With so many priorities to balance it can be difficult deciding how to use extra cash. A financial planner can help you weigh your options.
Consider keeping 3-6 months of living expenses in an account that’s easy to access. You can contribute up to $5,500 per year in a Tax-Free Savings Account (TFSA), where growth and income is tax-free, and you can withdraw your money at any time.
If you have outstanding balances on a credit card, line of credit or loan, reducing or paying off this debt could free up cash to reach other goals.
Think about topping up your Registered Retirement Savings Plan (RRSP) or TFSA contributions to make your savings work as hard as possible for you.See Getting More from My RRSP and TFSA
Consider contributing to a Registered Education Savings Plan (RESP). With built-in tax benefits and government grant programs, it’s the best way to save for a child’s education.See What Kind of RESP Should I Choose?
If not, consider using your extra cash to create a Will and Power of Attorney (Mandate in Quebec) and to make sure you have sufficient life and disability insurance coverage.See Estate Planning is More than Just a Will
Receiving an Inheritance or Lottery Winnings
How Can I Be a Smart Investor
Estate Planning is More Than A Will