Want To Make a Savvy Decision With Your Tax Refund? Here’s Four Ideas

March 21, 2017 4:44 pm Published by

Tis the season!

The days are getting longer (particularly since we sprung our clocks forward last weekend and had an hour of our lives robbed due to daylight saving time) and the tax returns are starting to roll in. You doknow it’s tax season, right?

Ok good. Just checking.

If you’re eagerly anticipating a healthy tax return this year, then you probably have all sorts of ideas when it comes time to spend it.

Vacation? A sports car to fuel the midlife crisis?

Hey, you’ve earned some fun with all the hard work you’ve done this year. And a shiny new ride might be just what the doctor ordered.

But what if you contributed to your entire family’s future instead this year?

If that sounds like a good idea to you, here are four ways you can invest in some peace of mind this spring.

1. Pay Down Debt

There’s nothing quite like the feeling of watching your debt click all the way down to zero. For most of us, that reality is still a few years away.

So why not get a little bit of jumpstart? Taking a larger-than-normal chunk out of your debt, whether it’s credit card or loan debt, provides that same feeling and gives you a headstart on being debt free earlier. Plus you’re actually saving money in the longrun in the form of interest – sometimes these interest numbers are in the double digits!

2. Invest in a TFSA

Advising people on their finances for as many years as I have has given me a huge appreciation for smart investing.

Well, there’s nothing quite smarter than earning tax free growth.

A TFSA lets you do just that as you create or build on a fund that you can use for a rainy day. Or even a not-so-rainy day!

3. Invest in RRSP’s

Want to get a headstart on next year’s tax deduction? Get a leg up on 2018’s tax season by investing a portion or all of this year’s tax return in an RRSP.

That’s right – we just mentioned 2018’s taxes in an article about 2017! Hey, it’s never too early to get your taxes done, right?

Plus, RRSP’s are a great way to keep building on your retirement nest egg.

4. Invest in RESP’s

RESP’s, or registered educational savings plans let parents, grandparents, or even family friends contribute to a savings plan intended for a child’s post secondary education.

“These contributions are not tax deductible, but any investment income that’s earned within the plan is not taxed until it’s withdrawn.” Source

RESP’s can also qualify for federal grants up to a possible $1,200. Plus, if your children are young? Well, that means there’s a lot of room for growth when they get to (gasp) university age.

Look, everyone looks forward to a little bit of extra cash at this time of the year – cash they can put straight into something new and shiny. We get that, everyone feels that way.

But there’s a lot to be said not only for the benefits of using your tax return on something practical, but the satisfaction you’ll feel is almost worth the investment all by itself.

Almost.

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This post was written by Marco Faccone