With CRA workers potentially going on strike, it's a great time to visit why getting a tax refund is not always a GOOD thing! (side note - assessments would be impacted by this strike, as well as people getting tax refunds from said assessments).
While receiving a tax refund may seem like a financial boon, it's important to understand that it's not actually a good thing! Here are the top 3 reasons why:
You're giving the government an interest-free loan: When you receive a tax refund, it means that you overpaid your taxes throughout the year. Essentially, you gave the government an interest-free loan that they are only now returning to you. In the meantime, that money could have been earning interest in your own savings account.
You're missing out on investment opportunities: Instead of overpaying your taxes and receiving a refund, you could have been using that money to invest in your retirement or other long-term financial goals. By receiving a refund, you're essentially delaying those opportunities.
A refund can lead to poor financial habits: Many people see a tax refund as "extra" money and use it to make impulse purchases or go on vacations. However, this can lead to poor financial habits and a lack of discipline when it comes to saving and investing.
Overall, it's better to adjust your tax withholdings throughout the year so that you're not overpaying and receiving a refund. By doing so, you'll have more control over your money and be able to make the most of your financial opportunities.