32 articles General

My journey to building my credit score as a student

Posted on August 5, 2026

I have heard the phrase “build your credit while you’re young” a lot, but no one really explains what that actually means or how many little things can affect it. At first, I didn’t pay much attention to it. I got my first credit card, made payments, and assumed everything was fine. It wasn’t until I checked my credit score and started reading more about personal finance that I realized there was a lot more going on behind the scenes.

At the time, my credit score was around 673. My credit card had been open for about two years, my credit limit was $1,000, I had student loans, and I had unfortunately missed a payment in the past. My balance (which I pay off in full every month except for one time) usually sat around $300, which I never really thought much about.

I started reading articles, browsing banking forums, comparing different people’s experiences, and asking questions whenever something didn’t make sense. One thing I noticed almost immediately was that there wasn’t one magical trick that suddenly gave people excellent credit.

Why your credit score matters

Before I started paying attention to my credit score, I did not think it mattered very much. I assumed it was something people only worried about when they were buying a house or financing a car later in life. The more I learned, the more I realized that your credit score can start affecting your financial decisions much earlier than that.

Your credit score is essentially a snapshot of how well you’ve managed borrowed money in the past. Banks and lenders use it to help determine how risky it might be to lend you money. While it isn’t the only factor they look at, it can influence everything from whether you’re approved for a credit card or line of credit to the interest rate you receive on a loan. In some cases, landlords, utility companies, and even certain employers (with your permission where applicable) may also review your credit history as part of their decision-making process.

One thing I also did not realize at first is that there isn’t just one universal credit score. In Canada, there are two main credit bureaus: Equifax and TransUnion. Since lenders do not always report information to both bureaus at the exact same time, and because each bureau uses its own scoring model, your score can be slightly different depending on where you check it. That’s completely normal, and it doesn’t necessarily mean something is wrong.

Checking your credit score is also much easier than I expected. Many banks now include it for free through their online banking apps. I personally use my TD Bank account to check my score, and sometimes I use ClearScore if I want a more comprehensive report. One thing I found reassuring is that checking your own credit score through these services is considered a soft inquiry, meaning it does not lower your credit score.

How your credit score is calculated

Both Equifax and TransUnion explain what goes into a credit score.

The biggest factor is your payment history. Both credit bureaus explain that consistently making your payments on time is one of the most important things you can do. It shows lenders that you have a history of managing borrowed money responsibly. On the other hand, missed or late payments can remain on your credit report for several years and may lower your credit score.

Another important factor is credit utilization, which is the percentage of your available credit that you’re using. For example, if your credit limit is $1,000 and your balance is $300, your credit utilization is 30%. If your credit limit is $5,000 and you have the same $300 balance, your credit utilization is 6%.

I always paid my bill (well, almost, but more on that later), so in my head I thought, “Well, I’m paying it back anyway; what difference does it make?” But lenders don’t just look at whether you’re making payments. They also look at how much of your available credit you’re using. A higher credit limit isn’t just about having more money available to spend; it also affects your credit utilization. In general, using a lower percentage of your available credit is viewed more favourably than using most of it.

Increasing your credit limit while keeping your balance the same might lower your credit utilization (and thus improve your credit score), but keep in mind that your total available credit also factors into how much more credit a lender is willing to give you.

The credit bureaus also consider the length of your credit history. Accounts that have been open and managed responsibly for a longer period of time generally strengthen your credit profile because they provide lenders with a longer history of how you’ve handled credit. Learning this reminded me that building good credit is something that happens over time, and there really isn’t a shortcut when it comes to the age of your accounts.

Another factor is your credit mix, which refers to the different types of credit you have. This can include credit cards, student loans, lines of credit, car loans, and mortgages. Lenders look at your overall credit profile rather than a single account.

Finally, the credit bureaus also consider your recent credit activity. Applying for several new credit products within a short period of time can temporarily lower your credit score because each application may result in a hard inquiry on your credit report. While one hard inquiry usually has only a small impact, several applications over a short period of time can suggest that you’re relying more heavily on credit, which may increase the level of risk from a lender’s perspective.

My missed payment

This was probably the lesson that stuck with me the most. When people talk about improving their credit score, it’s easy to focus on everything they’re doing right today (paying bills on time, not spending too much). I was doing many of those things too. But I also had to acknowledge something that wasn’t helping my case which was that I had missed a credit card payment in the past.

Looking back, it wasn’t because I couldn’t afford the payment. Life just got busy. As a student, there are weeks where it feels like everything is happening at once. Midterms, assignments, work, family commitments, and trying to have some sort of social life all compete for your attention. A credit card due date can easily become just another notification that gets pushed aside. I used to think being a few days late wasn’t a huge deal, but lenders don’t really see it that way.

Imagine submitting an assignment three days after the deadline. Even if it’s a great paper, it’s still late. Credit works in a similar way. Once I understood that, I stopped relying on memory. Instead, I started creating systems. Calendar reminders, checking my banking app regularly, reviewing my statement every month instead of only when I happened to think about it. It even got to the point where I would pay my bill multiple times a month.

One thing I also considered was setting up automatic payments. I think they’re a great option for people who have a dependable amount of money in their bank account every month. In short, it ensures that you don’t miss a payment. Personally, I still like checking my statement myself because it forces me to review what I’ve spent, but having automatic payments as a backup can definitely provide some peace of mind.

A quick note about a misconception I had: even though I didn’t miss a payment on purpose, I used to think that carrying a balance past the payment due date somehow helped build my credit score. I don’t even remember where I heard that, but for some reason I believed that leaving an overdue balance on my card and paying interest showed lenders I was using my credit responsibly. This simply isn’t true.

