Pay down debt and boost savings with tax refunds this year – but don’t sit on too much cash
Canadians are increasingly planning to save their tax refunds this year, with nearly half intending to do so, up from 29 percent last year. Financial advisors recommend prioritizing debt repayment and building emergency funds over holding cash. They caution that sitting on cash can lead to losses due to inflation and missed investment opportunities.
- ▪Almost 80 percent of Canadians expect a tax refund this year.
- ▪About half plan to save their refund, a significant increase from last year.
- ▪More than a third intend to use their refund to pay down debt, up from about a quarter last year.
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Open this photo in gallery:Almost 80 per cent of Canadians are expecting to receive a tax refund this year and about half are planning to save the money, up from 29 per cent last year, according to a recent survey.Olena Miroshnichenko/iStockPhoto / Getty ImagesShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountReceiving a tax refund can feel like a windfall, even though it’s only the government returning the extra money paid in taxes last year. But Canadians should approach refunds with a waterfall in mind, says Anna Premyslova, senior wealth advisor and portfolio manager with National Bank Financial Wealth Management in Calgary.Specifically, she thinks of tax refunds as a “cascading waterfall” that represents a hierarchy of financial needs.
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