It’s that time of year again – tax time! Most of you have filed your taxes, or about to prior to the deadline. Some hate this time of year. However, some also look forward to it and celebrate. The taxpayer who celebrates is expecting their tax refund. That chunk of money that seems like found money, even though it isn’t.

It’s very tempting to splurge, but maybe you should look at some other options before spending that money. Options that could help you with your financial future.

Set up a plan before you spend the money. Slow things down and see what areas of your finances would benefit the most.

Here are a few things to consider before spending your refund.



Savings, TFSA

If you don’t have a slush fund for emergencies or a savings plan set up, now is a good time to consider. We can’t predict the future. Saving money can help you become financially secure and provide a safety net in case of an emergency.

Emergencies come up for any number of reasons: a new roof for your house, out-of-pocket medical expenses, or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.


What are your retirement savings goals and are you on pace to reach them? RRSP contributions are a good way to use your refund, depending on your tax bracket and where you sit with your savings plan for retirement.

Paying Down High Interest Debt

Do you have some credit cards or loans that need some attention? Tax refunds may help. Especially if you can pay of one or more of them entirely. Not only are you saving on interest, but also improving your cash flow, which can of course go back to a savings plan.

Prepay Your Mortgage

Not fond of this one if you have a low rate and other higher interest debt lingering. However, if you don’t, putting extra money toward your mortgage here and there can help you pay it down faster over time. The faster you pay it down, the faster you can say goodbye to your mortgage payments.

Home Repairs Or Renovations

Using your tax refund to get to one of your home projects can be a good idea. Seeing the results will leave you with a feeling of satisfaction. Keeping your home in good state of repair or a renovation can also add value to your home, which can help if or when you sell.

Down Payment Fund

If you are saving to buy a home, you could use your tax refund to begin your down payment fund or top it off.  If you are a first-time buyer, you can consider putting this back into your RRSP and using it for your down payment account.

One of the most popular features of RRSPs is the Home Buyers’ Plan (HBP). This program allows first-time home buyers to borrow up to $25,000 from an RRSP interest free and to pay the money back over 15 years.

You will not only build your down payment fund, but depending on your tax bracket, also, receive a higher refund next year and you are not paying taxes on the amount you contribute.


Leaving some cash aside from your refund just for you, is not a bad idea either. Treat yourself to something you have been desiring and live a little.

There are so many ways you could spend your tax refund. Like everything else having a plan vs. the “seat of your pants” approach will hopefully help you enjoy the money, but also help you reach other financial goals.

Have any questions, need any advice? Visit us at Email us at Call us at (905) 265-0246.

VERICO The Financial Forum Ltd.

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