It’s every Canadians favourite time of year – it’s tax time again! The CRA starts processing tax returns in mid-February, around the same time that millions of Canadians start counting the dollars they’re going to get back in April or May and deciding what exactly they’re going to do with them. So for the very few that still haven’t answered the question for themselves, here are a few smart way you can spend your tax refund.
Put it into your RRSP
Oh how quickly we forget the panic of just a week ago, when so many of us were scrambling to come up with that maximum contribution amount. If you fell into the majority of Canadians that waited until the last minute to make their contribution (with many coming up short,) there’s no better opportunity than now to put that money in there. It might not be the most fun way to spend your tax refund, but you’ll thank yourself next February.
Put money towards your mortgage or second mortgage
Again, this probably isn’t the most exciting way to spend your tax refund; but consider the benefits. If you get a thousand dollars back on your tax refund and put it into your mortgage or second mortgage, you’ll reap two benefits from it. You could essentially, knock a month (or part of a month’s payment) off your mortgage principal – which will also save you a ton in interest.
Home renovation
Whether it’s a small project like repainting the living room, or a major one like putting on an entire addition, your tax refund is a great time to do it. You’ll build equity in your home, and have a new piece of your home that you love. Even if you haven’t thought about home renovations before, if you still don’t know what you’re going to do with your tax refund, now might just be the time to start thinking about it.
Do something great!
Whatever great is to you, whether it’s taking a cooking class or taking the family away for the weekend, use your tax refund to do something that’s fun and makes you truly happy. Yes, it’s okay to just spend money on yourself sometimes and maybe not use every dollar as wisely as you could, towards an investment or savings. Because taking care of yourself and looking at your tax refund as “found money” can sometimes be a very smart thing to do, too.
