Just Turned 18? Your First-Time Money Toolkit
A practical Canadian starter kit: which accounts to open first, simple investing, and the small habits that actually matter.
Why 18 Changes Everything
You can now sign contracts, open financial accounts, and make your own money decisions. The goal for your first year is not to become a finance expert—it is to build simple systems that work on autopilot. Get these basics right now, and you will avoid expensive mistakes that trip up new adults.
Here is the truth: The biggest lever at 18 is not picking a star stock or timing the market. It is setting up the right accounts, automating your money flow, and avoiding obvious traps. That is genuinely 80% of the game. The rest is just details and patience.
Start With The Right Foundation
Your first account should be dead simple: a no-fee or low-fee chequing account with unlimited e-transfers and mobile deposit. Open a high-interest savings account (HISA) alongside it—this becomes your emergency fund and the place where short-term money lives before it gets deployed elsewhere. Here is a small trick that actually matters: nickname your accounts in your banking app. "Emergency Fund" and "TFSA—Investing" are far more useful labels than "Savings Account 1" and "Savings Account 2."
Once you have sorted the daily banking, it is time to think about registered accounts—the ones with actual tax advantages. The order matters here, so let us walk through it.
The Tax-Free Savings Account Comes First
If you are a Canadian resident with a Social Insurance Number (SIN), you start earning Tax-Free Saving Account (TFSA) contribution room on January 1st of the year you turn 18. The catch: in provinces where you are not legally an adult until age19—British Columbia, New Brunswick, Nova Scotia, Newfoundland and Labrador, and the Territories—most banks will not let you open one until then. Your contribution room still builds from 18, though, so when you do open it at 19, you will have two years' worth of room waiting.
Why does the TFSA matter so much? Because money grows tax-free inside it. Gains, interest, dividends—all yours, no tax. Withdrawals do not count as income, which means they will not affect government benefits down the road. For early-career earners making modest wages, the TFSA is almost always the first investing account to fund. The 2025 contribution limit is $7,000, and any unused room carries forward forever.
The First Home Savings Account — If Homeownership Is Real
The First Home Savings Account (FHSA) is newer and more specialized. You can open one once you hit the age of majority in your province, and meet the "first-time buyer" rules, which essentially means you have not owned a home in the last four-plus years. Only consider this if buying a place is realistically on your radar within the next 10 to 15 years.
The reason it is powerful: FHSA contributions reduce your taxes like an Registered Retirement Savings Plan (RRSP), but qualifying withdrawals for a home purchase are tax-free like a TFSA. It is the best of both worlds, with an $8,000 annual limit and $40,000 lifetime cap. If homeownership is not in your plans, or feels too far away to matter, skip this and focus on the TFSA. You can always come back to it later.
Registered Retirement Savings Plans (RRSPs) Can Wait (Usually)
Registered Retirement Savings Plan (RRSP) contributions reduce your taxable income, which is a bigger deal when you are actually earning decent money. Early in your career, when you are in a low tax bracket, most people get better value from maxing out the TFSA and FHSA first. That said, if you do contribute to an RRSP now, you can carry the tax deduction forward to use when you are in a higher bracket. It is not wrong to start early—it is just usually not optimal.
The Registered Education Savings Plan (RESP) Question: Mostly Closed, But Not Entirely
If your parents or grandparents opened a Registered Education Savings Plan (RESP) for you, learn how withdrawals work before you start post-secondary studies. The money is there; you just need to coordinate with whoever set it up.
If nobody opened one, the main government incentive—the Canada Education Savings Grant, which matched 20% of contributions—ended December 31 of the year you turned 17. That opportunity is gone. But there are two scenarios where an RESP still makes sense at 18.
First, if you were born in 2004 or later and your family had low income during your childhood, you can open an RESP in your own name and claim retroactive Canada Learning Bond money—up to $2,000—until the day before you turn 21. No contribution needed. It is free money if you qualify, so it is worth five minutes of research.
Second, even without grants, RESP growth is tax-deferred, and withdrawals are taxed in your hands as a student, likely at a very low rate. For most 18-year-olds, though, a TFSA offers more flexibility. The RESP door is not fully closed, but for most people, it is not the priority.
Automate Everything Because Willpower Fails
Here is the uncomfortable truth: relying on discipline and good intentions to manage money is a losing strategy. Willpower is finite. Automation is not.
Set up your paycheque to be direct-deposited into your chequing account. Schedule bill payments for the day after payday. Then—and this is the part that actually builds wealth—set automatic transfers each payday from chequing to your HISA for your emergency fund and from chequing to your TFSA for investing. Even $25 or $50 per paycheque creates real momentum over time.
One more thing: keep a small sinking fund in your HISA for irregular expenses like textbooks, car repairs, or travel. This is the money that keeps a $400 surprise from becoming $400 on a credit card at 20% interest.
Your First Portfolio Should Be Aggressively Boring
At 18, time is your biggest advantage. Markets will be noisy and chaotic. Your strategy should not be. You have got two straightforward paths, and both work.
The first option: buy a single asset-allocation Exchange-Traded Fund (ETF) in your TFSA and set up automatic purchases. These are globally diversified funds—thousands of stocks and bonds in one fund—that rebalance automatically. Vanguard Growth ETF Portfolio (VGRO), iShares Core Growth ETF (XGRO), and Vanguard Balanced ETF Portfolio (VBAL) are common examples. Pick an ETF based on how much volatility you can handle, automate the purchases, and check it once a year. That is it.
The second option: use a robo-adviser. You answer a questionnaire about your goals and risk tolerance, and they build and manage a diversified portfolio for you for a modest fee, usually between 0.4% and 0.7%. There is less tinkering, less second-guessing, same long-term outcome.
