Getting a tax refund is like finding a crumpled and forgotten $20 in your winter coat. You may see your refund as bonus cash – but don’t let it burn a hole in your pocket. Though you might be tempted to splurge on something fun, using your tax refund wisely will pay dividends. Here are 5 suggestions on how to put your tax refund to work for you:
- Reinvest It – it’s never too early to add to your RRSP, and this will help you get a refund again next year!
- Pay Down Debt – use it to payoff high interest credit cards, and you’ll have more cash in your pocket every month.
- Save for a Rainy Day – put it into a savings account or TFSA for that “just in case” scenario so that you can avoid putting unexpected expenses on credit.
- Donation to Charity – save your money so you can help a good cause and get a tax deduction. It’s a win-win situation.
- Save for an Education – invest in your kids’ or grandkids’ future by putting it into an RESP.