Personal Financial Health Basics: The No-Nonsense Guide to Getting Ahead

Sep 3

3 min read

Let’s be real—personal finance doesn’t have to be complicated. If you can follow a few core principles, you’ll be miles ahead of most people financially. Today, I’m breaking down the basics of personal financial health in Canada: emergency funds, savings, investing, and even how to make the banks and credit cards work for you—not against you.

Step 1: Build Your Emergency Fund

Think of your emergency fund as your financial seatbelt.

Employees should aim for at least 3 months of essential expenses.
Entrepreneurs—since your income is often unpredictable—you’ll want closer to 6 months of expenses.

And here’s the kicker: never let your emergency fund sit in a traditional Big 5 bank savings account earning less than 1% interest. That’s basically giving away free money to the banks.

Instead, park it in a high-interest savings account (HISA) with banks like Neo, Wealth simple, or EQ Bank. They offer free everyday accounts and competitive interest rates, which means your money actually grows while it sits there waiting for emergencies.

Step 2: Know Your Numbers

You can’t manage what you don’t measure.

You should know:

Exactly how much you make each month and each year.

From there, commit to putting away 10–20% of your income. This can go towards:

Short-term savings (your 3-6 month emergency fund, travel fund, etc..)
Debt repayment
Long-term investments

Do this consistently, and you’re building wealth on auto-pilot. At Pacific Ledger, we help business owners know their numbers so they can confidently complete this step of the financial health checklist.

Step 3: Crush Debt, Then Max Out Your TFSA

Debt—especially high-interest debt—is a wealth killer. Pay that off first.

Once you’re debt-free, your Tax-Free Savings Account (TFSA) becomes your best friend. Why? Because every dollar you earn inside your TFSA grows tax-free. That means tax-free retirement income down the line. Don't sleep on this opportunity.

Step 4: Use Your RRSP Strategically

After maxing out your TFSA, consider putting money into your RRSP—but only if it makes sense for your tax situation.

Consult with a tax professional for specifics, but our simple suggestion is:

If you’re in the third tax bracket or higher, RRSP contributions can save you a lot on taxes.
If you’re below that, focus on your TFSA first. Chances are your tax bill isn’t high enough yet to make RRSPs worth it. Keep in mind that when you withdraw from your RRSP, the entire dollar amount is taxed as income — both your contributions and the investment growth. This is different from a non-registered account, where only the interest, dividends, and capital gains are taxable.

NOTE: TFSAs and RRSPs are NOT investments. They are simply registered accounts that hold your investments. You need to choose the stocks, bonds, T-bills, GICs, Mutual funds, Index funds, or ETFs to invest in, in order for your money to grow. This is done through a brokerage account like Questrade or Wealth Simple. Some other banks like Neo or EQ Bank offer GICs and Mutual funds in those registered accounts.

Step 5: Budget for Needs, Wants, and Guilt-Free Spending

Once your savings are handled, your budget should cover:

Housing
Transportation
Utilities
Groceries

After those are paid, the rest is your discretionary budget—aka guilt-free spending. This is your fun money for things like eating out, hobbies, or travel. The point is: enjoy your money, but only after you’ve taken care of savings and essentials.

Step 6: Stop Paying Bank Fees

Never—and I mean never—pay monthly account fees at a Big 5 bank. In 2025, there’s no reason for it. Credit Unions or online banks like Neo, Wealth Simple, and EQ Bank offer free personal accounts for everyday spending and bill payments, plus free high-interest savings accounts. These banks currently offer 1.5% - 3% on savings accounts.

Why pay $15–$30 a month for something you can get free elsewhere? That’s $180–$360 down the drain, when you could be EARNING $180–$360 per year on your emergency fund.

Step 7: Learn to Use Credit Cards Like a Pro

Credit cards aren’t evil—they’re powerful tools when used responsibly.

Pay them off in full every month.
Use them for everyday spending (only what you’d normally buy anyway).
Collect points, cashback, and perks
Enjoy enhanced fraud protection and insurance like travel insurance, purchase protection, and extended warranties.

Yes, credit card debt is a huge no-no. But if you stay disciplined, you’ll not only avoid interest charges, you’ll actually profit from your spending.