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Turning your tax refund into smart money
TD offers advice on how to stretch your refund further
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TORONTO, April 14, 2015 /CNW/ - With the deadline for filing taxes approaching, nearly six in ten (56 per cent) Canadians expect to receive a tax refund this year, according to a recent TD survey. While the amount received may vary, 44 per cent of Canadians who are expecting a tax refund see it as both a bit of extra money for saving and a bit of bonus money for spending.
"It is tempting to treat your tax refund as 'free money' however with a little bit of planning you might be able to make more of an impact with your dollars," said Linda MacKay, Senior Vice President, Retail Savings and Investing, TD Canada Trust. "You don't have to put all of your tax refund in one spot – talk to your local bank contact or visit any branch so we can help you weigh your options to make the best decision based on your circumstances."
The top three ways Canadians plan to use their tax refund, if they were to receive one, include paying off credit card debt (25 per cent), contributing to an RSP or TFSA (23 per cent) or adding the money to an emergency fund (19 per cent), according to the TD survey. However, some Canadians are also interested in putting the funds towards discretionary spending (17 per cent) or a big ticket item (14 per cent).
MacKay says there are many options when it comes to deciding what to do with a tax refund:
TD's Top 10 Ways to Turn Your Tax Refund into Smart Money
- Build your nest egg: Whether it's $10 or $100 or $1,000, use your refund to contribute to your TFSA and save your tax refund tax free. RSPs can be claimed as a tax deduction on next year's tax return.
- Reduce or eliminate debt: Use that extra money to help pay off debt.
- Be prepared: Save for that rainy day by upping your emergency fund – or creating one.
- Invest in your children: Contribute to your child's RESP – the Canada Education Savings Grant will give you 20 per cent on the first $2,500 you save in your child's RESP each year.
- Invest in yourself: Enrol in training or a professional development course that can help boost your career.
- Invest in your health: Get that gym membership to improve your overall fitness, purchase a wellness tracker to set and achieve personal fitness goals, or spend a little bit more at the grocery store purchasing healthier food options.
- Create some home cents: Put money towards mortgage payments or a down payment on a home.
- DIY: Start a home improvement project to create your happy place while also increasing the value of your home.
- Make some upgrades: Switching to energy-efficient appliances can help save money on utility bills.
- Help others: Giving back is a great feeling so consider donating to a charity or a cause that's important to you. Many donations are eligible for a tax credit.
"Depending on your short or long term goals, you can save some of your tax refund while still splurging elsewhere," said MacKay. "You work hard for your money, so it's important to be thoughtful about your tax refund just like you would other important decisions."
About the TD Bank Group How to Turn Your Tax Refund into Smart Money Poll
TD Bank Group commissioned Environics Research Group to conduct a custom survey of 6,149 Canadians aged 18 and older. Responses were collected between January 20 and February 8, 2015. Canadians and a subgroup of Canadians who expect to receive a tax refund are included in this report.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, plus credit protection and credit travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as at over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
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SOURCE TD Canada Trust
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