Making Your Tax Refund Count

As the deadline for filing your income tax approaches (sorry, we don’t make the rules), you may be looking past all of the forms, receipts, T4s, and so on, and thinking of the fun and exciting things you’ll do with your tax refund.

Well, as much as a dream vacation may seem like a worthy purchase, you might want to consider alternatives to make this year’s tax refund really count towards your overall financial security and wealth. Here are four suggestions to help make that happen:

1. Pay down high interest rate debt. Some retail credit cards and loans have punitive interest rates that may not seem like a lot each month, but they can really add up over time and put a big dent in your financial health. Paying down this kind of debt, or eliminating it entirely, should be among your top financial priorities.
2. Pay down your mortgage. While your home is your biggest asset – it’s also your largest debt. And so finding ways to pay down your mortgage will certainly boost your wealth, and put your closer towards the ultimate goal: mortgage freedom! However, keep in mind that some mortgages impose penalties for unscheduled additional payments. Please check your mortgage’s terms and conditions. Or better yet, regardless of whether your mortgage is with us or any other credit union, bank or financial institution, talk to us and we’ll be happy to help you get the answers and facts you need.
3. Contribute to your RRSP. There are plenty of great reasons to “park” your tax refund in your RRSP. Firstly, you’ll be able to claim the contribution when you file your taxes next year – which will lower your income tax bill. Secondly, your investments grow tax-free for as long as they remain in your RRSP. And thirdly, you’ll be ahead of the curve when the RRSP deadline approaches next year. So while many others are scrambling to make their contribution, you’ll be smiling!
4. Contribute to an RESP. Through the Canada Education Savings Grant and Canada Learning Bond, the Government of Canada can help you save for your child’s future education expenses. Plus, all of the investment income is tax-sheltered while it remains in the plan, which helps your savings grow even more.

Admittedly, none of these options are as exciting as a dream vacation. However, by making your tax refund count this year, you can increase your savings, boost your wealth, and hopefully put yourself in a position to make that dream vacation not just a reality -- but an annual event!

Contact Us – We’re Here to Help!

Not sure how to make your tax refund really count this year? Want to learn more about your options and alternatives? Then call our friendly Financial Advisors today or visit your local branch for more information. We’re here to help!