Your tax refund put some additional money in your bank account this year. Now what should you do with it?

Our Wealth Management expert, Tyler Brack, outlines what you should, could, and want to do with those dollars.


These options might not be the most fun, but in general, they're the most financially advantageous from a practical standpoint.

Pay off any outstanding loans

If you have any outstanding loans, paying them off sooner will save you a lot of money down the road. The interest compounded on loans can make it significantly longer to pay off, and leaving you spending much more than the principal amount. Paying off the loan faster mitigates the power of compound interest. Make sure to pay off the loans with the highest interest first. 

Prepay the mortgage 

If you own a home, consider making a prepayment against the mortgage. Prepayments can help bring down the interest paid over the duration of the mortgage. Check your mortgage contract to ensure that making extra payments won’t lead to penalties.

Load up the TFSA

A TFSA can be a great way to save for mortgage prepayments, home renovations, travel and other personal goals. Consider taking a portion of your tax refund and placing it in a TFSA to accumulate growth tax-free. It’s a flexible savings plan that also allows you to withdraw any funds tax-free.

Contribute to your RRSP

Another smart way to use the money is to stash it away in your RRSP. An RRSP is one of the most effective retirement savings tool available to most Canadians. Your money will grow tax-free, and you do not pay tax until you withdraw it. Another benefit is that RRSP contributions are tax-deductible which means they lower your annual table income for next year.


If you want to be practical with your refund but also spend a little, this is your category.

Renovate to build equity

Whether you want to add some new shrubs to liven up your backyard, or modernize your kitchen – renovating your home is a good use of unexpected money. If you choose the right projects it could increase the value of your home. Not all renovations are valued equally though, so be sure to check with a real estate professional and contractor for advice on putting your money in the right places. Additionally, your home is a place that makes you feel happy, and you can’t put a price on that.


Most people are going to want to spend that refund, and we might just be okay with that.

The pandemic has taken a toll on the mental health of many people. So, if you are in a stable financial position, and buying that new something-or-other with your refund is going to bring you some needed happiness, then go for it. Buy that new handbag, order that new golf club, or treat your family to an evening of takeout food and movie rentals. And if you happen to have some money left over afterwards, see our recommendations above.  


For help with any of these suggestions, or for a more in-depth conversation about wealth management and financial planning, please contact Tyler for a free consultation.

Tyler Brack

Tyler Brack

As Avail CPA’s wealth planner, Tyler works with an integrated team of highly skilled professional advisors to establish clarity, deliver insight, and execute strategies that help clients achieve their financial goals today and in the future.

Service Expertise: Wealth Management , Estate Planning

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