Sure, the first thing a lot of us want to do when we get a tax refund is spend it. But, when you think about it, the money you get back isn't found money - it's not like winning a little lottery. It's actually money you earned over the course of the year... and you've finally got it back in your pocket.
If you think of your tax refund that way, you may want to spend it differently. Have you considered a Tax Free Savings Account (TFSA)? Here are a few of the benefits of putting your refund into a TFSA:
- Pay no taxes on your contributions... so you basically get tax-free earnings
- Pay no taxes on your withdrawals (unlike RRSP withdrawals, which are taxed)
- Contribute up to $5000 every year
- Contribute easily - whenever you'd like, with contribution room carried forward
You could use your TFSA as an emergency fund or to help you save for a large purchase, like a house down payment.
Learn more about the TFSA