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 a Tarot card you flip over? It's always a pleasant surprise when you get a direct deposit or a cheque for you arrives, but imagine what you could do if you have a plan to make the most of the opportunity.

We want you to think about what you will do with your tax refund. The average amount of tax refund that Canadians have received so far this year is $1,893. However, your refund, if any, could be quite different if you received funds from the Canada Emergency Response Benefit (CERB), for example.1 Most people will receive a tax refund, if they have one owing, within eight weeks of filing. If you'd like to see the status of your refund, you can check MyAccount on the Canada Revenue Agency (CRA) website.

Now, many will see the money they receive as an unexpected windfall. Studies suggest that because we regard this as free money, we have a tendency to spend these windfalls less wisely than we do our regular paycheques.2 Save, splurge or invest, we’re deliberately nudging you to think about your options now. That's because evidence shows putting attractive ideas in front of people can often be enough for them to act on those initiatives.3 Read on: See what the choices you make for your tax refund — past, present and future — could say about your personality. And give it some thought. You never know — a better financial decision may be in the cards.

Next move

Big plans for retirement? Book time with a financial advisor to help calculate if you're on track to get where you want to go.

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What you did

Contributed your tax refund to your RRSP or TFSA.

What it may say about you

You are dynamic, responsible and thoughtful. Setting aside RRSP funds for retirement can be the first step to help ensure those plans become a reality. TFSAs allow you to accumulate savings tax-free by putting your money into a wide range of investments.

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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 payment obligations regularly, you may want to think about talking to a financial professional for help to get your spending and bills under control.

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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 and car loans, and certainly paying off credit card bills, are among the most sensible things to do with your tax refund.

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Next move

To save money, one idea may be to use automatic savings to move money into a separate account regularly and not just when tax refund time come around.

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What you did

Your tax refund arrived. Then came the bills, the family commitments and the unplanned-for expenses. One thing led to another. Where did that tax refund go?

What it may say about you

You try to stretch yourself to cover all your obligations, but family demands often overtake your good intensions … and use up your tax refund. It's hard to stay organized because, whenever there's extra money around, it seems like it's already spent before you can make plans for it.

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Next Move

It takes more than one contribution to build up an emergency fund. Consider using an automatic savings plan here as well to make regular contributions to your emergency fund.

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What you did

Used your tax refund to build an emergency fund.

What it may say about you

Take a bow because you are astute, forward-thinking and smart. You know that having an emergency fund — such as three to six months’ expenses easily available — can take enormous pressure off your mind (and your finances) if you are suddenly out of work.

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Getting a tax refund seems to many of us like an automatic process but making a plan for your refund and executing it can sometimes be hard. If you’re wondering what potential money moves you can make with your tax refund, talk with a financial advisor. You might get a glimpse of your future financial health.

DON SUTTON

MONEYTALK LIFE

ILLUSTRATION

VERONICA PARK

  1. 1. Individual income tax return statistics for the 2021 tax-filing season, Canada Revenue Agency, Feb. 24, 2021, accessed March 12, 2021. www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/individual-income-tax-return-statistics.html
  2. 2. Richard Thaler, “Mental Accounting and Consumer Choice,” Marketing Science, Vol. 4, No. 3 (Summer, 1985), pp. 199-214, accessed Mar. 12, 2021, accessed Oct. 5, 2018,
  3. 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 12, 2021,