’t need, and you may find yourself ahead at the end of the month instead of struggling to pay your bills.
PAY OFF DEBT
Living a life debt free means financial security. Whether it’s a mortgage, line of credit or student loan – paying down debt is always a good use of extra cash like a tax refund.
MONTHLY MONEY TIP
“You may see signs for instant cash back on tax refunds, while this offer seems convenient, these companies effectively act as lenders and charge you a hefty fee for the instant refund.
If you want your tax refund quickly without extra costs, I recommend filing your tax return online and applying for direct deposit. You can expect to get your full refund in just two weeks if you file this way.”
-Doug Hoyes
Licensed Insolvency Trustee and Host of Debt Free in 30 Podcast
You can check the status of your tax refund online through your My Account or My CRA mobile app.
Remember the deadline to file your taxes is April 30th!
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