Ways to use your income tax refund wisely

Watch above: If you’re lucky enough to receive a tax refund this year there are certain things you should know before spending that money. Meaghan Craig asks the experts for some advice.

SASKATOON – Last year, 28 million taxpayers filed returns in Canada and this year’s deadline is just around the corner. Your return for 2014 has to be filed on or before April 30.

For those of you who have the paperwork already out of the way, you may be receiving an income tax refund. The majority of people we spoke to in Saskatoon on Tuesday said they are getting money back and plan to use it wisely.

“We want to get rid of that debt so it was a maternity leave year so we’ve got some debt.”

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READ MORE: How the Family Tax Cut works and who benefits from it

Split on how to spend the money? Here’s what you’ll need to consider.

“Age, lifestyle, where you are in your investment horizon all plays into a factor of what you should do,” said Sean Meshke, CFA Investment Advisor with Prairie Wealth Managment, a division of Scotia Capital Inc.

Experts advise contributing to a tax-free savings account (TFSA) if you’ll need the money in the short-term.

“You are actually going to need something for a down payment on a house or a car or something that you’re going to need financing with in the future the tax-free savings account is usually the better alternative,” explained Meshke.

Watch below: With tax season upon us, Caroline Battista from H&R Block looks at some common mistakes and deductions people make when filing their tax return.

Put the money aside for your child’s future with a registered education savings plan (RESP).

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“If you know you’re not going to need the money for a long period of time and you do want extra tax deduction and you have RRSP (Registered Retirement Savings Plan) room it’s a very good alternative.”

Advisors also urge paying down bad, high interest debt.

“If you’re not going to invest it, very first thing is to pay off credit card debt,” remarked Meshke.

“From there put it on down payments on your house or any lines of credit that you have.”

To make the most of your refund, experts suggest skipping the shopping spree or treating yourself to the cash although it maybe tempting, taking the more practical path will get you ahead in the the long run.

“The more you can save now, the more that savings can compound and grow into the future.”

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