Increasing my credit limit (without increasing my spending)

After learning more about credit utilization, I started wondering if increasing my credit limit would help. To explore this topic, I called my bank asking for a credit limit increase. To my surprise, it was approved immediately and my limit increased from $1,000 to $2,500. The interesting part was that nothing actually changed financially. I didn’t suddenly have more money or started spending more. All that changed was the amount of available credit I had. Using the same example as before, a $300 balance on a $1,000 limit is around 30% utilization. That same $300 balance on a $2,500 limit is only 12%. The balance stayed the same, but the credit utilization decreased.

Getting a higher limit doesn’t automatically improve your credit score. It also doesn’t mean you should suddenly start spending more just because the bank says you can. In fact, I think that’s probably where some people get into trouble. Imagine someone who normally spends about $300 a month. Then they receive a higher limit and start spending $1,200 simply because the money is “available.” Nothing has actually improved; the only thing that’s grown is the bill you have to pay off.

For me, getting a higher limit wasn’t about changing my lifestyle. If anything, I wanted my spending to stay exactly the same. I try to use my credit card for purchases I was already planning to make anyway, such as groceries, gas, subscriptions, or other everyday expenses. I don’t want my credit card to encourage me to spend more than I normally would.

Looking back, I’m really glad I made that phone call. It wasn’t nearly as intimidating as I expected, and it reminded me that sometimes it doesn’t hurt to ask.

Building credit requires patience and discipline

One thing I had to learn to accept was that there really isn’t a shortcut to building good credit. I found myself checking my credit score far more often than I probably needed to. Every time I paid my credit card or made what I thought was a smart financial decision, I expected to see an immediate improvement. It almost became a habit to refresh my credit monitoring app and hope that the number had gone up overnight (which it did from 673 to 674, ha). Of course, that isn’t how it works.

Credit scores take time to reflect new information, and lenders report to the credit bureaus on different schedules. I eventually realized that building credit is much more like building a reputation than studying for a test. One good month doesn’t erase previous mistakes, just like one late payment doesn’t define your financial future forever. What matters is creating a consistent pattern over time, and once I accepted that, I stopped stressing over every small change in my score and started focusing on the habits that I knew would benefit me in the long run.

I started looking at my credit report instead of just my credit score

For a while, I was completely focused on my credit score because it was the number everyone seemed to talk about. It was easy to compare scores with what I read online and wonder whether mine was considered good enough.

Eventually, I realized that the score is really just a summary of what is written in your credit report. The report itself tells a much bigger story because it shows your accounts, payment history, balances, credit inquiries, and other information that lenders actually look at. Once I understood that, I started paying attention to my credit report instead of only looking at the number attached to it. It also made me realize how important it is to review your report occasionally to make sure everything is accurate. We are human beings and mistakes happen; however it is much easier to correct them if you notice them early.

Looking at my report also helped me understand why my score was where it was instead of simply wondering why it wasn’t higher.

My student loans are part of the picture too

For the longest time, I only thought about my credit card when I thought about my credit score. It wasn’t until later that I realized my student loans are also part of my overall credit profile. That might seem obvious, but I genuinely hadn’t thought about it before.

I used to think of my student loans as something completely separate because they are helping pay for my education rather than funding everyday spending. However, they are still a credit obligation, and eventually they become another account that reflects how responsibly I manage borrowed money. That realization made me stop looking at my finances as separate pieces and start looking at them as one complete picture.

Building good credit isn’t just about keeping my credit card balance manageable. It is about understanding that every financial commitment attached to my name contributes to the bigger picture.

Being more intentional and informed about credit decisions

I don’t think my credit journey has been remarkable. I didn’t discover some secret strategy that nobody else knows about. It has been about learning from small mistakes, asking questions when I didn’t understand something, and slowly building better habits over time.

The more interested I became in personal finance in general, the more I found myself reading about different credit cards, financing options, and promotional offers. It was honestly tempting to apply for everything that looked interesting because every product seemed to promise better rewards or better benefits. At one point, I even applied to finance a purchase through Affirm and was declined. At first, I was disappointed because I couldn’t understand why. My immediate thought was that maybe I should just apply somewhere else and see if another company approved me instead. After doing more research, I realized that constantly applying for credit simply because you’re curious or because one lender declined you is usually not the best approach.

Every credit application should have a purpose, and I started asking myself whether I actually needed the product or whether I was only applying because I wanted to see if I could get approved.

I’ve become much more intentional with how I use my credit card, and developed routines that help me stay on top of my finances instead of hoping I remember everything.

Building good credit isn’t really about chasing the highest score possible. It is about becoming someone who consistently manages money responsibly. There will always be another article promising a quick way to boost your credit score or another company claiming they have the perfect solution. From my own experience, however, the biggest improvements have come from doing the boring things consistently: paying on time, keeping my spending under control, and being patient enough to let those habits build over time.

You don’t have to understand everything about credit right away. I certainly didn’t and I still have much to learn. Building credit is a long-term process, and the habits you develop while you’re a student can make future financial decisions much easier. My credit journey is definitely not finished, but looking back, I can say that taking the time to understand how credit works has been one of the most valuable financial lessons I’ve learned so far.

The wonderful world of gold and its investment opportunities: part 1

Posted on May 29, 2026August 9, 2026

You have likely seen gold in one form or another. Gold can be jewellery, a luxury accessory, a fine dining flex, or the classic safe haven / hedge asset that investors gravitate towards when markets become a little too volatile. Gold as an asset and as a commodity has long carried a reputation for holding value and being considered the “gold standard”, which is why it continues to show up in conversations about diversification, inflation, and long-term investing. It is also one of those rare things that manages to be both serious and meme-worthy, whether it is associated with wealth, tradition, or a certain unforgettable Austin Powers reference to “Goldmember”.

