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You might want to look into taking the DancerWise portion of DancerWealth. It will explain a lot of options beyond savings accounts. http://www.stripandgrowrich.com/wise.php
If you are going to do just a savings account I'd recommend putting in 25-50% of what you earn. I know the number is high but it will force you to keep your living expenses down and you'll build up a nest egg pretty fast. Plus, remember that you'll have to pay taxes off a % of your earnings as well.
being a Canadian with a comparatively high income brings some new issues into play ... mostly as a result of Canada's higher individual income tax rates. Whereas in the US only the 'rich' need to worry about alternatives to paying high taxes on 'regular' savings / investment income, in Canada middle class people have to worry about avoiding the higher taxes on their savings / investment income as well.
Fortunately, Canadian branches of well known banks have come up with certain 'financial products' that take advantage of Canadian tax law loopholes to provide respectable 'after-tax' returns on savings. One of these is a Tax Free Guaranteed Investment Contract.
If you can manage it, I would recommend buying a new small denomination ( like say $1000 ) one year Tax Free GIC on a monthly basis - to serve as your basic 'emergency cash' stash. The idea is that once you have purchased 12 months worth of these one year GIC's, you will then have a maturing GIC 'rolling over' in every future month forever ! In the future, if you should find yourself in need of 'emergency cash', you can simply cash in the maturing GIC that month instead of rolling it over. And in the worst case you can pay an early withdrawl penalty to access other GIC's that haven't matured yet.
But in the future, during months when you don't need 'emergency cash', you can take that month's maturing GIC principal ( like say $1013 - your original $1000 + $13 in interest earnings) ... put another $987 with it ... and buy a new $2000 one year Tax Free GIC to replace the maturing $1000 GIC. Keep repeating this every month. Obviously if you can afford to 'save' more than $1000 per month it will take less time to build up the principal amount of your GIC's. You can continue repeating this 'rollover' plus addition of new savings over and over again, with the principal amount of your new GIC's increasing with each passing year.
I would also add that you may need to 'shop around' a bit in order to find a Canadian bank that offers GIC's in minimum amounts of $1000 or less. Some banks offering the best interest rates also enforce a $5,000 or $10,000 minimum amount ... which is not very helpful when you are first starting out. In the worst case, all Canadian banks offer Certificates of Deposit that essentially work the same as GIC's ( except that the interest earned on CD's is fully taxable ) with minimums as low as $500.
Once you have built up your monthly GIC / CD principal amount to something sufficient to cover your typical monthly living expenses ( perhaps $4000 - $5000 individual monthly GIC's with 12 month maturities for a total of $48,000 - $60,000) , you can then think about just letting your GIC's / CD's 'roll over' by themselves. With your GIC's / CD's providing cash coverage for any 'emergency' situation that may arise, you are then free to start investing your future savings into other types of higher earning investments that are of longer duration ( but also much less liquid), that provide a higher potential rate of return ( but also a higher risk of loss), etc.
But IMHO you don't want to place yourself in the position of not being able to 'lay hands' on your investment money without taking major losses if an 'emergency' should arise unless you first establish an easily accessible 'emergency fund'. By first building up an 'emergency fund' of GIC's / CD's to cover any 'emergency' as your first order of 'business', you will avoid the unpleasant possibility of you being forced to sell off stock shares at a time when the share price is low, of being forced to sell off an immature long term bond at a major loss etc., in order to raise instant cash to cover an 'emergency' (which BTW would also create a major additional tax burden as a result of the stock or bond sale ).
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Congratulations on realizing the importance of saving and investing at your age. That's commendable.
I'd ask you first what your saving/investing goal is...what do you want to save your money for?
Thanks, I want to save the money for my school, I rather not take out a loan and pay the money upfront each year.. Then if I am still working as a dancer It'd be nice to have saved money to put down towards a house. Im fine w/o a car or extra stuff. Having no debt and something you own is nice.
Melonie
Thank you for the information, I opened a Tax free savings account with my bank, that has low rate rates than the others. I put a few bucks in, and built it up monthly. Since Im not high rolling hah the banks max. is 5,000 per year, which is fine by me to start off.
^^^ you've started off in the 'right direction'. The only caveat with a savings account versus maturity based instruments like CD's or GIC's is that it is all to easy to skip depositing additional funds in the savings account during a particular month. However, if you can maintain financial discipline re making regular monthly additions to your tax free savings account without the help of the maturity based incentive, more power to you.
have you put together a budget? Something that outlines your income, expenses, etc?
That's the government max for TFSA right now, $5000 a year.
http://www.tfsa.gc.ca/
^^^ well, based on what I posted earlier, once the $5000 limit is built up in a tax free Canadian savings account, that money can in turn be used to purchase a Canadian GIC.
Oh yea, without a doubt, you gave a lot of solid advice. Just clarifying that it's not the bank's limit, but the governments :)
Once I pay of my student loan I'll likely put your ideas into place. Right now my loan is 4.5% interest rate, I think. I only have $6000 left to pay off.
My best advice--avoid loans including credit card roll-over balances. The only thing loans are for are for investments that will payout more than the loan interest. That's for your future endeavors. You're on the right track; don't get diverted.