If I could go back and sit down with my 18 year old self, this is what I would tell him about money:
1. Start planning for retirement early
Retirement might feel like a lifetime away when you're 18 or in your early 20s. But that distance is actually your biggest advantage.
The earlier you start saving and investing, the more time your money has to grow.
2. Spend less than you earn.
Just because you have money available doesn't mean you need to spend it all. Living below your means gives you more room to save, invest, and build financial security.
3. Create a budget
Understand how much money you earn, how much you need to spend, and how much you have left for everything else. You don't need to monitor every dollar for the rest of your life, but you should have a clear idea of where your money is going.
4. Build a Small Emergency Fund
At 18, you may not have any major expenses or financial responsibilities yet, so you do not need a large emergency fund right away.
Still, it is a good idea to set aside a small amount of money as a safety net.
Even $500 to $1,000 can give you a little breathing room if something unexpected comes up, such as a car repair, an
unexpected bill, or replacing something you need.
As your income, expenses, and responsibilities grow, you can gradually build your emergency fund toward 3 to 6 months of essential expenses.
5. Increase Your Income
At 18, one of your greatest financial assets is your ability to increase your future earning potential. Building valuable skills, whether through a degree, skilled trade, certification, or hands-on experience, can create more opportunities and give you greater control over your financial future.
Focus on building skills that are valuable in the marketplace. Gain experience, choose your career path carefully, and continue developing your abilities as you progress.
As your skills and experience grow, look for opportunities to increase your income. This could mean negotiating your pay, taking on additional responsibilities, changing employers, or eventually building your own business.
6. Take Advantage of Tax-Advantaged
Accounts
Make sure you understand and take advantage of the tax-advantaged accounts available to you in Canada, such as the TFSA, FHSA if you are eligible, and RRSP.
Each account has a different purpose and comes with its own rules and tax benefits.
For example, a TFSA can be useful for flexible long-term saving and investing, while an FHSA is designed specifically to help eligible first-time home buyers save for a home. An RRSP can be valuable for retirement savings and provide tax deductions on your contributions.
7. Understand How Taxes Affect Your Money
You do not need to become a tax professional. However, you should understand the basics of how taxes apply to your income, investments, capital gains, deductions, and registered accounts in Canada.
The more you understand the tax system, the better you can make decisions about where you put your money and how you manage it.
8. Invest in a globally diversified ETF every week and or every single month.
⏺️XEQT.TO
⏺️VT
⏺️VXC.TO
(These are great options)☝🏻
I'm not saying you can't invest in growth stocks, but in my opinion, especially as a beginner, ETFs should make up the bulk of your portfolio. Buy a globally diversified ETF and invest consistently in it over time.
9. Put Your Priorities First
When your paycheck arrives, don't immediately start spending on things you want.
Use this order:
Income comes in → cover your essential bills → save and invest → spend what remains on entertainment and wants.
10. Don't Forget to Enjoy Your Life
Building your finances matters, but you shouldn't spend your entire 20s focused on saving and investing.
Travel when you can. Spend time with the people who matter to you. Try new things, take opportunities, and make memories.
(Not Financial Advice)
