Saving is an important part of managing your money because it can help you achieve major life goals. In this guide, we’ll discuss how a savings plan can help you, the types of registered plans available in Canada and how to start your own savings plan.
A savings plan is an intention to save a certain amount of money over a specified period of time. It can help you achieve your life goals, such as buying a house, retiring or going to school. The sooner you start contributing to a savings account, the easier it will be to reach your goals. Plus, the Canadian government makes it even easier to save by offering tax breaks when you use a registered savings plan.
Before starting a savings plan, it’s wise to build an emergency fund first. You should also consider eliminating high-interest debt before starting a savings plan.
A registered savings plan is a special type of savings account that’s registered with the Canada Revenue Agency (CRA). Being affiliated with the CRA means these types of accounts have tax benefits, including deferred or avoided taxation. The catch is that there are specific withdrawal and contribution limits to consider when using these savings accounts.
Here are the four types of registered savings plans available to Canadians:
There’s a clear tradeoff or balance that occurs between paying debt and saving — one involves money going out and the other involves keeping money in. Ideally, you should try to find a balance between saving and paying off debt.
The earlier you start saving, the easier it’ll be to retire and achieve other life goals. At the same time, factors like credit card debt or student debt can haunt you down the road, so a portion of your income should go to eliminating debt, too. Here’s a helpful roadmap for how to tackle savings while you’re paying off debt:
A good strategy is to first build up a smaller emergency fund of at least $1,000 or up to one month’s expenses before you start paying off debt. The idea is to make sure you have enough money saved up for smaller emergencies, so you don’t have to fall back on credit cards or payday loans while you’re in the process of paying off debt.
After you have your starter emergency fund, start paying off high-interest debt, which are debts that typically charge interest between 9% and 30% (like credit card debt). The rationale is that high-interest debt costs you the most amount of money in interest charges, so by paying it down first, you’re saving money in the long run.
After you’ve paid off your high-interest debt, it’s a good idea to build up your emergency fund. A good benchmark for a solid emergency fund is at least three months’ worth of expenses. The reality is, bad things happen to everyone. If you were to lose your job, for example, a larger emergency fund can prevent you from plunging back into the debt you just paid off.
Unfortunately, there isn’t a one-size-fits-all solution when it comes to a savings plan. How much you save depends on your income, expenses, financial goals and outstanding debt, among other things. Most people incorporate a savings plan into their budget by calculating their income and expenses, then allocating what’s left to savings.
Need help figuring out how much to save? Check out Finder’s savings calculator tool.
The 50:30:20 rule is a savings strategy that helps you manage your money by dividing your after-tax income into three main categories.
Keep in mind that the 50:30:20 rule is meant to be a benchmark. No one will be able to divvy up their finances this way perfectly, but it’s a good starting point. Below is an example of how to calculate where your money is going using the 50:30:20 rule.
Sofie earns $4,000 in gross income a month, and $1,000 is deducted from her pay for employer deductions. Her net earnings are $3,000, which means $1,500 (50%) goes towards needs, $900 (30%) goes to wants and $600 (20%) goes towards savings every month.
A good savings plan is one that aligns with your income, expenses and financial goals while being realistic and sustainable over time. It typically involves setting clear objectives (such as building an emergency fund), following a budgeting framework like the 50:30:20 rule and automating regular contributions to a registered savings plan like a TFSA or RRSP.
Beyond a registered savings plan, it’s also worth considering opening a high-interest savings account for easy access to a portion of your emergency fund. These accounts’ interest is a great way to make sure your emergency fund continues growing while it’s sitting there ready to be used. Peruse our list of the best banks in Canada or compare features of available savings accounts here:
To make comparing even easier we came up with the Finder Score. Interest rates, account fees and features across 50+ savings accounts and 25+ lenders are all weighted and scaled to produce a score out of 10. The higher the score the better the account - simple.
For most Canadians, the starting point of saving for retirement is with a registered retirement savings plan (RRSP). However, individuals can also save for retirement using their tax-free savings account (TFSA). Both of these registered accounts have significant tax benefits that should be taken advantage of before saving for retirement in a non-registered account.
Some employers offer RRSP matching as an incentive for their employees to save for retirement. Normally, this program is executed through the employer’s payroll system. A portion of the employee’s income is deducted from their pay cheque, and the employer contributes the whole or part of the amount as well. In other words, the employer matches what the employee contributes to their RRSP. If your employer offers this kind of program, consider taking advantage of it.
It can be hard to save without a goal number in mind. A guideline recommended by Fidelity is to save ten times your pre-retirement income by the time you retire (age 65 in Canada). Some financial planners instead say $1 million is the golden number.
The truth is, there isn’t a magical number that everyone needs to save for retirement because the cost of living and lifestyle vary from retiree to retiree. It’s best if you create a budget for your retirement life and work towards that figure. If you’re stuck or unsure, working with a financial planner can help you navigate the retirement savings process.
The goal is to start building up your savings. We asked Canadians how much they currently have saved through our Finder: Consumer Sentiment Survey March 2026, and it turns out that over 30% of Canadians (32.76%) have less than $5,000, while on the other end of the spectrum, only 3.02% have $1 million or more saved.
No matter where you find yourself on your savings journey, the old saying still stands—the best time to start saving was yesterday, but the second best time to start is today.
Many parents open a registered education savings plan (RESP) for their children when they’re born. If the child chooses to pursue post-secondary education, a withdrawal can be made from the RESP to pay for the education in part or in whole. Individuals can also save for education costs using a tax-free savings account (TFSA).
Later on in life, some individuals pursue education, but may have trouble affording the cost. If you have the cash in your registered retirement savings plan (RRSP), but don’t want to face harsh tax penalties, there is a loophole called the Lifelong Learning Plan (LLP).
Under the LLP, individuals can withdraw up to $10,000 in a calendar year from an RRSP to finance full-time training or education for themselves, a spouse or a common-law partner. The only catch is that you must repay the withdrawn amount over a period of 10 years. Normally, a 10th of the withdrawn amount is repaid every year. Consider the LLP as a way to borrow money from your RRSP to finance education costs.
Saving isn’t always easy, but here are some tips to make the most of your savings plan:
If you really want to maximize your savings, investing is the way to go. While savings accounts provide safety and liquidity, investing allows your money to work harder for you by potentially earning higher returns over time.
There are so many types of investments to consider depending on your risk tolerance, financial goals and timeline, such as:
If you’re new to investing or looking for the right platform, there are many user-friendly stock trading apps and platforms available in Canada that simplify the process and help you build your investment portfolio step by step.
Nearly everyone has a life goal, such as to retire, buy a home or go back to school. These goals come with a price tag, which is why it’s important to commit to a savings plan. As a Canadian, there are registered savings accounts that can help you achieve your savings goals faster. Once you’ve taken advantage of these, you can open a regular savings account too — just look for one with good bank account offers you can take advantage of.
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