Skip to main content
carrick on money

The Canada Revenue Agency reports that close to two of three people who filed their taxes already have received a refund, and the average amount is $2,113. That’s enough to do something for your personal finances with lasting benefit. Here are some ideas:

  • Add the money to the down payment for your next vehicle purchase: Financing a new vehicle these days is alarmingly expensive as a result of high interest rates and prices. The more you put down, the less you need to borrow.
  • Add it to a child or grandchild’s registered education savings plan: Contribute $2,113 to an RESP and you get $422.60 added to the plan via the Canada Education Savings Grant. A guaranteed 20 per cent return.
  • Add it to a first home savings account: The contribution will generate a tax refund for the 2024 tax year, and you’ll benefit from tax-free compounding in the account. You can withdraw money from an FHSA tax-free as well.
  • Add it to your registered retirement savings plan: Puts you on the path to another tax refund for the 2024 tax year, plus you benefit from tax-free compounding in your RRSP over the years.
  • Buy a one-year guaranteed investment certificate: With a rate of 5 per cent, still widely available from alternative banks, you’re guaranteed to have $2,218.65 in 12 months. If you use a tax-free savings account, you can shelter your GIC interest from tax.
  • Pay down debt: The interest rate on card debt is around 20 per cent and won’t budge when the Bank of Canada starts lowering rates later this year. A home equity line of credit typically has a rate around 7.7 per cent these days, which means expensive minimum monthly interest-only payments if you have a large balance.
  • Start or build up an emergency fund: The latest numbers from the job market suggest some slippage, and that in turn raises the risk of layoffs and reduced hours of work.

Subscribe to Carrick on Money

Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.

Rob’s personal finance reading list

High house prices? Yes, please

Here’s one of the best takes I’ve seen recently on the state of the housing market. Not the most encouraging read, but realistic in its assessment of where affordability is headed and how high house prices benefit a lot of people. Now, for a sign of the times in our dysfunctional housing market – a Reddit discussion on saving money on rent by living in a car.

Living the soft life

The Guardian reports on young adults pulling back from the work force to live what’s called the soft life. “For millennials and the younger generation Z and Alphas, who may never be able to afford to buy a home or retire at a reasonable age, there is a growing feeling online that hard work is fortifying a system that, at best, is giving them nothing back …” Someone who has less than zero sympathy for what young adults are up against is U.S. personal finance guy Dave Ramsey.

The other insurance you might need

Life insurance is a no-brainer if you have dependants, specifically kids. But you’re more likely to become critically ill than die, which brings us to critical illness insurance. Here, a personal finance blogger works through her own thinking this type of insurance.

Free TV

A roundup of streaming TV services, with a focus on freebies. I’d love to hear from people who have cancelled their cable TV service – what streaming services do you subscribe to, and how do you watch things like the NHL playoffs or election night coverage?

Reader comment: “I have been resisting the concept for years, but in March I finally broke down and went through the trouble of getting access to CRA My Account. I enjoyed having access to all this information electronically and was happy not to have to dig into my files of paper federal tax slips. But the CRA had another delightful surprise waiting for me. My account had a notification letting me know that I had an uncashed cheque from the CRA dating back to 2002! (I had moved provinces that year and I guess my tax refund did not get to my new address). It was easy to ask them to reissue the cheque. And so, this week I pocketed $200 that had been destined for me 22 years ago … and I owe that windfall to CRA My Account.”

Do you have a comment or question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

Tools and guides

A list of best credit cards for newcomers to Canada.

In the social sphere

Social media: Financial advisers on group RESPs, which stands for registered education savings plans. Avoid.

Listen: I spoke to CBC Radio’s Robyn Bresnahan about renting and the cost of home ownership for an episode of her This is Ottawa podcast.

Money-Free Zone: I just bought tickets to see George Clinton and Parliament-Funkadelic at the Ottawa Jazz Festival in June. Here’s some classic Funkadelic – Good Thoughts, Bad Thoughts, from the 1974 album Standing on the Verge of Getting It On. Twelve minutes of psychedelic guitar amazingness.

More PF from The Globe

  • Seven ways the 2024 federal budget affects your finances, from selling your cottage to RESPs
  • Ottawa’s plan to count rent payments toward credit scores needs safeguards, tenant advocates say
  • Divorced parents are supposed to share kid costs fairly. But that’s often not the case
  • Why younger retirees who need to access their retirement savings should set up a RRIF

More Rob Carrick and money coverage

Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.

Even more coverage from Rob Carrick:

Go Deeper

Build your knowledge

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe