Simple financial tips for my younger self

Having worked in the accounting industry, I will forever associate this time of year with tax season. While unrelated to medicine, that experience was quite the education. An education on taxes and investing and buying real estate. Based on what I’ve learned in the last few years, here are some financial tips I wish I could give to my younger self.

Financial tip #1: learn about TFSAs and start investing

TFSA vs. RRSP

When I started to work in the accounting world, I finally learned the difference between a TFSA (tax-free savings account) and RRSP (registered retirement savings plan). Although I personally prefer TFSAs, there are advantages to both types of accounts. Here’s a simplified overview.

A lot of people like to put money into RRSPs because these contributions are tax-deductible. This means it can reduce the amount of tax you’ll pay when it’s time to file your tax return. Both RRSPs and TFSAs can hold many types of investments like stocks, ETFS, bonds, etc. As such, your money can grow over time if invested correctly. However, when you withdraw money from your RRSP, you have to pay tax on it. When you withdraw money from your TFSA, you don’t. There are some finer details about each type of account, but these are the main takeaways.

When putting money into these accounts, it’s important to know about the contribution room. There’s a limit to how much money you can put into your TFSA and RRSP accounts each year. And there are penalties imposed by CRA for going over. If you’re interested, you can check your contribution limit on your CRA My Account. Once you login, scroll all the way to the bottom of the page and the limit, or contribution room, for each account will be there.

Start investing early

I wish I had known about all of this in high school. Even just the basics about TFSAs, stocks, etc. would have been so helpful. I had my first job in grade 12. Minimum wage was around $10/hour at that time. If I had put even $50 each month into a TFSA, that would have been something. This would have gotten me into the habit of saving so that by now it would be instinctive.  And more importantly, the money would have compounded over all these years.

Financial tip #2: Don’t buy food on campus

Just thinking about how much money I wasted on campus food makes me cringe. I know exactly in which building a good chunk of my money died. I can picture it right now. The worst part is that the food wasn’t very good and it was way over-priced.  There were times I just couldn’t avoid it. But there were other times that I didn’t need to buy food and did it anyway, either because I was with friends or because I didn’t prepare food to bring with me. That I could have avoided, or minimized, with a little bit of planning.

Cooking and meal-prepping

It’s hard to do as a student when you’re crunched for time, but I wish I had gotten into the habit of meal-prepping in undergrad. If I had put in a little bit of effort, I could have meal-prepped on weekends for a few days in advance. That would have helped minimize the need for spontaneous spending on campus. I started doing this when I was working, and it saved me so much money.

Learning to cook isn’t just great for your bank account. It’s also a great life skill and an investment for your long-term health. There will be times where it just won’t be doable. But the more you do it, the more habitual it becomes. And (hopefully) the more money you can save.

What are your financial tips?

So those are 2 financial tips that I’d give to my younger self.

What financial tips do you wish you had learned sooner?

-M

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