For centuries, humans have looked to the stars to predict their fate. But what might the future hold for your tax refund? Do you have solid plans for it or is its fate as mysterious as what Tarot card you flip over? It's always a pleasant surprise when a cheque for you arrives, but imagine what you'd do if you have a plan to make the most of the opportunity.

Full disclosure: We want you to think about what you will do with your tax refund. The average amount that Canadians received from their tax refund last year was $1,850, although this year, because of the pandemic, your refund could be quite different.1 Many will see the money they receive as an unexpected windfall. Studies suggest that because many people may regard this as "free" money, we have a tendency to spend these windfalls less wisely than we do with our regular paycheques.2 Save, splurge or invest, we’re deliberately nudging you into thinking about your options now. That's because evidence shows putting great ideas in front of people can often be enough for them to act on those initiatives.3 So, read ahead and peer into the future to see what you could have done with your tax refund. And give it some thought. You never know — a better financial decision may be in the cards.

Next move

Big plans for retirement? TD Direct Investing clients can use goal planning tools to help build and track your progress toward the financial goals that matter to you.

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What you did

Rolled your tax refund into your RRSP or started an emergency fund.

What it may say about you

You are dynamic, responsible and thoughtful. Setting aside funds for retirement is the first step to help ensure those plans become a reality. Plus, this year we all learned that the unforeseen can knock any financial plan sideways. Having an emergency fund of cash on hand is one way to help meet financial needs if you are suddenly without an income.

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Next move

While it feels great to treat yourself, now could be the time to check in and see what shape your finances are in.

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What you did

Splurged on something you've had your eye on.

What it may say about you

You treated yourself — and that's OK. If you finally replaced your old TV, made home renovations or put the first payment on a new car — congrats. This year has been filled with uncertainty and we should reward ourselves and our families.

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Next move

If you're missing your credit card obligations regularly, you may consider using an online app like TD MySpend for iOS or Android to monitor your spending and bill payments.

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What you did

Used your tax refund to pay down debt.

What it may say about you

You are reliable and pragmatic, because you realize that saving and investing can be hard if you have outstanding debts pulling you down. Paying down commitments like your line of credit, car loans, and certainly paying off credit card bills, can be one of the most sensible things to do with your tax refund.

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Next move

You can make a plan for your money before you receive it. You may be surprised how far some forward thinking can take you.

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What you did

Well, the tax refund went into your bank account and faded slowly away….

What it may say about you

"Life happens," but you could get better organized. You did have vague plans for that money. And then one thing led to another and you forgot about it. And then, when you really needed it, it had vanished. And the same thing happened exactly the same way last year.

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Next Move

Think about what other financially savvy moves you could be making: Is your TFSA maximized? Your kids' RESPs? Do you have enough insurance?

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What you did

Used your tax refund to make an extra payment on your mortgage.

What it may say about you

Take a bow because you are astute, forward-thinking and smart. You know making an extra mortgage payment can have a big impact and doing it every year can shave years off your mortgage and the interest you’ll pay.

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Getting a tax refund may seem to many of us like an automatic process but doing something smart with it can sometimes be hard. If you’re wondering what great money moves you can make with your tax refund, talk with a financial advisor or planner soon. You might get a glimpse of your future financial health.

DON SUTTON

MONEYTALK LIFE

ILLUSTRATION

VERONICA PARK

  1. Individual income tax return statistics for the 2019 tax-filing season, Canada Revenue Agency, March 12, 2019, accessed March 12, 2019. https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/individualincome-tax-return-statistics-2017-tax-filing-season.html
  2. Richard Thaler, “Mental Accounting and Consumer Choice,” Marketing Science, Vol. 4, No. 3 (Summer, 1985), pp. 199-214, accessed Oct. 2, 2018, accessed Oct. 5, 2018,
  3. Kim Ly, et al, “A Practitioner’s Guide To Nudging,” Research Report Series Behavioural Economics in Action Rotman School of Management, University of Toronto, p. 7, March 15, 2013, accessed March 4, 2019,