4 smart ways to use your 2022 tax refund

Still deciding what to do with your tax refund? You’ve got options.

Landing a bit of bonus cash can set off a battle of wills in most people. “Fun, Carefree You“ wants to finally check out the purchase that’s been sitting in your online cart for months, or plan a long-awaited vacation. But “Responsible Grown-up You“ knows that this money should be put to good use. Surely there’s a way for you to do both?

 

Top ways to spend your tax refund

1. Pay off your debt

This might be considered 0% fun but 100% stress relief. The average Canadian has more than $20,000 in consumer debt, not including their mortgage. If you have consumer debt, especially the high-interest kind, using some of your tax refund to lower your balance can help reduce the amount of interest you’ll pay in the long run.

 

2. Stash it away for an emergency

Is a vacation considered an emergency after a long Canadian winter? Probably, but the reality is that almost four in ten Canadians say they never or rarely set money aside into an emergency account.

With rising inflation driving up prices, having a few extra bucks available can cushion the financial impact of a job loss, a major illness or injury, or an unexpected car or home repair.

 

3. Make it grow

If you’re saving regularly in your my65+ plan, you’re already taking great steps to build a more secure financial future. By making one-time contributions when you can, even small amounts can make a big difference over time.

We’re partnered with BlackRock®, the world’s largest asset manager, to give you access to industry-leading investment expertise with lower fees. The target date funds in your plan provide a diversified investment that balances growth with risk protection by becoming more conservative as you near retirement age.

Saving in your my65+ TFSA can help you maximize your government retirement income benefits; they also give you more flexibility if you need to access the money before you retire. Find out more about TFSAs.

Making a one-time contribution is easy and takes just a few minutes. Find out how. 

 

4. Have your cake and eat it, too

Depending on how much of a refund you’re getting, you don’t have to choose just one option. You could choose one or two of the options above that will have the greatest impact on your finances and keep some to spend on fun. That way you can do something nice for yourself – both now and for the future.