September 21, 2026

Personal Finances 101

Budgeting basics
- Tools like 50/30/20 rule (Needs/Wants/Savings).
- Apps (Mint, YNAB, etc.).
- Pay yourself first!
Emergency fund
- Why it's important (e.g. 3–6 months of expenses).
Credit scores and reports
- What it is: prediction of how likely you are to repay borrowed money on time
- What affects it: payment history, credit utilization, credit history length, credit checks
- Where to check (Equifax, TransUnion - borrowell for free checks)

Credit cards
- Interest, minimum payments, rewards.
Good vs bad debt
- E.g., mortgage (2-6% interest) vs high-interest (19+%) credit card debt.
Compound debt
- If you owe $5,000 on a credit card at 20% and only make minimum payments, you could pay hundreds or even thousands in interest over time.

Example: $5,000 balance at 20% APR — and assuming about $83/month in interest (approx)

20% of 5000 / 12 months = $83 interest/month

Minimum payment	Interest	Principal paid	Balance after payment
$100	~$83	~$17	~$4,983
$150	~$83	~$67	~$4,933
$200	~$83	~$117	~$4,883
$250	~$83	~$167	~$4,833
$300	~$83	~$217	~$4,783
$400	~$83	~$317	~$4,683
$500	~$83	~$417	~$4,583

These are key tax-advantaged accounts most Canadians should know about:

TFSA - CELI (Tax-Free Savings Account) - ❤️ WE LOVE TFSA ❤️
- Purpose: Save/invest money tax-free
- Withdrawals are tax-free
- The contribution limit for each year is set by the government (2026’s was $7k)
- Contributions aren't tax-deductible
RRSP - REER (Registered Retirement Savings Plan)
- Purpose: Save for retirement.
- Tax deferral:
- - avoid taxes when your income is at your highest
  - pay taxes on withdraw, when your income is expected to be lower
- Contributions are tax-deductible (can reduce your annual total income - more on that in the Taxes section).
- Withdrawals are taxed (except for special programs like HBP, Lifelong Learning, etc).
RESP - REEE (Registered Education Savings Plan)
- For saving for a child's post-secondary education, or even for yourself if you intend to go back to school
- For children, the government contributes (CESG) with 20% of the first $2500 each year (up to $500/y or $7200 per child).
- Tax-deferred growth like the RRSP:
- - Withdraw is taxed income for the student. Young adults have little to no tax since this is usually their only income
FHSA - CELIAPP (First Home Savings Account)
- Newer account to help first-time homebuyers.
- Combines RRSP tax deduction with TFSA-style tax-free withdrawals.

- - If I instead decide to put the remaining into my RRSP:
  - - My actual yearly income comes down to $58,523
    - 14% of the first $58,523 = $8,193.22
    - 20.5% of the remaining $0 = $0

If they’re thinking about buying:

How mortgages work
- Fixed vs variable rates.
- Amortization vs term.
Home Buyer’s Plan (HBP)
- Borrow from RRSP to buy a first home
- You have to pay yourself back, but the terms are very doable (1/15 of the total withdraw per year)
Closing costs & CMHC insurance
- Notary fees, welcome tax, potential prorated property taxes to the seller, etc
- CMHC insurance: fee if your downpayment is under 20%

Inflation
- Increase in average price of goods and services over time
- Causes
- - Consumer demand higher than production capacity
  - Rising costs for businesses, such as expensive fuel, oil shocks, or trade tariffs
Why invest:
- currency loses value over time due to inflation
- - $1000 today has a lower purchase power than it did 10y ago
- by leaving our money uninvested, we’re essentially LOSING it over time

Inflation
- Increase in average price of goods and services over time
- Causes:
- - Consumer demand higher than production capacity
  - Rising costs for businesses, such as expensive fuel, oil shocks, or trade tariffs
Why invest:
- Currency loses value over time due to inflation
- - $1,000 today has lower purchasing power than it did 10 years ago
- By leaving our money uninvested, we're essentially losing purchasing power over time
Most common investment types

📊 Stock

Inflation
- Increase in average price of goods and services over time
- Causes:
- - Consumer demand higher than production capacity
  - Rising costs for businesses, such as expensive fuel, oil shocks, or trade tariffs
Why invest:
- Currency loses value over time due to inflation
- - $1,000 today has lower purchasing power than it did 10 years ago
- By leaving our money uninvested, we're essentially losing purchasing power over time
Most common investment types

📊 Stock

💵 Bond

📦 ETF

🔒 GIC

Risk vs reward
- Importance of diversification
Bank/robo-advisors vs DIY investing
- Paying the bank to invest for you
- Wealthsimple, Questrade, etc
Compound gains
- Time is your best companion - take advantage of it, my dear young bucks
- $1,000 invested at 7% annually = ~$2,000 in 10 years, ~$4,000 in 20
- - year 1: 1000
  - year 2: 1000 + 7% of 1000 = 1070
  - year 3: 1070 + 7% of 1070 = 1,144.90
  - year 4: 1144.90 + 7% of 1144.90 = $1,225.04
- Reinvested dividends + long-term growth = compound returns
My strategy
- Pay yourself first! You don’t spend money you don’t see 😛
- Low income? Doesn’t matter. Every dollar put aside matters!
- Your motivation to keep investing will only increase once you see your money grow (possible in just a few months as we saw!)
- Diversified ETF like XEQT - DO IT YOURSELF!

If one costs 0.25% (diy etf) annually and the other costs 2.0% (bank), the difference is 1.75 percentage points every year.

On $100,000 over 30 years, assuming the same pre-fee return and ignoring taxes:

- - 6.75% net → about $710,000
  - 5.00% net → about $432,000
  - That's roughly $278,000 that you leave on the table!!! SO MUCH MONEY 😭

Tie it all together:

- The Simple Path to Wealth - incredible free and FUN book that got me started on finances - thank you, JL Collins!
- McGill Personal Finance Essentials course - free, with more depth than this workshop