25 money moves to make by age 25 in Canada

1. Open a TFSA

A tax-free savings account (TFSA) is a fantastic tool for Canadians to save and invest. Contributions are made with after-tax dollars, but any growth in your investments and withdrawals is completely tax-free. It’s perfect for both short-term goals, like a dream vacation or a car, and for socking away money for the future. For 2024, the TFSA contribution limit is $7,000 a year.

If you expect to use your TFSA for short-term savings instead of investing, Natasha Knox, a Certified Financial Planner (CFP) and founder of Alaphia Financial Wellness, recommends shopping around for the best interest rate. (Find a financial advisor near you.)

Some institutions offer promotional rates, so you can generally find a good rate you feel comfortable sticking with. And remember that big banks don’t always have the highest rates—you should also consider offers from small players like alternative banks and cooperatives. 

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2. Go beyond savings with an investment account

Think outside traditional savings accounts and dip your toe in investment options for more financial growth potential. This could include a brokerage account for buying stocks and exchange-traded funds (ETFs), a guaranteed investment certificate (GIC) for a sure return, or a mutual fund for professionally managed diversification.

3. Save for your first home with an FHSA

The first home savings account (FHSA), which launched in 2023, allows Canadians to save up for their first home by making tax-deductible contributions of up to $8,000 per year, up to a lifetime limit of $40,000. Similar to a TFSA, any growth within the account is tax-free, making it an excellent choice for first-time home-buyers.

4. Build your credit score 

Start building good credit now with a low-limit credit card. By paying your balance in full each month, you’ll establish a positive credit score. Your credit score is a three-digit number from 300 to 900 that shows creditors how well you manage your money. A good credit score will be important for accessing good rates on mortgages and loans in the future.

5. Monitor your credit score

Regularly check your credit score (once a year is recommended) to ensure there are no errors or fraud—and to track your progress. In Canada, a good credit score is generally considered to be above 660, while anything below 600 is considered fair or poor. There are plenty of free credit score monitoring services available online to choose from.

6. Choose a credit card that offers cash or points rewards

Many credit cards offer cash back rewards or points for everyday spending. Look for a card that offers rewards that align with your spending and lifestyle habits and your goals. For example, are you partial to cash-back for the flexibility of cash? Or do you prefer travel rewards so you can save them up and redeem them toward travel costs? 

7. Save up for a move

According to a recent survey from Rentals.ca, the average rent for a one-bedroom apartment in Canada jumped 9.3% annually in May (2023 to 2024) to $2,202. If you’re saving up for your first place, you’ll have to factor in all the costs of moving out on your own, which typically includes a first and last months’ deposit. And don’t forget about the cost of movers (even friends will need beer and pizza), new furniture and any small appliance needs, internet hookup and other living expenses. 

8. Start an emergency fund

Life throws curveballs sometimes, and having an emergency fund helps you weather unexpected financial storms, like job loss or car repairs. 

Knox says the general rule of thumb is to have three to six months of expenses saved up, depending on how secure your income is and what your financial responsibilities are. For instance, home owners may face unexpected spends that people who are renting do not need to account for, she says. That could be an appliance breaking or unexpected repairs above and beyond regular maintenance.

If you still live at home, get a head start on an emergency fund now while you have fewer financial obligations. 

8. Pay off student loans

If you have student debt, create a repayment plan using the SMART goal method, which stands for specific, measurable, achievable, relevant and time. Or try a financial app, such as Moka or Debt Manager, to help you create a plan and track progress for paying down debt.

9. Automate your savings

Setting up automatic transfers from your chequing account to a savings account is a great way to “pay yourself first” and build your savings by simply “setting it and forgetting it,” as they say. 

Knox explains another way to set up automatic savings is at work through a registered retirement savings plan. “Some employers match RRSP contributions deducted from your paycheque, which is another way to automate your savings and investments.” It’s basically an “instant raise” you give yourself by taking advantage of those savings. “That [would be] my first choice,” she says. “The other would be to set up an automatic transfer to align with paydays to a savings account.”

10. Do your own taxes

Understanding how to file your own taxes in Canada empowers you, saves you money on filing fees, and helps you better understand how taxes and maximizing your return work, which can be particularly helpful if you are self-employed or have a side gig. The Canada Revenue Agency (CRA) website offers free resources and guides to help you get started.

11. Open a My Account with the CRA

Now it’s time to create a CRA My Account, which will become your tax management hub and allow you to view your tax information online, file your return electronically, and make payments. It’s a secure and convenient way to manage your yearly taxes. You’ll also find payment information about the Canada Carbon Rebate, Canada Child Benefit, and more. 

12. Know your budget top to bottom

Creating a budget helps you track your income and expenses and ensures you’re not spending more than you earn. Whether you prefer a simple spreadsheet (as Knox says, “There’s nothing wrong with an Excel spreadsheet.”) or a budgeting app, find a system that works for you, she says. Popular budgeting apps include Koho, YNAB and MoolahMate. (Download this free budget template.)

