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What to Do With Your Money Now That You're 18

You've turned 18! What happens now?
What to Do With Your Money Now That You're 18

Happy birthday! You’re legal now! Here are some ways you can take advantage of this new found freedom in your life when it comes to your money.

1. Invest

Canadians are allowed to open an investing account of their choice with a brokerage when they turn 18. Investing early is the key to becoming better, faster at the game and learning how to maximize your returns and minimize risk. There are many different accounts to be made at your disposal when you sign up with a brokerage. You often don’t even need an astronomical amount of money to get started.

Here are some options that are often recommended for young investors

  • Exchange-Traded Funds (ETFs)
  • Index Funds
  • Mutual Funds

They are medium-risk options that demand little industry knowledge and usually do not require much attention from the investor.

There are plenty of investment options out there, but their risk and complexity can vary greatly. The following list is roughly ranked from the least risky to the most risk

  • Yourself
  • Money Market Funds
  • Real Estate
  • Corporate Bonds
  • Individual Stocks
  • Penny Stocks
  • Cryptocurrencies
  • Among many others

2. Build up your credit score

We are all born “creditless”, but turning 18 allows you to actually get a credit card and start building up your score, which can be useful for potential jobs, taking out loans for a car purchase, investing in real estate or even buying a place for yourself. Banks often have credit cards specifically catered for young adults or students with lower fees

3. Save

Creating specific financial goals for your future spending will make the big purchases seem a lot less scary (and won't hurt your wallet as much). One of the most basic yet useful things you can do with your money is to leave it alone. That’s right, saving your money now for big goal-oriented purchases can really help you better prepare for when you really need it the most. Apps like Mint can help you save up for something like a car one dollar at a time.

Saving options are like long-term investments

  • Tax-Free Savings Account (TFSA)
  • High Interest Savings Account
  • Guaranteed Investment Certificate (GIC)
  • Registered Retirement Savings Plan (RRSP)

Note that this is not an offer of personal financial advice or legal advice.
When it comes to investing for beginners, always read about your options. Learn the risks and the benefits beforehand and be aware of the potential outcomes.


Ilustration by Prezi

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