With tax season behind us and our sights set on the summer ahead, many Canadians may find themselves deliberating over the best way to utilize the tax refund they received from the government.
For a more stress-free summer, here are some ideas that will help improve your net worth and reduce some of the anxiety associated with carrying financial debt.
- Pay off credit cards. Pay off the credit card that charges the highest interest first to help reduce stress-related to “debt fatigue,” or constantly paying the same bill over and over without making a notable impact on the balance.
- Pay down the mortgage. If the financial institution allows making lump-sum payments, this option can reduce the term and amount of interest paid over the life of the loan. The lump-sum payment will be applied directly to the principal and not to the interest.
- Load up on a Tax-Free Savings Account (TFSA). A TFSA can be a great way to save for short, medium, and long-term financial goals. Along with saving for future goals, the financial gains inside the TFSA are tax-exempt.
- Renovate. Renovating your home will not only make it feel fresh and new, but it will also help improve the overall value of the home and increase net worth.
- Plan a holiday. Life is about balance. Yes, it is important to pay down debt and reduce financial burden, but a mental break is just as necessary. Finding that balance between paying off debt and enjoying life can be challenging. Make sure to enjoy life and the little things that give pleasure.