TORONTO, ONTARIO--(Marketwired - Apr 18, 2013) - Do you have an income tax refund cheque coming your way? If so, there is a good chance that you, like many Canadians, are eagerly awaiting its arrival and quietly planning how you will spend this mini windfall.
Before you let that money slip through your fingers Consolidated Credit Counseling Services of Canada, Inc., offers some suggestion to boost your bottom line.
"Most people view their tax refund as extra money, but the government isn't giving you a bonus cheque," says Jeffrey Schwartz, executive director of Consolidated Credit. "This money is part of your annual income. It was withheld from your paycheques to cover taxes, and just like the rest of your income you need to have a plan for how you will use it."
Consolidated Credit recommends consumers start by taking a good look at their budget and financial goals. After determining where your finances stand, consider one of these options before succumbing to the urge to splurge:
Pay off debt - One of the best and most responsible ways to use your income tax refund is to pay down credit card debt. By making a larger payment towards your unsecured debts you can reduce monthly payments, and save money on interest and other fees.
Save for a rainy day - You may be financially stable today, but the slightest change in income or employment status could spell debt disaster. By using your refund to build an emergency fund, you can create a safety net for you and your family.
Invest in your retirement - Use your refund to pay off any RSP loans you may have taken out. If that doesn't apply, put the money toward your contribution for next year Not only is this a good way to ensure you get another refund next year, it's also a way to build a healthy financial future.
Contribute to a RESP - If you're not carrying debt and feel secure in your savings, investing in an education fund is another smart way to use your 2012 return. Contributing to a RESP comes with a 20% federal matching grant on the first $2,500 per child, per year - why not take advantage of the free money?
Splurge - What's on your wish list? A dream vacation, a new car or a 60" TV? If you are on target with your financial goals and spending the refund money is part of that plan, go for it! You earned this money, put it towards that big-ticket goal and enjoy the fruits of your labour.
About Consolidated Credit Counseling Services of Canada:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance. For more information, visit www.consolidatedcredit.ca or call the toll-free phone line at 1.800.656.3920.