How to save money in Canada: A new way that offers higher interest and more flexibility + MORE Dec 17th

Financial experts suggest 25-year-olds save 20% of their annual income. But if you’re in your 20s and just starting your career, saving might not be a high priority. Expenses like rent, groceries and car payments seem more pressing—not to mention having a life and planning for big events like an adventure trip or your friend’s upcoming wedding.

With all these competing costs, coupled with Canada’s elevated rate of inflation, it might seem like you’re falling behind your peers financially—especially if you’re on TikTok or Instagram, where it seems like everyone is living their best life. But what’s a “normal” amount of savings for young adults in Canada? We find out.

Average savings for Canadians under 35

According to Statistics Canada’s pre-pandemic data on savings by age in Canada, households with a major income earner 35 years or younger saved an average of $4,782 in 2018. And its 2019 figures indicate that Canadians under 35 had average savings of $10,720 in the bank, along with $8,395 in a tax-free savings account (TFSA), and $9,905 in a registered retirement savings plan (RRSP)…

So, you’re in your 30s and pretty happy about what you’ve achieved in life so far, whether that’s a promotion at work or owning your first home. But at this stage of life, you might also feel financially pinched. Maybe you’ve got a kid or two and are staring down serious daycare fees—on top of the ever-increasing cost of living, a daunting mortgage rate and student loan payments. Or maybe you’re stuck in a rut at work—but a career change could set back your savings and retirement plan contributions.

All the while, you’ve got a serious case of FOMO every time you check social media—all those friends who are jetting off on lavish vacations, buying new cars and splurging on cottages. How are ordinary Canadians actually doing this? And how can you get ahead and save more?

What’s the average savings for Canadians in their 30s? How much should they have saved?

A lot of Canadians are managing to save, despite the above financial challenges and obligations. According to Statistics Canada’s 2019 figures (the most recent available), the average person under age 35 had saved $9,905 towards retirement (RRSPs only) and held $27,425 in non-pension financial assets…

Over the years, we have spoken in depth with hundreds of people about their finances: people who have small incomes, people who have six-figure and even seven-figure incomes, and everyone in between. At every income level, people fall into one of the following three categories:

People who spend more than they earn (accumulating debt)

People who spend all that they earn (saving nothing—breaking even)

People who save 2%, 5%, 10% or even 20% or more (growing savings)

We’ve seen $50,000 earners who save 20% of their income ($10,000), $100,000 earners who save just 5% ($5,000), and people earning well into six figures annually who save nothing or are adding debt.

Suppose that you currently earn $50,000 per year and spend all of it. You may wonder, “How can I save money?” Good question! Rather than knock yourself out at a second job, you may want to try living below your income—in other words, spending less than you earn. Consider that for every discontented person earning and spending $50,000 per year, someone else is out there making do on $45,000…

With the high cost of living taking a big bite out of Canadians’ disposable income, it can seem challenging to put away any savings. But the right financial tools—such as a high-interest savings account (HISA) and tax-sheltered registered accounts—can help you keep working toward your financial goals and even grow your money, whatever stage of life you’re in.

Average savings by age in Canada 

Canadians aren’t doing too badly when it comes to average savings, socking away funds both inside and outside of registered retirement savings plans (RRSPs). According to Statistics Canada data from 2019 (the most recent information available), we’ve saved this much on average, not including private pensions and non-financial assets like real estate:

Under age 35: $27,425 in non-pension financial assets and $9,905 in RRSPs

Ages 35 to 44: $23,743 in non-pension financial assets and $15,993 in RRSPs

Ages 45 to 54: $39,831 in non-pension financial assets and $41,998 in RRSPs

That was a few years ago…

If you’re saving up for a financial goal or large expense—whether it’s a vacation, future vet bills or just your rainy day fund—chances are you’re setting aside money in a regular chequing account, a high-interest savings account (HISA) or a guaranteed investment certificate (GIC). Maybe you’ve gone even further and invested in a money market fund (MMF) or an exchange-traded fund (ETF) that invests in low-risk government and corporate debt securities. Whatever your strategy, your choices as a Canadian saver have been limited to these options—until now.

Meet the Notice Savings Account (NSA) from EQ Bank. This new savings account lets Canadians access high regular interest rates while maintaining flexible access to their funds. Read on to learn how an NSA can help you reach your short-, medium- and long-term savings goals.

sponsoredEQ Bank Notice Savings Accountgo to site

Monthly fee: $0

Interest rates: 3.00% for 10-day notice, 3.05% for 30-day notice. Read full details on the EQ Bank website…