Average Tax Refund is $1400. How Do You Spend Yours?
Filed under: Taxes
One friend said he was considering using his refund to redo his kitchen floor and another said that while she knows she should use it as a downpayment on a house, she'll probably use it for cosmetic surgery.
We're sure she's kidding since she doesn't need cosmetic surgery.
The Canadian Revenue Agency has reported that the average refund is $1,400. A recent TD Canada Trust Report on Savings found that 47 per cent of Canadians say they will use their return to pay off debt, 34 per cent will save it, and 16 per cent will invest their refund.
Not everyone has debt repayment in mind. Out of the Canadians surveyed, 17 per cent would go shopping and 15 per cent would go on vacation.
Kevin Moffatt, Vice President at TD Canada Trust says that there are a few ways to use your refund sensibly.
Pay Down Debt All eyes are on Bank of Canada's Mark Carney. Rumours have been swirling that interest rates are on the increase and that means you'll be paying more on your consumer and non-consumer debt.
Save for Your Future (or for when your basement floods)
You could lose your job or your basement might flood, whatever happens, at least you'll be prepared with your emergency fund.
Contribute to Your RRSPS and TFSA
We recently wrote that one-third of Canadians aren't saving enough. If you're one of the lucky ones who get a refund this year, consider putting it in an RRSP or TFSA. Compound interest is a lovely thing.
We'd be hypocrites if we didn't tell you to splurge occasionally. If you're in good shape financially, then take that refund and do something fun. Indulge in that piece of technology or go on vacation. Only do it if you can though. You don't want to lose in the long term because of short term gain.