Consider different options for reaching your goals
There may be more than one way to reach your goals. If your goal is to save $10,000 in the next 2 years for a car, you’ll need to save about $420 each month. You could save that money in a savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at any time.+ read full definition. Or you could save it in your RRSP, reducing the income taxIncome tax A charge you pay based on your total income from all sources. The Canadian government and your province set the rate.+ read full definition you owe. Then you could set aside your taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition savings for your car.
8 questions to ask yourself
- How much do you have to save each month to reach your goals?
- How should you investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition your savings to help your money grow?
- If your goal is to pay off debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition by a certain date, how much do you need to pay back each month?
- Will you need to change your spending habits to save money or pay off debt?
- Would you be able to pay your bills if you lost your job or had an accident and couldn’t work?
- How can you lower your taxes?
- How much income will you need when you retire?
- How can you reduce taxes on your estateEstate The total sum of money and property you leave behind when you die.+ read full definition?
3 tools to help you explore your options
- Pay off credit cards and debt calculator
- Pay down debt or invest calculator
- RRSP savings calculator
Use this calculator to figure out how much you need to save toward your goals.