So, what exactly is gold, and why do people buy it? Is it worth adding to a portfolio and holding onto? All these topics and more will be discussed in this two-part series as gold is broken down as an investment opportunity.

Understanding the basics of gold: a quick jump through time

Before being able to dive into the basic foundations of gold and its modern-day use cases, it is important to have the historical and cultural understanding of gold, and what led to its rise in popularity.

Gold has been traced as far back as ancient Mesopotamia around ~4000 BCE. Ancient civilizations used it for jewellery, religious artifacts, and symbols which were representative of divine power and wealth. Those who held gold were quickly considered powerful and wealthy, often seen as having divine status, as wealth was closely tied to both power and religious clout. Over time, gold began to outshine other metals like silver, bronze, and copper, which were heavily used during the Bronze Age for tools, weapons, and as early coinages. Part of the reason for gold becoming adopted and being highly sought after was simply because of its natural scarcity. Its high malleability also made it easier to shape without breaking or damaging. These traits continued forward with its association and characteristics of wealth and status until ~600 BCE when it replaced the legacy bartering system and became the official coinage for trade. And the rest, as they say, is history — and what we now know as the gold standard today, at least from a benchmark perspective.

What is the “gold standard”?

The “gold standard” was a monetary system where a country’s currency value was directly linked to a specific amount of gold. Essentially, the higher the gold reserve, the stronger the currency was. No major countries are tied or pegged to the gold standard anymore (since the USA essentially ended it in the 1970s). Today, the gold standard is commonly known as a metaphor for a benchmark representing the best-in-class to be used in comparisons.

What are the types of gold to invest in?

There are several ways to invest in gold, but they generally fall into two buckets: physical gold and paper gold. Physical gold includes bullion, bars, coins, and jewellery, while paper gold includes exchange-traded funds (ETFs), mutual funds, futures and forward contracts, and mining stocks. Each asset class has its own unique set of risks and benefits.

Physical gold

Gold bullion	Bullion refers to high-purity gold, typically in the form of bars or investment-grade coins, and its price is generally driven by the current spot price of gold (the live market price at which gold trades) plus any dealer markup, fabrication costs, and handling fees.
Gold bars	A type of bullion, best for investors who want direct exposure to gold content, often with lower premiums than smaller retail products. Price is dictated based on the spot price of a single Oz of gold plus associated retailer fees.
Gold coins	A type of bullion, gold coins are usually minted by governments or recognized refineries, and while their value is still closely tied to gold’s spot price, they often carry a higher premium than bars because of minting, collectability, and retail costs. They are often more liquid than bars, making them easier for re-sale.
Gold jewellery	Gold jewellery is physical gold in the sense that it contains real gold that you can hold, but it is not typically considered investment-grade physical gold because premiums, craftsmanship, and resale discounts can reduce value. It is ideal for collectors or those who want something wearable with some gold content, but not for pure investing.

Paper gold

Gold ETFs and mutual funds	Shares, funds, or trust units that track the price of gold rather than the metal itself. The price is usually tied to the spot market with fund fees and other product costs layered into the NAV (Net Asset Value of the investment). Best for investors who want exposure to the gold price without storing physical metal and want high liquidity assets.
Gold mining companies	Shares of companies involved in exploring, mining, refining, or producing gold. Their value is influenced by the gold price, but also by the company’s performance, production costs, debt, management, and broader market conditions. Best for investors who want indirect exposure to gold with the potential for higher upside, but also higher volatility than physical gold or gold funds.
Gold futures	Futures contracts that give investors exposure to the future price of gold rather than the metal itself. Their value is tied to the spot market and contract price. It can involve leverage, margin requirements, and contract rollover costs. Best for advanced investors who want tactical gold exposure and high liquidity, but can tolerate greater risk as leverage can drastically increase both gains and losses.

Paper vs physical gold as an investment

When considering whether to buy gold, investors should be clear about what they are trying to achieve and how much risk they are comfortable taking on. For example, beginners may want to consider physical gold, as it is traditionally a relatively risk-off allocation (lower risk than paper gold and many other non-gold investments, as its price is impacted by the spot price of gold and in the case of jewellery, rarity). As a result, physical gold can offer direct exposure and diversification for investors.

By contrast, gold mining companies have additional risks such as management performance, property issues, legal risk, and even the possibility of mining nationalization. In that sense, mining stocks are more of a risk-on (higher risk at least compared to physical gold) way to gain exposure to gold, but can come with higher upside potential as their share price is impacted by more than just the spot price of gold. Gold funds, ETFs, and futures offer a variety of risks but have higher liquidity ratios and can be correlated to the spot price of gold or can leverage derivatives to increase upside potential. Of course, with higher upside potential there is also greater downside potential.

So rather than treating all gold investments the same, investors should think of them as different opportunities within the same space that have varying degrees of risk, liquidity, and upside potential.

Should I buy gold?

Whether or not you should buy gold depends on your goals, time horizon, and risk tolerance. Gold can be useful if you are looking for added diversification, a hedge against uncertainty, or exposure to a hard asset. However, gold is not designed to be a high-growth investment.

Historically, its performance is under 10% (annualized since 1916) and has had periods of extended stagnation. Recent years have experienced higher annualized returns due to heightened uncertainty and geopolitical tensions, sending the underlying asset to historic highs, hitting almost $5,600 USD an ounce in January 2026. However, because gold does not generate earnings, dividends, or cash flow, it is often not relied on as the primary growth engine for a portfolio and is generally a sleeve within a broader diversified portfolio.

When considering whether to buy gold or not, investors should consider if a specific type of gold exposure (the type of gold) fits or meets the role in their portfolio or life prior to investing, especially when nearing historic valuations.

Karat gold, and what is its purpose?

