I can still see the tree from Google Earth. It is forty-two years older now, but it's still there, overlooking the playground just west of my elementary school. The branches we used as hand and foot holds were so worn from our repeated climbs that they had become shiny, like well-used wooden handrails.
From that perch, overlooking the school and area that day, I could see that a few soccer balls had found their way on the roof of the school. It was the last day of school year and a thought entered my mind - those balls shouldn't go to waste!
I quickly climbed down the tree and within a moment was climbing up the drainpipe on the side of the school, cresting the roof.
Our gym teacher, whose turn it was to supervise that final lunch hour in the playground was not about to let me do that. Just as my hands reached the top of the roof, he grabbed me by the ankle and yanked me off the side of the building.
I fell roughly, about ten feet to the pavement below, scraping my elbow and knee in the process. Ouch! Undeterred, a fire in his eyes, he grabbed me by the shirt and dragged me down the hallway to the administration area.
He was son-in-law to the school principal, and none of us were particularly fond of him. Unable to find Dad, he took me to the gymnasium and sat me in a chair at centre court, commanding me to stay there.
I sat there for hours wondering what my punishment would be. The sun shone in from outside where my class was playing baseball for the final afternoon of school. I jealously overheard other children in the hallway, laughing, running, teasing, relishing their oncoming summer break. The musty dusty gym smelled of fun, but I was having none of it.
Finally, after the last bell rang, once the school was nearly completely emptied and quiet, he came into the gymnasium, dragged a chair over, and sat facing me knees-to-knees. It was awkward, sweaty, and far too close for comfort.
Here it came.
I was dead meat.
He breathed in deeply as if something was deeply troubling him, looked me in the eyes, and finally uttered: "I am so sorry!"
I double took. "You're... hwuh?"
"I don't know what got into me," he confessed. "I saw you there and I lost my temper. I'm so glad you weren't hurt badly. Will you please forgive me?"
He handed me a tattered soccer ball as a peace offering, smiling, hopeful, like a little Brownie, but without the cute.
"Hmmm." The little wagon wheels in my mind eked along. "Opportunity... Nah."
I reached for the ball and took it from him. "I'm going home now," I announced.
Without looking back, I took my little windfall in my good arm and limped to freedom.
If you are expecting to receive a small windfall by virtue of an income tax refund, you may be tempted to spend it - taking a well deserved vacation or doing a minor renovation to your home. You might also consider saving all or a portion of your refund for your future.
The receipt of an income tax refund can be a catalyst for you to implement some of the following strategies:
Address Risk Management Issues:
1. Meet a lawyer to have a Will and Power of Attorney (and/or Representation Agreement) prepared.
2. Ensure you have adequate disability and critical illness insurance.
3. Ensure you have adequate life insurance.
Education Savings
If you plan to help your children or grandchildren with their education costs, you may wish to use your income tax refund to contribute to a Registered Education Savings Plan (RESP). The minimum twenty percent matching federal grant makes this a no-brainer.
Reduce Non-Deductible debt
Consider paying down an outstanding non-deductible debt subject to a higher interest rate.
RRSP or Non-Registered Savings
If you do not have high interest non-deductible debt, then another option for your tax refund is to invest your refund in an RRSP or a non-RRSP account.
Contribute to a Tax-Free Savings Account (TFSA)
A TFSA allows you to make a $5,500 (indexed to inflation) annual maximum contribution. All growth, income and withdrawals are tax-free. You are also able to gift money to your spouse to invest in a TFSA without being caught by the income attribution (i.e. tax claw back) rules.
Emergency Fund
Everyone should have some money set aside for unexpected expenses or a job loss. In general, consider keeping approximately three to six months of living expenses at hand.
This article does not constitute individualized tax or legal advice. Readers should consult their own specialists before implementing a strategy.
Mark Ryan is an advisor in Prince George with RBC Wealth Management, Dominion Securities (member CIPF) and can be reached at [email protected].
