Now that I’m getting older, I’ve reflected back on what I wish I had known in my 20’s. Especially when it comes to money.  Don’t just read this list – put it to use!

1. Contribute to an RRSP

You are working and finally have some disposable income. Make sure to start contributing to an RRSP right away, even if it is $50/pay or $100/month. That money will come in handy when you want to purchase a home (Home Buyers Plan) plus the compounding interest will serve you well if the money stays invested until you retire. Contributing to an RRSP will also provide a tax break and in most cases a tax refund.

2. Use your tax refund wisely

It’s so easy to view a tax refund as free money, but it really isn’t. It’s your money, so use it to your benefit. Avoid the shopping sprees and pay down debt, grow your rainy-day fund or invest it.

3. Learn to use a credit card correctly

A credit card is a necessary evil. It is difficult to establish your credit without one, but it is important to learn to use it properly. Use it to pay for something you actually have the cash for and then just put the cash on the credit card right away.

4. Pay attention to your credit score

It’s easier than ever to monitor your credit score now with great sites like Credit Karma and BorrowWell. It updates monthly and notifies you if there is any new activity on your credit report. This is a great way to better understand what effects your credit score and how. It’s also a great first line of defense for identity theft and incorrect reporting on your credit. Credit comes in handy when you want to purchase a vehicle, buy a home or just get cable or internet.

5. Live within your means

It’s extremely easy to get caught up in YOLO and FOMO. We’ve all been there.  Sometimes you just have to say no.

6. Everyone needs a rainy-day fund

Start one now or keep adding to it if you already have one.

7. Getting into debt is way easier than getting out

It is way easier to swipe that credit card or borrow against that line of credit, then it is to make extra cash to pay it off.  Add in the interest and only making minimum payments and what took you 2 seconds to do, could take you 20 years to pay off.

8. Save for the things you want to do

This is a great use of a TFSA. You can take the money out when you need it and you don’t lose the contribution room. You can also invest it so that it grows tax free.  Who doesn’t love tax free money?

9. Make a plan for your money

You need a budget. None of this willy nilly spending whatever is in your account and then wondering where is went.  Need help doing this – use an app or ask for help!

10. DIY your taxes

Unless you are self employed – you should be doing your own taxes.  There are so many great and easy-to-use software options that make it a breeze. This way you know exactly what happened with your money last year and ensures you get all the deductions you are entitled to.

P.S. All these tips are still totally applicable if you are in your 30’s 😉

 

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