Well this will certainly be good news for our Finance Minister, Jim Flaherty, and the Bank of Canada governor, Mark Carney! A recent BMO survey finds that 40% of us that are getting money back from our RRSP tax refund are planning to use the money to pay down household debt. As we said, that’s good news for those in Ottawa, who have been warning us about our rising debt levels for a year and a half now; and should back up the claims of those that have been saying our debt situation isn’t nearly as dire as it was in the United States just before they went into the recession. And as for the other 60% of those getting a refund? Turns out that for the most part, they’re not using the money frivolously either!
That 40% is actually slightly down from last year, when 42% of Canadians said that they’d be using their RRSP tax refund to pay down debt. But the debt we’re planning on paying off this year ranges from everything from household bills and credit cards to mortgage and second mortgage debt.
Other stats from the survey showed that one in five of respondents (for a total of 21%) surveyed said that they’d be putting the money back into investments, either in the form of a TFSA or back into an RRSP. While putting money towards investments is always good, this number was also down from last year’s, when the survey found that 33% would be putting the money into other investments.
If we’re not paying off our debt or socking our money away for a rainy day though, it seems Canadians like to increase the value of the assets they already have. This year, 10% of Canadians said that they’d be putting the money towards home renovations, which is just slightly down from 11% last year.
Interestingly, even though only a small minority of us (11%) are going to be using our RRSP tax refund for travel or leisure, that’s the only category that has increased since last year, when it sat at only 9%.
With April here, it has a lot of people wondering what they’ll do with their “found money” (although most who invest in RRSPs realize this is a bit of a misleading term.) The Canada Revenue Agency stated that the average for the total tax refund last year was $1,506 – a good chunk of change for splurging on any of these things!
