25 Essential Money Moves Canadians Should Make by Age 25

Building a solid financial foundation in your early 20s can shape your financial future for decades. Below are 25 practical money moves to help you take control of your finances before you turn 25. Each step focuses on sensible habits, smart accounts, and small actions that compound into long-term stability.

1. Open a TFSA

A tax-free savings account (TFSA) is a powerful tool for Canadians. You contribute with after-tax dollars and any investment growth and withdrawals are tax-free. A TFSA works well for short-term goals—like a trip or a car—as well as for longer-term savings. For 2024, the TFSA contribution limit is $7,000 per year. If you plan to keep cash in the TFSA, compare interest rates across institutions, including alternative banks and credit unions, to get the best return.

2. Go beyond savings with an investment account

Consider moving some money from traditional savings into investments for greater growth potential. Options include a brokerage account to buy stocks and exchange-traded funds (ETFs), guaranteed investment certificates (GICs) for guaranteed returns, or mutual funds for professionally managed diversification. Even small, regular investments can grow substantially over time.

3. Save for your first home with an FHSA

The First Home Savings Account (FHSA), introduced in 2023, allows first-time homebuyers to make tax-deductible contributions—up to $8,000 per year and $40,000 in total—with tax-free growth. It’s an effective vehicle to save specifically for a home while enjoying tax advantages.

4. Build your credit score

Start building credit responsibly with a low-limit credit card and pay your balance in full each month. A healthy credit score—typically measured on a 300–900 scale—opens doors to better mortgage and loan rates in the future. Responsible early habits make it easier to qualify for favorable borrowing terms later.

5. Monitor your credit score

Check your credit score at least annually to spot errors or fraud and to track progress. In Canada, a score above about 660 is generally considered good; scores below 600 are fair or poor. Free credit monitoring services can help you keep an eye on your file without extra cost.

6. Choose a rewards credit card that fits your lifestyle

Many cards offer cash back or points for everyday spending. Pick a card whose rewards align with how you spend—cash back for flexibility or travel rewards if you plan to redeem points for trips. Consider fees, reward rates, and categories before applying.

7. Save up for a move

Moving out has upfront costs: first and last months’ rent, movers, furniture, utilities setup, and other essentials. Research average rents in your area and build a moving fund that covers deposits and the initial expenses. Planning ahead reduces financial stress during the transition.

8. Start an emergency fund

An emergency fund protects you from unexpected expenses like job loss, medical bills, or car repairs. Aim to save three to six months’ worth of living expenses, adjusted for how secure your income is and your financial responsibilities. If you still live with family, use the chance to build this fund while your fixed costs are lower.

9. Pay off student loans

If you have student debt, create a repayment plan using SMART goals—specific, measurable, achievable, relevant, time-bound. Financial apps such as Moka or debt-management tools can help you set targets, track progress and stay motivated.

10. Automate your savings

Automate transfers from your chequing to savings or investments to “pay yourself first.” Contributing automatically to an RRSP or employer-matched plan is especially effective because some employers match contributions—an immediate boost to your savings. Align transfers with paydays to keep cash flow predictable.

11. Learn to do your own taxes

Filing your own taxes saves money and helps you understand deductions, credits and record-keeping—especially useful if you freelance or have side income. The Canada Revenue Agency provides free guides and resources to help you get started and claim what you’re entitled to.

12. Open a CRA My Account

Create a CRA My Account to manage your tax details online. It provides access to tax returns, notices of assessment, and benefit information like carbon rebate or child benefits. It’s a secure, convenient tax hub you’ll use year after year.

13. Know your budget top to bottom

Track income and expenses with a spreadsheet or a budgeting app that suits you. The 50/30/20 rule is a simple starting point: 50% for needs, 30% for wants, 20% for savings and debt repayment. Review your budget regularly and adjust as your income and priorities change.

14. Build your professional brand

A strong, consistent professional presence online helps when job hunting or pitching clients. Maintain an updated resume, an online portfolio, and a LinkedIn profile. When opportunities arise, you’ll be ready to present your best self.

15. Comparison shop for major purchases

For big expenses—your first car, insurance, or major appliances—shop around. Comparing quotes and options can save you hundreds or thousands. Get multiple offers and factor in maintenance and insurance costs when choosing a purchase.

16. Build strong references

Keep good relationships with professors, supervisors, colleagues and landlords. Strong references attest to your reliability and work ethic and can give you an edge when applying for jobs, rentals, or professional opportunities.

17. Plan your dream trip

Budgeting for travel is a practical exercise in goal-setting and expense management. Plan carefully, factor in travel insurance and exchange rates, and hunt for deals. A well-planned trip teaches discipline and rewards you for saving.

18. Read a personal finance book

Reading accessible personal finance books gives perspective and practical strategies. Titles commonly recommended include I Will Teach You to Be Rich, The Little Book of Common Sense Investing, The Psychology of Money, and The Millionaire Next Door. Choose books that match your stage in life and learning style.

19. Stay informed about financial news

Spend a few minutes each week reading articles or listening to podcasts about money, markets and consumer issues in Canada. Staying informed helps you spot opportunities and avoid costly mistakes. Consider subscribing to a trusted financial newsletter for curated updates.

20. Practice negotiating to boost earning potential

Negotiating salary, freelance rates or big purchases gets easier with practice. Many people don’t negotiate, so learning to ask confidently can materially increase your earnings over a career. Prepare your case, know market rates and practice conversations beforehand.

21. Try a digital money jar

Virtual “money jars” replicate the envelope system in digital form. Apps let you allocate funds to categories like rent, groceries and entertainment so you can visually track budgets and avoid overspending. When a jar is empty, you pause spending in that category.

22. Audit your subscriptions

Review recurring subscriptions regularly and cancel services you no longer use. Small monthly fees add up—cancelling unnecessary subscriptions is an easy way to free up cash for savings or debt repayment.

23. Consider a side hustle

A side hustle can boost your income and accelerate savings or debt repayment. Choose work that fits your schedule and interests—freelancing, tutoring, pet care or online services are flexible options to explore.

24. Control impulse spending

Impulse purchases can derail financial progress. Differentiate needs from wants and try a waiting period—such as 24 hours—before buying non-essential items. Small delays reduce regret purchases and improve long-term savings.

25. Calibrate your spending while living at home

Living at home is a chance to save, but avoid forming unsustainable spending habits. Keep discretionary spending in check so you can build savings for independence. Practicing restraint now makes the transition to living on your own much smoother.

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