In your 20’s and 30’s, you establish habits that will shape how your future will turn out! This is why it’s important to set goals for yourself and start saving. If you adopt good habits now, you’ll be in a much better place financially in the future!
Here are some first steps to start heading in the right direction.
- Build an emergency fund
One of the first steps to financial security is establishing an emergency fund. This fund acts as a safety net for unexpected medical emergencies, unemployment or sudden breakdowns of cars or appliances.
To build an emergency fund:
- It should eventually equal the amount required to cover three to six months of living expenses.
- The amount saved each paycheque will be determined by your financial position, job security, salary and outstanding debt.
- Emergency funds need to be easily accessible, so a savings account is the best option.
Quick tip: Start saving a small amount from each paycheque, then increase the amount each year.
- Make a savings goal for a downpayment on a house
If homeownership is part of your future plans, start saving for a down payment early. Consider opening a First Home Savings Account (FHSA) and keep in mind that a larger down payment can reduce fees and lead to smaller mortgage payments!
Use our mortgage calculator to determine your eligibility.
- Start saving for retirement
Take advantage of compound interest by starting to save for retirement as soon as you enter the workforce.
A good goal to get you started is to open a Registered Retirement Savings Plan (RRSP) and aim to have one year’s worth of salary saved in your RRSP by the age of 30.
- Pay off existing debt
Prioritize paying off student loans and credit card debt to free up funds for larger purchases. Eliminating debt allows you to redirect money towards your financial goals!
- Save and invest
Consider opening a Tax-Free Savings Account (TFSA) and invest your money instead of keeping it in a low-interest savings account. TFSAs allow you to earn interest tax-free on any money you have inside that account. This is a good place to save for things like a new vehicle or vacation!
Consider setting up a budget to invest or save 10% of your paycheque each month, even automate the payments for consistency!
- Look for sales and avoid impulse shopping
It’s good to treat yourself every now and then, but don’t let impulse buying wear down your savings.
Practice mindful spending by avoiding impulse purchases or wait 24 hours before making significant purchases to evaluate their impact on your finances and happiness.
- Set financial goals
Set short-term, mid-term and long-term goals and estimate how much you will need for each goal. Short-term goals include savings for an emergency fund, mid-term is things like purchasing a car and long-term goals include saving for retirement.
Having a plan set to achieve goals can help reduce financial stress and help to keep you motivated! It sets out a good map where you can decide which goals are priority for you, and when you will reach them.
- Build a good credit score
Our last financial tip for young adults is building credit. A good credit score will help you secure credit cards and loans. The better your credit score – the better the terms may be when you receive a loan.
Learn more about Affinity’s new personal credit cards
One of the best ways to build good credit is to get a credit card and use it for everyday expenses and pay it off in full every month. You can accumulate points or rewards and build credit at the same time!
Learn more about credit scores here
Remember, financial planning is a lifelong process, it’s important to regularly review your financial situation and adjust your plan as needed.
By following these tips, you can take control of your finances and work towards a brighter financial future.
If you’re interested in any of these tips or if you have questions, you can speak with an advisor at
1.866.863.6237.