Like other hard assets, gold has a valuation of purity that is known as “karat”. Gold purity or “karat” is valued out of 24 and it denotes the ratio of pure gold to base metals and alloys. The higher the karat, the higher the purity, and thus higher the value. At the same time, the lower the karat value, the higher alloy content, and thus generally lower value. For example, 24K or 24 karat gold is around 99-100% pure gold, which implies that the value of the item would be higher relative to the spot price of gold. A lower karat gold such as 18 karat, has around 75% gold, and its value would then be lower in contrast to 24 karat due to having a higher alloy content. What is important to note is that the karat level also impacts the end use. Lower karats, such as 22K, 18K, 14K, or 10K, are ideal for jewellery as they are more durable due to having higher alloy content; but it also means you are getting less gold per gram, so the value is less. If the goal is purely investment-based, then higher karat content is the direction. If the goal is more practical or jewellery based, then lower karat content is the direction.

How to verify the authenticity and purity of physical gold?

Before buying gold, it is important to verify both its authenticity and purity. The easiest way is to check for official stamps, mint markings, karat markings, assay certificates, and serial numbers where applicable. These steps are often easy to conduct, especially when buying gold from established and reliable places that are transparent with their offering. Organizations like major banks, recognized bullion dealers, governments, and retail stores like Walmart and Costco will have all these details available (and often on display). These establishments are also recommended for purchasing physical gold items vs online stores, secondary markets, or private sellers. This is due to their transparency, historical backings / established reputations, and clear return policies. An added benefit is that most established retailers will have secured delivery and proper storage for the precious metals.

Aspect	What to check / do	Why it matters
Primary verification	Official stamps Karat markings / mint markings Serial numbers Assay certificates	Confirms purity and authenticity
Recommended purchase locations	Major banks Recognized bullion dealers Government mints/websites Trusted retailers (e.g. Walmart, Costco)	High transparency, clear policies, secure delivery
Best practices	Buy from reputable sellers Request original packaging & certification Check against recognized mint/refinery standards	Reduces risk of counterfeit or low-quality gold
For higher-value purchases	Use professional testing (jeweller, bullion dealer, or assay expert)	Extra assurance on large investments
Red flags	Deals that seem too good to be true, especially on secondary markets or private sellers	High risk of fraud or substandard product

What are the risks of investing in gold?

Just like any investment, gold comes with its own unique set of risks. While gold can help diversify a portfolio and act as a hedge during periods of uncertainty, it is not entirely risk-free.

For example, the price of gold can fluctuate significantly based on market conditions, investor sentiment, interest rates, inflation expectations, and global economic events, sometimes even market volatility can play a role. If the market price of gold declines, the value of both physical and paper gold investments can decline as well.

As previously discussed, physical gold comes with liquidity and storage considerations. Unlike stocks or ETFs that can typically be bought and sold quickly on an exchange, selling physical gold can sometimes take longer depending on the type of asset and market demand. In certain situations, investors may need to sell through dealers, secondary markets, or private buyers, which can impact pricing and liquidity. Physical gold may also require secure storage and insurance, both of which can increase the overall cost of holding the investment. The value of physical gold can also vary depending on the form of the asset. For example, bullion products are generally tied closely to the spot price of gold, while collectibles may derive additional value from rarity, condition, historical significance, or brand recognition.

Paper gold investments, such as ETFs, mutual funds, and futures contracts, introduce a different set of risks. In addition to market risk, investors may also face product risk depending on how the investment is structured. For example, some gold ETFs and mutual funds may not hold physical gold directly and instead gain exposure through mining equities, futures contracts, derivatives, or other financial instruments. This can cause the investment’s performance to differ from the actual movement of physical gold. Additionally, because it is a paper gold investment, liquidity constraints can play a role too, which is why some ETFs or mutual funds may be delisted due to a lack of money-in-flow (not enough investment in the fund, and low liquidity so it is terminated).

More complex gold products introduce counterparty risk. This risk is generally associated with investments that rely on futures, swaps, derivatives, or contractual agreements between financial institutions rather than direct ownership of physical gold. Counterparty risk is where the other party in the transaction defaults on the contract before settlement, causing the value to decline or when an investor is trying to convert the paper asset into the underlying physical assets, but the physical asset is not delivered. In some cases, this could impact the value, settlement, or redemption of the investment. Complex products can be beneficial for experienced investors or those working directly with an investment professional.

So, is it better to buy gold coins, bars, or jewellery as an investment?

This comes down to personal preference but also an investor’s goals and intended use. Gold bars are often preferred by investors looking for lower premiums and direct exposure to the spot price of gold. Gold coins can offer better liquidity, recognizability, and collectability, but may come with slightly higher premiums. Jewellery, watches, and collectible pieces can sometimes generate strong returns due to brand value, rarity, and demand, but they can also be significantly harder to value and resell. For investors focused purely on gold exposure, bullion bars and investment-grade coins are generally an easier option.

Summary: how to invest in gold (basics about physical vs paper)

This is where many beginners get tripped up, because “owning gold” can mean very different things. Physical gold means you actually hold the metal in the form of bars or coins. Paper gold usually means gold ETFs, gold funds, mining stocks, or other financial instruments tied to the metal’s price.

Physical gold gives you direct ownership, but it also means dealing with storage, insurance, and security. It can also be less convenient to sell quickly if you need cash fast. Paper gold is easier to trade, simpler to buy in a brokerage account, and often cheaper to store, but it can introduce different risks because you do not personally hold the metal.

In plain English:

Physical gold is better for people who want tangible ownership.
Paper gold is better for people who want convenience and liquidity.

Stay tuned

If you enjoyed this introductory edition to the wonderful world of gold and its investment opportunities, stay tuned for part two of the series as we explore the technicals related to gold: the factors that impact the price of gold, tax implications, market drivers, and more!

