How Much Should You Have Saved by Age 25?

Financial advisers often recommend that 25-year-olds aim to save about 20% of their income. For many people in their 20s just beginning their careers, though, that target can feel out of reach. Everyday costs—rent, groceries, transportation—and life events like travel or friends’ weddings frequently take priority over aggressive saving.

Combined with higher inflation in Canada, it’s natural to worry you’re falling behind—especially when social media highlights others’ polished lifestyles. So what is a typical amount of savings for younger Canadians? Below we summarise the most relevant data and offer realistic steps to build financial resilience in your 20s and early 30s.

Average savings for Canadians under 35

Pre-pandemic data from Statistics Canada showed households where the primary earner was 35 or younger had average savings of $4,782 in 2018. In 2019, Statistics Canada reported that Canadians under 35 held, on average, $10,720 in bank savings, $8,395 in a tax-free savings account (TFSA) and $9,905 in a registered retirement savings plan (RRSP). Two-thirds of Canadians were also saving for a major purchase within three years—examples included saving for a home or condo, home improvements, travel or a vehicle.

More recent national statistics are not yet available, but other surveys indicate many younger Canadians are financially stretched. For instance, a September 2023 Leger survey found about half of Gen Z and millennial respondents were living paycheque to paycheque.

How to prioritize financial goals and obligations

People in their 20s often face multiple competing financial pressures: record-high rents, rising food costs, higher provincial car insurance rates and increased travel expenses. If you plan to purchase a home, you may also want to direct extra cash toward a first-home savings account (FHSA).

To keep things manageable, focus on a clear order of priorities. The timeline below offers a practical sequence to address debt, protect your finances and start saving toward goals.

1. Pay off high-interest debt

Make repaying high-interest debt—especially credit card balances—a top priority. Credit card interest can be around 20% and missed payments can cause balances to grow quickly. Compound interest works both ways: it can make debt balloon when interest is charged on accumulated interest, but it also helps savings grow when interest is earned on previous interest.

Student loan debt is common among people in their 20s. As of 2021 the average Canadian graduate owed roughly $28,000 and it often takes many years to fully repay that amount. The federal government stopped adding interest to Canada Student Loans as of April 1, 2023, though interest accrued before that date still applies. Provinces and territories may set interest on their portions of loans; rates typically use prime plus a percentage.

2. Build an emergency fund

After eliminating high-interest debt and staying current on student loan obligations, work on an emergency fund that covers at least three months of basic living expenses. This safety net helps with unexpected job loss, car repairs, or sudden health issues that affect your income.

For emergency savings, accessibility matters. A high-interest savings account (HISA) typically earns significantly more than a standard chequing or savings account while still allowing easy withdrawals. Keeping these funds in a HISA gives you both liquidity and better returns.

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3. Set goals and automate saving for them

With debt under control and an emergency fund in place, start directing money toward specific goals: a pet, a side-business launch, a vacation, or a vehicle. Automated transfers—where a set amount moves to a dedicated savings account on payday—make saving consistent and effortless. Financial advisors call this “paying yourself first.”

Your contributions can be small at first—$20 a week adds up quickly—or larger if your budget allows. Use a HISA to maximize short-term returns, and consider holding that HISA inside a TFSA so interest and gains avoid tax. Over decades, compound interest can significantly increase your savings; even modest, steady contributions grow surprisingly large over time.

Promotional rates can boost short-term savings, but check terms and limits. Combining regular automated contributions with higher-interest accounts is an effective way to reach medium-term goals faster.

4. Choose financial advice carefully

Friends and family may offer well-intentioned advice based on their own financial experiences, but their recommendations won’t necessarily match your circumstances. Economic conditions and personal goals differ across generations and individuals.

Consider consulting a qualified financial planner or advisor when you want personalized guidance. A professional can review your assets and debts, help set priorities and develop a practical financial plan—whether that means accelerating debt repayment, investing for retirement, or creating a savings schedule for a major purchase.

Balancing debt management with enjoying your 20s may require budgeting changes and careful decision-making, but building a repayment plan and pairing it with automated savings in a HISA creates a resilient foundation for long-term financial health.

Further reading on savings:

• How much does the average Canadian have in savings?
• The best way to save for retirement in your 20s
• How to start investing with ETFs in your 20s
• How much money should I have saved by age 40?