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SPRINGWe’re getting a large tax refund. Do we pay down our line of credit and/or mortgage or invest in an RRSP? Help!

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Q: We’re getting a large tax refund. Do we pay down our line of credit and/or mortgage or invest in an RRSP? Help!

Diana says....
You may be able to do more than one. First off, I would pay down some of the line of credit. From personal experience, it tends to grow without discipline, and should only be used for emergencies—say, a falling roof. Next, if you put some money into an RRSP now—yes, long before next year’s RRSP cut-off—you’ll get a double whammy bonus. How so? That early RRSP contribution will start working for you immediately as a tax-sheltered investment and will also reduce your income taxes for next year.

Diana Cawfield is an award-winning financial writer with more than 10 years experience. Send her your questions here.