Manarin Investment Counsel, Ltd.

"If broke people are making fun of your financial plan, you're on track." - Dave Ramsey

People have different views on tax refunds.  On one hand some will say that by receiving a refund you overpaid the government this year and you should have given them less of your money.  And there are those who view a tax refund as a special windfall.

If you do receive a refund this year we hope you put it to good use with a little financial common sense.  Afterall, you did work for this money - it came out of your paycheck, so why not make it work hard for you?

Some quick ideas:

Restock Your Emergency Fund An economic downturn can be much less painful if a few months of expenses are stashed away on the side and readily available.   How much is enough?  Whatever gives you the most peace of mind.

Reduce Any Bad Debt To us a mortgage or a student loan is still debt but they're not always bad debt since the home value has an opportunity to appreciate and a student loan will hopefully provide more earning potential.  Any other high interest consumer debt should be aggressively paid down.

Invest in Your Future Have you addressed the first two points?  Great, then consider taking the funds from your refund and investing in a retirement account.  Each of us is responsible for funding our own retirement so anything that you can save away today will grow over time and pay off later on.

If you do have funds left over from your tax refund to invest, our vote is to be an owner if it is money you know you won't touch for 10+ years.  Common stocks have historically given investors the highest rate of return over the long run but our word of caution is always diversify, diversify, diversify.

Here is the investment model that we often recommend.