Disclaimers

This article is independently written and not sponsored by any financial institution. The views expressed are solely those of the author(s) based on their research and analysis. The content is for informational purposes only and should not be considered financial advice. Always consult a qualified financial professional before making investment decisions. Reading this article does not create a professional relationship with the author(s) or affiliated organizations. It is not a substitute for personalized financial guidance.

Investing involves risks, including potential loss of principal. Readers are solely responsible for their investment decisions. Past performance does not guarantee future results. Historical or projected returns may not reflect actual future performance. The use of information in this article is at the reader’s own risk. The author and publisher are not responsible for any errors, omissions, or resulting losses/damages.

Understanding and managing debt in your 20s: student loans, credit cards, lines of credit, and more

Posted on March 24, 2026March 24, 2026

When you are young, it is easy to think of debt as free money. Student loans, credit cards, car loans, and lines of credit seem to be everywhere and very easy to access. As a fourth-year university student who is about to graduate, I have started thinking about debt in a more intentional way, because I know I will soon be responsible for managing it on my own. Instead of just accepting it as part of life, I am trying to understand what I currently owe, how each type of debt works, and what my plan will be after graduation. This means being more aware of my student loans, staying on top of my credit card, and thinking ahead about how I want to approach repayment once I have a full-time income. I’m not trying to have everything figured out right now, but I want my debt to stay manageable and not turn into something that holds me back later.

Student loans

For many people my age, student loans are the first type of debt we encounter. Education is expensive and most students rely on government loans to cover tuition, books, and living expenses. One thing we are fortunate about in Canada is that government student loans do not accrue interest. In 2023, the Government of Canada eliminated all federal student loan interest, and most provinces have done the same, such as BC in 2019. This gives students the space to focus on their studies without the pressures of growing debt. Repayment usually starts after graduation, and there are programs to help reduce payments if your income is low.

That said, student loans are still debt. It is easy to borrow more than you actually need when the money is available, especially when thinking about short-term expenses. I have learned that even with student loans, it is important to track how much you owe and to consider what repayment might look like down the line. If you’re only focused on using the money now, you can lose sight of preparing for your future.

I have heard a lot of advice on how to manage student debt, but two approaches stand out to me the most.

The first is to use your student loans strictly for school-related expenses, mainly tuition and essential costs. It can be tempting to use leftover funds for things that are not necessary, especially when the money is already sitting in your account. But any extra amount you do not need can be returned or paid back early. Even sending back a few hundred dollars, like $200 or $300, can make a difference over time. It reduces your total balance and makes repayment more manageable later. Small decisions like this may not feel significant in the moment, but they add up and reflect a more intentional approach to borrowing.

The second approach is something I personally plan to follow after graduating. It is the idea of continuing to live like a student for one to two years after you start working full-time. Instead of immediately increasing the cost of your lifestyle, you manage your expenses carefully and focus on aggressively paying down your student loans. This can make a huge difference. As your income increases after graduation, your expenses do not have to increase accordingly! It is good to have discipline about seeing money in your bank account and not feeling like you have to spend it. For example, seeing $2,000 in your bank account does not mean that it’s time to upgrade your car or move into a more expensive apartment.

Even though student loans in Canada currently do not accrue interest, that is not something to rely on long term. Policies can change, especially with the current economic environment. Paying down your loans early not only reduces financial stress but also protects you from potential changes in the future. More importantly, it builds discipline and frees up your income sooner so you can focus on other financial goals.

Credit cards

Credit cards are probably the most common and also one of the easiest types of debt to misuse, especially for young people. They are convenient, easy to get, and often come with rewards that make them even more tempting. At the same time, they can be one of the most useful financial tools if used properly.

One of the biggest benefits of using a credit card responsibly is building your credit score. Your credit score plays a major role in your financial life. It can affect your ability to rent an apartment, get approved for loans, or even secure a good interest rate on a mortgage. Using a credit card and paying it off consistently shows lenders that you are reliable. There are also added benefits like cash back and rewards points. Many cards offer a small percentage back on your spending or points that can be used for travel or other rewards. While these should never be the main reason to spend money, they are a nice bonus if you are already making purchases you would have made anyway.

The main challenge with credit cards is the interest rates. Many cards have interest rates around 20 percent or higher. If you carry a balance, even small purchases can quickly grow into much larger amounts over time. This is where credit cards can shift from being a helpful tool to something that works against you.

There is also a psychological side to be careful of. People tend to spend more when using credit cards compared to using debit or cash, because they do not feel the impact right away.

As a first time credit card user, I kept hearing the same advice over and over again. Always make your payments on time and always pay your balance in full. For the most part, I followed that advice and stayed consistent. But there was one time where I missed a payment by accident, just once, and it was enough to show me how quickly things can add up.

I ended up getting charged around $29 just for being late on that one payment. It might not seem like a huge amount, but it made the consequence feel very real. It also made me more aware of how important it is to stay organized, whether that means setting reminders or turning on automatic payments.

Other types of debt: car loans, lines of credit, and mortgages

Car loans are common because vehicles are a big ticket expense and can be necessary to get to work or school. My perspective, though, is that cars steadily lose value over time. Borrowing a lot of money for something that decreases in value requires careful consideration before taking on a loan.

A line of credit allows you to borrow money up to a set limit, and you are only charged interest on the amount used. They can be useful for emergencies, but they can become a trap if used for everyday spending. It is easy to fall into a cycle of impulse spending and borrowing without realizing it. One of my favourite tactics is the 24-hour rule – if you feel a sudden need to make a purchase, wait 24 hours and see if you still feel the same need.