What you avoid is just as important. Concentrated bets on individual stocks, crypto "all-ins," complex products you do not understand, and hot tips from friends or Reddit are all ways to turn investing into gambling. Your objective is not excitement. It is durable compounding that quietly turns small contributions into significant wealth over decades.
File Your Taxes — Now Easier Than Ever, Thanks To Automatic Filing
Filing a tax return is still essential for unlocking benefits, credits, and building your contribution room with the Canada Revenue Agency (CRA). But starting with the 2026 tax year, the CRA will begin automatically filing taxes for millions of eligible low-income Canadians. If you qualify, the CRA will prepare a pre-filled tax return for you—online, by phone, or by mail—and you will just need to confirm your details. This new system is designed to ensure you receive benefits like the GST/HST credit, Canada Child Benefit, and Canada Disability Benefit, even if you have not filed taxes before.
If you have gig or self-employment income—like driving for a rideshare app, freelance work, or side hustles—you will still need to track every deposit, keep receipts, and set aside money for taxes. Automatic filing is currently focused on simple tax situations, so if your finances are more complex, you will need to file as usual. For self-employed individuals, remember you will owe both sides of Canada Pension Plan (CPP) contributions, which can catch people off guard. A simple spreadsheet and a scanning app will save you hours of panic in April.
As the CRA expands automatic filing, more Canadians will be able to access benefits and credits without barriers. Watch for notifications from the CRA if you are eligible and always review your information to make sure you are getting everything to which you are entitled.
Build Credit Deliberately, Not Desperately
You do not need a perfect credit score next month. You will need a solid one before you lease a car or apply for a mortgage. Start with a student or secured credit card. Charge a couple of predictable expenses like gas or groceries and pay the balance in full every single month. This is non-negotiable.
Keep your utilization low—this is the ratio of your balance to your credit limit. A $50 balance on a $500 limit signals responsible use. A $450 balance on that same $500 limit signals risk. The credit bureaus care about this more than you would think.
One more thing, and it is important: never co-sign a loan for a friend, no matter how good the story sounds. Their missed payment becomes your problem, and it will damage your credit. Protect future-you.
Protect Yourself From the Obvious Stuff
The CRA will never demand payment in gift cards. Your bank will never ask you to move money to a "safe account" over the phone. If something feels off, hang up, look up the real number, and call back. Most scams rely on urgency and fear. Slow down.
On the cyber front, use a password manager and turn on two-factor authentication for anything financial. Keep your phone and laptop updated. These are not exciting habits, but they are the difference between being secure and being a statistic. And guard your SIN, as it is a key piece of personal information that can be used for identity theft if it falls into the wrong hands. Most organizations do not require your SIN, except for specific purposes such as employment, tax reporting, or government benefits. If an organization asks for your SIN, you have the right to ask why it is needed and whether it is legally required. In most cases, you should only provide your SIN when necessary.
Decode Your Paycheque
Your take-home pay is lower than hours times wage because of CPP and Employment Insurance (EI) contributions, income tax withholding, and possibly benefit deductions. This is normal. If your employer offers a group savings plan with matching contributions, pay attention—that's real money. Contribute at least enough to get the full match. Leaving employer matching on the table is like turning down part of your salary.
Build an Emergency Fund That Actually Works
Your first financial target is $1,000 in your HISA. That is achievable within a few months of part-time work, and it is enough to absorb most small crises without reaching for credit. Once you hit it, keep building toward three months of expenses. The goal here is not returns—it is resilience. Cash sitting in a savings account might feel boring, but it is the foundation that keeps everything else stable.
The Mistakes Almost Everyone Makes
Chasing viral trends is one of the most expensive hobbies in finance. Meme stocks and flavour-of-the-month coins are entertaining until they are not. Broad-market exposure through low-cost index funds is boring, repeatable, and actually works.
Ignoring fees is the other silent killer. A fund charging 2% per year versus one charging 0.2% does not sound dramatic, but over 30 years, it is the difference between retiring comfortably and working five extra years. Keep costs low.
The all-cash trap is subtler. Cash preserves nominal dollars, but loses purchasing power over time as inflation grinds away. Keep your emergency buffer in cash but invest the rest according to your plan. And do not skip the sinking fund—a flat tire or textbook bill should not become credit card debt. Predict the "unpredictable" and you will avoid most financial emergencies.
Your Starter Checklist
- Open chequing + HISA (and nickname them in your app)
- Open TFSA (and FHSA if buying a home is realistic)
- Set up payday automation: bills > HISA >TFSA/FHSA
- Choose a one-fund portfolio or robo-adviser
- Get a student/secured credit card; pay in full monthly
- File your tax return; track any gig income
- Enable two-factor authentication; use a password manager
- Build the first $1,000 emergency buffer
- Review once a year—small tweaks beat heroic overhauls
The Payoff of Getting This Right
The biggest advantage at 18 is not picking the next Amazon or timing a market crash. It is building a simple system and letting time do the heavy lifting. You do not need perfection. You need to start, automate, and avoid obvious traps. Ten years from now, you will be glad you chose the repeatable path over the shiny shortcut.
A final note: some account eligibility—particularly for TFSAs and FHSAs—is tied to your province's age of majority. In jurisdictions where that is 19, you typically cannot open these accounts until then, even though TFSA contribution room starts building at 18. Check with your bank for specifics.
Harvey Naglie is a consumer advocate who regularly comments on the financial services sector. A former senior policy adviser with Ontario's Ministry of Finance, he brings extensive experience in financial regulation and investor protection to his advocacy work, holding an LL.M. in Securities Law and serving on the faculty at McMaster University's Directors College.