The deadline for Canadians to file their taxes is still a few weeks away, but if you happen to have filed yours early and are anticipating a refund, you may be left wondering, “What should I do with the money?”

While it could be tempting to splurge on something nice, consider how you can invest and make the most of that extra cash. Of course saving your money won’t bring the same instant gratification and excitement as going on a shopping spree. But when you make smart investment choices to improve your financial situation and grow your money over time, it can lead to a much bigger payoff in the future. Want to retire in style, debt-free? Have a doctor-in-the-making you want to help send to medical school? Here are three smart, guilt-free ways you can invest your tax return, so you get closer to reaching your long-term financial goals. 

Pay down debt—especially with high interest rates

If you’re carrying debt and paying interest, it might make sense to use the money from your refund to pay some of it down. Credit cards, for example, are notorious for having high interest rates of 20% or over (ouch!) By paying off some of your debt with your refund, you’ll be able to lower your current balance and pay less interest, which could mean more money in your pocket every month. 

Invest in yourself

You may have heard that investing in your personal development can pay off. But what last year showed us was that, especially during uncertain times, acquiring new skills is valued more than ever. Using some of your tax refund for classes or online courses will not only help you improve professionally and personally, but it can also lead to more opportunities, financial success, increased productivity and achieving a better quality of life. Thanks to the internet, you have unlimited educational resources right at your fingertips from online conferences to webinars and podcasts. Another bonus: you’ll be setting a good example for your future scholar on the importance of continuous learning. 

Save and invest your moneyfor your child’s future!

Your refund can go a long way for your child’s future when it’s invested in a Registered Education Savings Plan (RESP). Their time for post-secondary school will be here before you know it!  Plus you get access to grant money from the government of Canada.

Yes, it’s true! The government gives you money for saving in an RESP.

Through the Canada Education Savings Grant (CESG), the government matches 20% of your RESP contributions. That means your child’s RESP can get a boost of up to $500 every year from grant money (or more if you didn’t maximize your annual contributions from previous years.) The CESG contributes a lifetime maximum of $7,200 per child, which can help cover costs like tuition, rent and even their late night eats while cramming for a test. 

Another good reason to invest your refund in an RESP? Tax benefits.

While your money is invested in a plan, you don’t have to worry about paying taxes on any income you earn. The income is only taxable when your beneficiary (i.e. your child)  withdraws the money for their post-secondary education. And since they’ll be a student at that time, making little to no taxable income, it’s quite possible that they won’t have to pay any tax.

Like we’ve said before, education is always a good investment. 

Unlike last season’s pair of shoes, you won’t regret investing in your child’s education and making their dreams come true. Saving for their post-secondary education now will help set them up for future success because they won’t be burdened by debt from having to take out hefty student loans.

This tax season, make the most of your tax refund and invest it in a CST Spark RESP. We offer a smart, simple and convenient way to save for your child’s education with an investment strategy that’s built for RESPs. We know our stuff when it comes to RESPs (it’s all we do!) So, whether you’ve got questions about how RESPs work or need help applying for government grants, we’re here for you. Just give us a call or chat with us online.


CST Spark Education Portfolios is only sold by Prospectus.

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