Mortgages are another major type of debt, and possibly the largest amount of debt you’ll have. A mortgage usually comes later in life when you decide to buy a home. It is often considered “good” debt because a house is an asset that usually grows in value over the long term. At the same time, mortgages are significant long-term commitments, often lasting decades. They require stable income and careful planning. Even though most people in their early twenties are not thinking about mortgages yet, understanding how they work is part of understanding the bigger picture of personal finance.

Why understanding debt early matters

Debt itself is not automatically good or bad. The real issue is whether it is understood and managed intentionally. Some debt can help you invest in your education or build a future, while other debt can quietly grow and create stress if ignored. Learning about debt early helps you avoid mistakes that are difficult to fix later. Similar to investing, the habits you build now can end up being more important than the raw dollar amounts. Being aware of interest rates, thinking carefully before borrowing, and understanding repayment plans are all essential parts to building a strong financial foundation.

Building a strong financial foundation in your 20s

Posted on March 5, 2026March 24, 2026

Financial education is something that is often overlooked in school. Most young people leave high school or even college with only the basics of budgeting or credit, and very few of us are taught how to plan for the future, save effectively, or invest our money with intention. As a result, many young individuals feel unprepared when it comes to managing money. It can feel overwhelming, confusing, and even discouraging, especially when you factor in the high cost of living, tuition, student loans, and the pressure to get ahead financially at a young age.

This is why building a financial foundation early matters so much. At this stage of life, personal finance is less about making large amounts of money quickly and more about developing habits, understanding how money works, and building confidence in your decisions. The earlier you start, the more time you have to learn, make mistakes when the stakes are low, and let your money work for you. Even small actions now can create long-term benefits, not just financially, but mentally as well.

My perspective as a student learning along the way

I am a 20-year-old, fourth-year college student, and like many people my age, I am learning as I go. I am balancing tuition, part-time work, and everyday expenses while trying to make thoughtful financial choices. I do not have a high income, and I am not investing thousands of dollars, but what I have learned is that starting early changes the way you think about money. It builds discipline, patience, and a sense of control over your future.

There is also an important mental side to this. Without a solid foundation, it is possible to get lucky in the short term and still end up worse off later. Making money without understanding risk, planning, or long-term goals can lead to poor decisions and bigger losses down the line. Building a foundation shifts the focus away from luck and toward sustainability.

It is also not easy to stay motivated when building good habits only seems to earn you a few dollars in the short term. This is where delayed gratification comes in. You are choosing future stability over immediate rewards, which can feel difficult when you are young and want to enjoy your life. The goal is not to deprive yourself. It is to strike a balance where you can still live your life while putting simple systems in place that support your future self.

Understanding the basics: saving, investing, and setting goals

The first step to building a financial foundation is understanding the basics and how different financial tools serve different goals. Saving and investing are often grouped together, but they play very different roles. Saving usually means putting money aside in a safe and accessible place. This money is meant for emergencies, short-term goals, or expenses you expect in the near future. Investing, on the other hand, is about growing money over time by accepting some level of risk in exchange for potential returns.

When thinking about investing, it helps to focus on three key factors: time, risk, and return. Your time horizon refers to how long you plan to leave your money untouched. Generally, the longer your time horizon, the more risk you can afford to take, because you have time to recover from short-term market changes. Higher risk options often come with higher potential returns, while lower risk options offer more stability but slower growth.

Investing does not always mean stocks. For more conservative investors or specific goals, options like Guaranteed Investment Certificates (GICs) can play an important role. GICs offer predictable returns and lower risk, making them useful for people who value security or are saving toward a specific timeline. The key is matching the tool to the goal rather than simply chasing returns.

Why time and compound growth matter

Time is one of the most powerful tools young investors have. Thanks to compound growth, the money you earn can start earning money itself over time. This effect becomes more powerful the longer your money stays invested.

For example, investing $50 a week adds up to about $2,600 a year. Over ten years, that is $26,000 in contributions. If those contributions earn an average annual return of around 6%, the total value after 10 years would be over $35,000 (according to this compound interest calculator). The advantage comes from consistency and time, even if you don’t have large one-time contributions.

This is why starting early matters more than starting big. Someone who begins investing small amounts in their twenties can end up ahead of someone who waits until later, even if the second person contributes more money. For example, a $50 per week contribution at a 6% annual return over 30 years beats a $100 per week contribution at the same 6% annual return over 20 years, even though the latter scenario contributed a third more!

Time allows growth to compound and gives you room to learn without pressure.

Why the TFSA is more than just a savings account

One of the most important tools for young people is the Tax-Free Savings Account, or TFSA. Despite its name, a TFSA can be much more than a savings account. It is a registered account that provides tax advantages. Inside a TFSA, you can hold different types of investments, including a savings account, ETFs, stocks, GICs, and more.

This distinction matters because many people open a savings account within a TFSA and assume that’s all it can do, and I was one of them! In reality their money may just be sitting in cash earning minimal interest (especially if it’s in a big bank). That is not necessarily a bad factor, especially for short-term goals, but it is important to understand that the TFSA itself is just the container. What you put inside it determines how your money grows.

A major benefit of a TFSA is that any growth inside the account is tax free. You do not pay tax on interest, dividends, or capital gains earned inside the account. You also do not have to report buying and selling investments within your TFSA on your tax return. For someone who is still learning, this makes the process much less intimidating.

TFSA basics every person should know

TFSA contribution room starts accumulating when you turn 18, regardless of your income (or whether you even have income). Each year, the government sets a contribution limit, and unused room carries forward. This means many young people already have several years’ worth of contribution room (which amounts to tens of thousands of dollars) available by the time they open their first TFSA.

