Five ways to maximize the value of birthday money
- Pay down your credit card or line of credit. Even twenty-five dollars from your auntie in Halifax can add up to more than a few cents of savings on interest payments.
- If you have contribution room in your TFSA, put it in there and let it grow tax free.
- Put it in your emergency account. You can never really have too much money on hand in case life goes sideways.
- Put it towards something big that you are saving for.
- At the very least, cash the cheque and put the money in a coffee can under your bed for a rainy day.
And, just in case you have a rich uncle who likes to write big, fat birthday cheques, breathe easy. In Canada there is no income tax on cash gifts unless the recipient is your spouse or minor child.
Copyright 2011. Laura Thomas. All Rights Reserved.
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