Another popular budgeting strategy is the 50/30/20 rule: Allocate 50% of your income toward needs, 30% toward wants, and 20% toward savings and debt repayment. Regularly reviewing where your money is going helps you stay on track and adapt as your income or expenses change. 

“Just because one approach doesn’t work [for you], it doesn’t mean that creating and adhering to a spending plan doesn’t work,” Knox says. “It just means that you haven’t found a system that works for you—yet.”

13. Build your professional brand

Let’s face it, first impressions matter. Having a professional online presence can benefit you in various ways. Whether you’re actively seeking employment, plan to be self-employed or simply want to showcase your skills, create a resume, an online portfolio and LinkedIn profile that’s consistent, cohesive and reflects you as a professional. When opportunity strikes, everything will be current and ready to go.

14. Comparison shop for adults spends

When it comes to big-ticket items like your first car, comparison shopping can save you hundreds, even thousands of dollars. Get quotes from multiple dealerships and insurance providers before making a decision. (Check out our list of the best used cars in Canada.)

15. Build strong references

Building positive relationships with professors, employers, colleagues and landlords can provide valuable references down the road. Strong references give you a competitive edge in the job market and speak to your work ethic and skills. So nurture your network—you’re guaranteed to need them.

16. Plan your dream trip

Planning, budgeting and going on a trip abroad is a masterclass in budgeting—and it’s fun and rewarding. It tests your ability to source deals, manage expenses, and make informed financial decisions. Always ensure your passport is up-to-date and factor in hidden costs like travel insurance and currency exchange.

17. Read a personal finance book

If knowledge is power, then it’s time to sink your teeth into a relatable personal finance book to empower your money moves. It can provide valuable insights, strategies, and motivation to manage your money effectively. Search for popular new releases online or on your favourite audiobook app. Knox also recommends reading the following:

• I Will Teach You To Be Rich, by Rahmit Sethi (Workman Publishing Company, 2019)
• The Little Book of Common Sense Investing, by John Bogle (Wiley, 2017)
• The Psychology of Money, by Morgan Housel (Harriman House, 2020)
• The Millionaire Next Door, by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D. (Lyons Press, 2018)

18. Stay informed about financial news

Staying informed about financial news and trends in Canada allows you to make informed decisions about your money. Dedicate a few minutes each week to read a financial article or two, or listen to podcasts geared towards Canadians. The easiest way to get your weekly dose of knowledge? Sign up for a MoneySense newsletter.

20. Practice negotiating to boost earning potential

Negotiating your salary, a freelance rate or even the price of a car might seem scary, but the more you practice, the more comfortable you’ll be. According to TalentCanada.ca, only one-third of Canadians negotiate their salary, and Canadians earning more than $100,000 per year are most likely to be among the negotiators. Remember the old saying, “If you don’t ask, you don’t get.” 

21. Try a digital money jar

Cash stuffing with envelopes isn’t a new concept but recently re-emerged on TikTok and YouTube as a popular money-saving strategy. Apps like HyperJar and Qube Money take the viral concept into the modern age and allow you to create virtual “jars” for different savings goals—think rent, bills and entertainment—offering a fun and visual way to track progress and prevent overspending. Once the allotted budget for a particular category is spent, it’s spent. 

@streetcents Strut your stuff #CashStuffingASMR #CashStuffing #BudgetingTips #CashEnvelopes #TeenMoney #StreetCents ♬ original sound – CBC Street Cents

22. Audit your subscriptions

We all subscribe to various online services and apps, but how often do we revisit them? Regularly review your monthly subscriptions and cancel anything you no longer use or need. A few small cancellations can add up to significant savings over time.

23. Consider a side hustle

If you have the time and energy, a side hustle can be a great way to generate extra income, from freelance writing to pet sitting or online tutoring. Choose something you enjoy to avoid burnout.

24. Control impulse spending

Impulse spending can quickly derail your financial goals. Learn to differentiate between needs (essentials) and wants (desires) and develop strategies to curb impulse purchases, like waiting 24 hours before buying something non-essential.

25. Calibrate your spending while living at home

If you’re fortunate enough to live at home and save money, that’s fantastic. But avoid falling into the thinking you can spend freely on discretionary expenses. 

“One of the traps that I see is people get accustomed to a particular standard of discretionary spending—like being able to go out, eat out or order whatever they want online—because their fixed expenses are minimal while at home,” says Knox. “But, at some point, they want to move out on their own. It then becomes really difficult to dial back on spending on that point. It’s easier not to get accustomed to it in the first place.”

Remember, your long-term financial goals are still important, and establishing responsible spending habits now will ensure you’re not hit with a sobering reality check later.

Read more from MoneyFlex:

• How long it takes to get your tax refund in Canada—and how to spend it
• 6 phishing scams targeting young Canadians (and how not to fall for them)
• How to save (and invest) your first $100,000
• How to afford a fun life

About Alicia Tyler

The Toronto-based journalist has more than 18 years of experience as an editorial leader in digital and print media, specializing in consumer and service journalism. Her work has appeared in Clean Eating, Flare and more.

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