Withdrawals from a TFSA are flexible. You can take money out at any time, and whatever amount you withdraw gets added back to your contribution room the following year. However, it is important to be careful. If you withdraw money and then re-contribute it in the same year without having enough available room, you can accidentally over-contribute and face penalties. Tracking your contribution room is essential.

TFSA rules are not complicated, but small mistakes can be costly, which is why understanding the basics early matters. The official CRA website’s TFSA documentation is comprehensive. Make the learning a bit more fun with this TFSA quiz!

What I did when I opened my first TFSA

I opened my first TFSA when I turned 18. I did not have a lot of money, but I had saved $1,000 and decided to use it as a learning opportunity. Instead of letting it sit in cash, I used that money to buy an ETF.

That decision was not about chasing high returns. It was about starting. It helped me understand how investing actually works, how markets move, and how it feels to see your money fluctuate. That experience alone made investing feel less intimidating.

Buying an ETF allowed me to invest in a diversified group of companies rather than trying to pick individual stocks. It felt like a balanced way to learn without taking unnecessary risks. More importantly, it built confidence. Starting early allowed me to make mistakes when the stakes were low and learn from them. I actually divided the $1,000 into 10 chunks of $100 and bought a few shares of the ETF every month — doing what is called “dollar cost averaging” — in order to experience what it felt like as the share price of the ETF went up or down between each purchase.

Emergency funds and “paying yourself first”

While investing is important, financial stability comes first. This is where emergency funds and the habit of paying yourself first matter. Paying yourself first means setting aside money for savings as soon as you get paid, before spending on anything else.

Even saving $25 or $50 a week or 10 to 15 percent of your paycheck can steadily build an emergency fund. This creates a safety net that protects you from relying on credit cards or loans when unexpected expenses come up.

Students are also fortunate that student loans do not accrue interest while you are in school. This creates an opportunity to focus on building habits like saving and investing without the immediate pressure of growing debt. Taking advantage of this time can make a meaningful difference later.

Managing debt and credit early

Debt and credit are also a major part of building a strong financial foundation, but they deserve more than a surface-level explanation. Credit cards, student loans, interest rates, credit scores, repayment strategies, and even understanding how compounding works against you when it comes to high-interest debt all play a significant role in long-term stability. These topics are complex and can either support your financial growth or quietly set you back if they are misunderstood. Rather than briefly touching on them here, it makes more sense to explore them properly in a follow-up article where I can break down how to use credit intentionally, avoid common mistakes, and approach debt in a way that protects your future instead of limiting it.

Final thoughts

One of the most important lessons I have learned is that habits matter more than income at this stage. Tracking spending, automating savings, and separating money into different accounts all help create structure.

Learning your way through personal finance also helps reinforce what you know. Testing your understanding, even through something simple like a TFSA quiz, can highlight gaps and reinforce key rules before mistakes happen.

Being young and not having much money does not mean you cannot start building a strong financial foundation. Starting early is about mindset, habits, and understanding how the system works.

I am still learning, but starting now has given me confidence, structure, and a sense of direction. Small steps taken today can compound into meaningful progress over time. Even something as simple as opening a TFSA, investing $50 a week, or paying yourself first can shape your financial future in ways you may not see right away.

The key is not perfection. It is consistency. Building a foundation now gives you options, flexibility, and freedom later, and that is something worth starting early for.

Inflation, the silent investment killer: ways to keep more of your cash

Posted on September 8, 2025May 28, 2026

Over the last few years, a pesky term known as inflation has dominated media headlines and dinner table conversations. The culprit behind the rising costs of goods and weakening purchasing power, inflation continues to impact everyday folks. In fact, for 2025, the average Canadian household is on pace to spend $1,000 more per year just to buy the same basket of goods as two years ago. This increase is almost a 27% rise in 5 years for groceries alone or an annualized rise of 5.4%! While the Bank of Canada has worked to bring inflation down to a 2% target, the impact is still felt daily by savers, investors, and consumers. This pinch is altering everyday lives and is pushing people to new investment vehicles, income sources, and strategic thinking just to make ends meet.

Because of this, a critical question arises: “How does someone protect more of their money from inflation to get more cents for their dollar?”

High Interest Savings Accounts (HISAs) and Guaranteed Investment Certificates (GICs) offer different trade-offs between safety, accessibility (liquidity), and growth. But which option helps you stay afloat in today’s environment? Are there other safe alternatives? To determine which investment option is beneficial for an investor’s unique financial situation, they must first understand the basics of inflation and how it impacts returns and purchasing power.

Inflation: the basics

Inflation is the rate at which the price of goods and services rises over time. The result is the reduction or weakening in purchasing power for a consumer, as their money becomes less valuable. In other words, as inflation increases, your money buys fewer goods and services than it did before. Typically, inflation is measured by government agencies using the Consumer Price Index (CPI) or the Producer Price Index (PPI). Having limited to no inflation is often the target for most governments and central banks, but inflation can spike or change for various reasons, including:

Demand-pull inflation: When the demand for goods and services exceeds supply, causing prices to rise (and in most cases never to decline back to their previous levels). This is sometimes referred to as excess spending, where the higher demand causes higher prices due to limited supply.
Cost-push inflation: When the cost of production increases (for example, due to higher wages or increased costs of raw materials), leading to higher prices for consumers.
Built-in inflation: Often referred to as a “wage-price spiral”, this occurs when workers demand higher wages to keep up with rising costs, which causes businesses to raise prices to cover the higher operating costs.
Monetary inflation: When a government or central bank prints more money thereby increasing the supply, which causes a decrease in the currency’s purchasing power, often resulting in price increases. This is generally referred to as currency devaluation.

