Hurray! You’ve done tax season like a boss and now you’ve got a refund. You want to keep your adult on and be financially responsible with your refund – AWESOME. Now what do you do?
First, reward yourself for being responsible. Seriously. Give yourself a little something something for getting that refund in the first place! I’m not saying go blow the entire amount on a vacation you can’t afford, but treat yourself and have some down time so that your next decision isn’t adding to existing stress.
Now let’s get to the money stuff:
First, write down how much debt you have. If you have high-interest debt (anything over 5%), pay it off before you do anything else.
Second, write down how much of an emergency fund you have. You need three to six months’ worth of expenses socked away in a savings account for a rainy day.
Third, write down your contributions to your RSP and TFSA, the two tax-sheltered accounts available in Canada. If you have room, put the money there.
Those are the three ingredients to taking care of yourself financially.
Until you can check those three things off the list, don’t do anything else with your money.
Got those things taken care of? Awesome! Now let’s talk about taking your refund and making it GROW.
If you have low-interest debt, it might make sense to invest while you’re paying it down. Getting started on investing is the most important step, even if you’re only opening an account with $20. We believe all portfolios are created equal, because you can buy fractional shares and invest no matter how much you’ve got to start. In fact, stuffing your cash under your mattress until you’ve got a more sizable amount or waiting until a “better time” to get into the market guarantees you are going to lose money against inflation.
It’s time to tick one more box off the adulting checklist – and you will be glad that you did! Come talk to your MOOLA Financial Advisor about getting started on investing.