What to do with an End of Year Windfall?

by Achieva Financial
Dec December 04

At the end of the year, it is common to receive an annual bonus or other windfall. When you receive some extra money, it can be tempting to spend it – perhaps on a new gadget, vacation or a nice night out. Instead, use the windfall to boost your savings.

You have a few options for your windfall: if you have RRSP or TFSA room remaining, you can contribute to one of them. Consider maximizing your RRSP or TFSA growth by investing your money in an Achieva GIC. With an Achieva GIC your funds a protected from risk with guaranteed returns, and receive among the highest GIC rates in Canada. If you add your funds to your RRSP, you have the added benefit of reducing your current year’s taxes. With a TFSA, your interest will compound tax free.

If the windfall you received is large, such as from an inheritance, or the sale of a business, consider sitting on the money in a high interest savings account for a few months, living the same lifestyle you are accustomed to, prior to making any major financial decisions. This will give you time to assess your personal situation and what you want your future to look like, allowing you to make decisions that are right for you.

By resisting the temptation to act on your excitement and spend your bonus or windfall, you will be investing in your own financial security and future.