What is important to note is that inflation is generally seen as a natural part of the economic cycle, where it ebbs and flows (has high and low periods), but when it’s too high or too low, it can be problematic. That is why central banks, like the Federal Reserve in the U.S., or the Bank of Canada (BOC) try to manage it through monetary policies, such as interest rate adjustments and overnight lending rate changes, all with the goal of having a 2% inflation target.

Types of inflation

Like most things, there are various types of inflation. High inflation reduces the value of money, making it harder for consumers to afford basic goods. On the opposite side, deflation, or negative inflation, can lead to economic stagnation and higher unemployment. And then there is the beast with two backs: stagflation. Stagflation is a rare, but still occurring economic condition in which inflation is high, but there is negative economic growth and generally high unemployment.

Feature	High inflation	Deflation	Stagflation
Inflation	High	Negative	High
Effect on money value	Reduces the value of money	Increases the value of money	Reduces the value of money
Effect on consumer costs	Harder for consumers to afford basic goods	Consumers can buy more for less	Harder for consumers to afford basic goods
Economic growth	Growing, but often slowly	Stagnating or declining	Slow or negative growth (stagnation)
Unemployment	Typically, low unemployment	Higher unemployment	High unemployment
Example	2008 global financial crisis	Great Depression (1930s)	1970s oil crisis

Inflation: The baseline you want to beat

In mid-2025, Canada’s headline inflation sat at 1.9%, slightly below the Bank of Canada’s target. That means for every $100 today, it will buy $98 worth of goods and services in a year. In other words, the everyday consumer is losing money by not investing it. As a result of the deprecation in purchasing power, any investment return should aim to beat inflation just to keep personal finances unchanged.

Luckily in the modern investment landscape, there are plenty of vehicles that can be leveraged, such as a High Interest Savings Accounts (HISA), Guaranteed Investment Certificates (GICs), and more!

High Interest Savings Accounts (HISAs)

HISAs are an extremely attractive investment vehicle for an investor to try and outperform inflation. This is because they are the most liquid investment option for an investor, and they come with little to no associated fees. As a result, investors can deposit money into a HISA, earn interest immediately, and withdraw the funds with ease. The drawback is that the interest rates are generally lower, ranging from 0.5% (or less) — typically offered by the Big Six Banks — up to around 3.0%, which are usually available through challenger banks and digital institutions. Currently, you can also get almost 5.0% through various short-term promotions. HISA rates are typically correlated with the Bank of Canada’s policy interest rates and the prime lending rate, but are not always adjusted at a direct proportion to the policy rate change. In addition to their liquidity and popularity, the average HISA (at least outside of one of the Big Banks) marginally outperforms inflation, providing little to no real growth, especially after taxes on the income earned. This is why most Canadians should consider rate shopping when it comes to their HISA, to ensure that their money is always working for them and compounding at the highest rate available.

For a competitive overview and for the highest rates and newest promotions in Canada that go beyond the Big Six Banks, investors can find more details and rates on the high interest savings comparison chart.

Guaranteed Investment Certificates (GICs)

GICs require you to lock in your money for a set term that is often linked to the overnight lending rate set by the Bank of Canada. In return for the reduced liquidity, you get a higher, guaranteed interest rate compared to a HISA. GICs work best for investors who want certainty, do not need immediate access to their funds, and prefer to see a more linear gain. Current rates can be found in more detail on the GIC rates comparison chart, but on average are between 3.40%-4.00% depending on the type, term, and payout instructions.

Compared to inflation, GIC returns generate modest growth, even after tax on the income earned. For example, a $1,000 one-year GIC at 3.6% would earn $36 before tax. Net of inflation, that is an extra $17 in purchasing power. While it does not sound like much, over time this growth and increase in purchasing power can add up.

Head-to-head comparison: Inflation vs GICs vs HISAs

To better understand the growth and impact of inflation vs a GIC vs a HISA, we can track their returns. The following figure assumes that inflation has remained steady at a 2% target, a 1-year GIC with a simple annual interest is re-invested at 3.6% (based on recent historical averages) and a HISA from a challenger digital institution at 2.5%. The comparison is gross of taxes over a ten-year period and illustrates how the returns from a HISA are much smaller, despite the reality that in most years, a HISA results in marginal growth in purchasing power.

Nominal ending balances:

Inflation (2.0%): $1,218.99
HISA (2.5%): $1,280.08
GIC (3.6%): $1,424.29

Inflation-adjusted (new purchasing power):

Inflation baseline: $1,000 (by definition)
HISA (2.5%) real value: $1,050.12
GIC (3.6%) real value: $1,168.42

An equity alternative: index funds

For investors who have a longer-term outlook and can navigate higher volatility, there is the opportunity to invest in equities and alternative fixed income products through index funds or mutual funds. The S&P 500, for example, is an index of the 500 largest public companies in the US. Having historically returned ~10% per year (pending the fund), or about 6–7% after inflation, investors can see their purchasing power increase quicker. Over the past decade, returns have been even stronger, averaging over 9% after inflation. But as we know, past performance is not indicative of future returns.

Of course, the stock market fluctuates, so investors need to be aware of the risks. Some years can bring double-digit gains, while others bring losses. Unlike HISAs or GICs, there are no guarantees or capital preservation when it comes to traditional equity, index, and mutual fund investments. But over longer periods of time, their returns have consistently outperformed both inflation and fixed-income products, making them an appetizing growth tool.

The bottom line: balancing financial objectives to stay ahead

Inflation will continue to exist and be a part of our everyday lives. Being able to have an increase in purchasing power is ultimately a goal that most investors should have in the back of their mind so that they can continue to purchase goods and services, despite an increase in prices. As a result, the right investment choice depends on an investor’s goals, needs, and risk tolerance. In the modern investment world, it is not simply a choice between HISAs, GICs, or equities, but how to balance them in a way that keeps an investor’s money safe and ahead of inflation.