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The first month of the year is a good time to start planning your finances and taking charge of your money. Waiting till the end of the year before implementing your savings and investing plans means that you have allowed 12 months to go by without utilizing compound interest to your advantage.

Financial Steps To Take in 2020

As you move to implement your New Year’s resolutions, this financial checklist will help you focus on some of the key financial steps you need to take.

1. Contribute to your TFSA

The Tax-Free Savings Account (TFSA) is one of the best vehicles we have in Canada for saving money. 

For 2020, the TFSA contribution room remains at $6,000. If you have been eligible to contribute to a TFSA since it was introduced in 2009, your total contribution room is now $69,500.

A TFSA account is very flexible and can hold a variety of investments. You can use it to save for anything – wedding, home down payment, vacation, emergency fund, etc. You can withdraw your funds whenever you want and re-contribute the amount you withdrew in a future year.

No taxes are due on earnings generated by your account unless you run afoul of the rules put in place by the government.

The sooner you start contributing to your TFSA, the faster it will grow.

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2. Contribute To Your RRSP

RRSP contributions are tax-deductible and will save you on taxes today while allowing you to grow your retirement pot. 

For 2020, your RRSP contribution limit is 18% of your earned income, up to a maximum amount of $27,230. If you have not yet maxed out your contributions for the 2019 tax year, you can still do so up until the end of the RRSP season, which is March 2, 2020.

Contributions made until the deadline can be used to claim a tax deduction for the 2019 or 2020 tax years. It can also be carried forward to future years.

If you are turning 71 in 2020, you can make your last RRSP contribution before December 31, 2020. By next year, you will be required to close your RRSP and do one or a combination of the following: withdraw cash, convert to an RRIF, or purchase an annuity.

Your RRSP is not only for retirement. You can also withdraw funds tax-free to buy a house or go back to school.

Related: Don’t Play Around With Group RRSPs

3. Contribute To An RESP

College tuition keeps rising and a registered and a Registered Education Savings Plan (RESP) is one way to provide your kids with an opportunity to obtain post-secondary education without the debt.

Contributions you make to your kid’s RESP qualify for matching government grants at 20 cents for every $1 of contribution, up to $500 in grant money per year (i.e. grant on $2,500 in annual contributions).

You can put up to a lifetime maximum of $50,000 per child in an RESP account that qualifies for a maximum Canada Education Savings Grant of $7,200. Low-income families may qualify for additional grant money (a-CESG and Canada Learning Bond).

It is advisable to start contributing to an RESP early so that compound interest can grow the account over time. Funds in an RESP grow tax-free.

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Financial Checklist for Canadians - Annual Financial Review

4. Pay Off Debt

It is never too early to start thinking about paying off debt, particularly, high-interest debt like credit cards. 

Create a budget that allows you to set aside specific amounts of money every month to settle your debt obligations. Consider paying off credit card debt before saving/investing in a TFSA or RRSP. This is because interest rates on credit cards can reach 20% or more, exceeding any realistic returns you can expect on your investments.

Here are 10 strategies for paying off debt this year.

It may be easier for you to pay off debt when you increase your monthly income using side hustles or passive income strategies. One other strategy is to spend less by utilizing these 100 money-saving tips.

Related: How To Check Your Credit Score For FREE in Canada

5. Tax Filing For 2020

The tax-filing season will soon be upon us. The deadline for filing your 2018 taxes is April 30, 2020, for most Canadians. Self-employed individuals have until June 15, 2020. 

There are many free options for filing your taxes in Canada and you should do so early so you can put your refund money to work right away!

Make sure to utilize all the tax deductions you qualify for and don’t leave money on the table.

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6. Audit Your Investment Portfolio

If you forgot to audit your investment portfolio at the end of last year, it’s time to get on it. Two important things to note:


If you are a DIY investor and invested in ETFs or Index Funds, you will need to re-balance your portfolio 1-2 times a year. This is to ensure that your asset holdings are still in line with your investment goals and risk tolerance.


Fees cut into your investment returns and should be minimized wherever possible. For example, if you are invested in mutual funds, you should take a look at the fees you are paying and be certain they are worth it. 

Mutual funds are extremely expensive in Canada and we pay some of the highest MERs in the developed world! Check if your comparative returns are worth justifying the fees you are paying.

Robo-advisors provide a lower-fee option for investors who are not comfortable with managing their own portfolios or who cannot be bothered with the hassle of re-balancing. They can:

  • provide a customized portfolio that suits your investment goals, time horizon, and risk tolerance.
  • automatically rebalance your portfolio as required, re-invest your dividends, and more.
  • lower your fees by using low-cost ETFs and charging lower management fees.

Even if you manage your own portfolio using online discount brokerage accounts, you should still audit how much you are paying on fees. Many investors end up buying and selling too often and rack up trading commissions that dampen their overall returns. 

In addition to fees on investment fees, you should aim to pay less in bank fees in general. You can easily open a free chequing account and stop paying this monthly bank fee as well!

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Closing Thoughts

When you start the new year by charting your financial goals and how you aim to reach them, chances are that when you do your end-of-year financial review, you will have met most (if not all) of them.


Financial Checklist For Canadians in 2020