Are you one of the over 1.2 million Canadians who will receive a tax refund? If you’re anywhere near the average amount, your bank account is smiling with a nice, $2,295 deposit. 

That fancy EQ3 couch is calling you. So is the vacation you keep putting off. 

But here at Lotly, we know how $2,000 can grow for you as a real estate investment. 

In fact, our investors often invest similar amounts to that into our fund to earn on residential housing market appreciation — without down payments, mortgages, maintenance or any other headaches!

But back to your tax refund. How else can you spend it responsibly? Everyone is different, but we’ve rounded up some generally safe ideas for you to mull over. 

1. Pay off high-interest debt

What a coincidence — Canada’s record-high credit card balances this past year happen to coincide with the average tax refund amount. If your credit card balance is sitting around the average of $2,121, your tax refund can save you a lot of interest down the line. 

You might have other debts weighing on your credit, wallet, and mind, but we recommend focusing on the ones with the highest interest. 

• Reward: Eliminate interest costs.

2. Level up your skills

Have you heard? Canada is experiencing a skills shortage, with employers scrambling to fill in healthcare, STEM, digital, and trade skills. Education might not be the highest-return investment if you’re looking to learn a new hobby — but you’ll definitely see a return if you opt for an in-demand skill. 

Instead of learning an entirely new skill, you might consider upskilling, which builds on your existing skills and acts as bargaining chips for raises and career advancement. Some popular fields/niches with skills linked to higher salaries include data analytics, web development, programming, leadership, and UX/UI design. 

• Reward: Improve job income and position.

3. Add to your RRSP

Talk about coming full circle! RRSP contributions are tax-deductible, which means you can use your tax refund to actually lower your taxable income in the next year. This saves you from paying more taxes. Plus, you’ll feel secure putting away some money for your future. 

Remember, you can contribute up to 18% of your income, with a maximum RRSP contribution of $31,560 for this year. 

• Reward: Reduce taxable income and save for retirement.

4. Improve your home

Do you already have a property? The constant maintenance and fixes can easily eat up your savings, so sometimes you just let things go. Catch up on bathroom caulking and retiling, landscaping, water leaks, and other small repairs to keep your property functioning properly. 

This is also a good time to invest in furniture — ideally, pieces that improve your life more than just aesthetically. For example, a standing desk minimizes back problems if you work remotely. 

• Reward: Maintain property value and prevent future home expenses.

5. Create an emergency fund

Experts recommend an emergency fund of $2,500 to $5,000, or three months’ worth of expenses. Of course, that figure might look higher if you live in the GTA. Still, padding up your emergency fund is a fantastic way to spend your tax refund.

You might automate a set amount of money into your emergency fund each month. A lump-sum payment might give you the juice you need to redirect those monthly withdrawals to debt repayment or other pressing home expenses. 

• Reward: Mitigate the risk of job loss or impact of health emergencies.

6. Take care of yourself

Do we mean a weekend getaway to the Scandinave Spa? Not quite. But your health is your most vital asset — even more vital than a Toronto property. We love how Psychology Today breaks down health as an asset, something that brings you ROI. 

If you struggle with any ailments like diabetes, mental health hurdles, or uncertainty around any health problems, your tax refund might give you the kick to start healing. 

Maybe that looks like regular therapy sessions, or a robust personal training regimen. Whatever it is, remember the old adage that health is wealth!

• Reward: Functionality, ability to create income, enjoyment of life.

7. Invest in real estate with Lotly!

You’ve heard the phrase every penny counts. But when it comes to a down payment in Greater Toronto, $2,000 doesn’t feel like it makes much of a dent. For investors that want to tap into real estate without the eons of time it takes to save up for a down payment, Lotly is the solution. 

Our investment model allows you to co-own Toronto real estate with as little as $1,000 (although more is always welcome!). Your contribution will help prospective homebuyers get into a home. The homebuyer turned homeowner covers all mortgage, tax, maintenance, while your equity in their home grows with the market. Then somewhere between 5-10 years, they’ll refinance or sell to give you back your initial investment plus appreciation. We project an annual return of 15%, and remember, real estate investing is a game best played with as much time as possible.

• Reward: Real estate appreciation without the demands of a down payment, mortgage, or property management.

Our biased advice? Use your tax refund to invest in one of the most stable endeavours there is: real estate investing in the GTA. And luckily, we can help.