A smarter way to put your tax refund to work.

It can be a real challenge to spend our money wisely, especially tax refunds, which may seem like free money! With the average Canadian tax refund at $750 it's tempting to blow it on something fun. However, every astute financial planner, adviser, banker, broker and financial journalist will tell you: If you're getting a refund, you're doing it all wrong.

By definition, a tax refund means you're giving the government an interest-free loan. If you want to get less in a refund, you should reduce the amount of money the government withholds from your paycheque. To do so, you can increase the number of exemptions you claim. It's usually smarter to save the extra money all year long and earn interest on it for yourself.

Additionally, instead of spending your refund on a new outfit or big screen TV, here are some ways to generate future value and accelerate your progress to financial freedom:

* Start saving a down payment for a revenue property. By choosing the right property, the rental revenue will cover your mortgage payments and your equity will increase month after month.

* Invest in your professional development. Take a course or attend a conference that will help advance your career. YOU will always be your best investment.

* Do a home renovation. Investing in strategic home improvements can significantly boost the value of your home, build your net worth and transform your living space into the dream home you've always wanted.

* Make a charitable contribution. Not only will you be helping a worthy cause, you'll lower your tax bill next year.

Whatever you decide to do with your refund, keep in mind how hard you worked for that money, and make sure it's working just as hard for you!

Your trusted mortgage advisor,

Jeff Kerwin