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What’s the best way to spend my tax refund?
Well, if you are expecting an income tax refund this year you will have to decide on how to allocate those funds. Don’t forget that this isn’t just a bonus cheque, but these are funds that you paid to the government that was in excess. With a refund you can really take advantage of putting this to great use, so here are a few ideas for you:
- Pay Off High-Interest Debt
A wise choice for your tax refund would be to pay off any high interest debt. Reducing a portion or all of your debt will save you between 10-30% percent per year in interest charges. Most credit cards generally have high interest rates, and therefore carrying a balance on these cards is not recommended.
- Increase Your Emergency Fund
Do you already have your emergency fund? These are funds that you could use to pay for an unexpected expense. It is always better to pay cash for these expenses, so it is recommended to have at least 3 – 6 months of income in your emergency fund. In addition to paying down some debt, this would be a good consideration to add to your emergency fund.
- Make an Extra Mortgage Payment
If all of the above items are taken care of, you can still find another way to put this money to work by making an additional mortgage payment. When you make an additional payment, it is applied directly to the principal. This instantly gives you more equity in your home, saves money on interest over the term of the loan, and even reduces the time it takes to pay off the loan.
Why not make an RRSP contribution, or put the funds towards your TFSA. Keep thinking about the future and contribute to your retirement goals.
Yes, this is another option for your tax refund assuming that your finances are in order. Maybe it’s time to treat yourself to something nice.
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The number of possible ways of playing the first four moves per side in a game of chess is 318,979,564,000.
Stewardesses' is the longest word that is typed with only the left hand.
Bullet proof vests, fire escapes, windshield wipers, and laser printers were all invented by women.
More people are killed annually by donkeys than die in air crashes.
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“Every artist was first an amateur."
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