Personal Finance and Investment Tools

  • In May of 2022, I started my career on a salary that I felt was not in-line with cost of living expenses associated with the city that I had moved to. Looking back on it, my personal spending habits may have had something to do with why I felt my salary was inadequate. Regardless of whether it was my spending or a lack of income, I needed to find a way to make sure that my new life didn’t run my bank account balance to zero. At the time, I had nothing in place to help me differentiate between what I was spending of my salary, what I was spending of my prior savings, and what I was saving at my new job (it was nothing). The result of not having a serviceable personal finance setup was that I spent as if I were rich (I was not).

    As time progressed, I started to realize that this would not be sustainable over an extended period. I started to research how I could optimize my personal finances. I began looking into what financial tools were available to help me better keep track of my money, reduce random nonsensical fees, and exploit cash back offerings where it made sense. Let me preface that I am by no means the poster boy for responsible spending or saving, nor am I a financial advisor. However, I do think that I have found some great tools that can act as safeguards in order to ensure that my money is not disappearing into thin air, and to ensure that my money is working for me with minimal intervention. I’ll lay out a few of my favorite tools here (along with how I use them) in the hopes that it might help save my friends a few bucks and help them develop some good habits down the road.

    1. Wealthsimple – Cash Account, FHSA, TFSA, RRSP, Non-Registered (In that order)

    Cash Account – Like most, I signed up for a chequing account with one of the big banks when I was first starting out and never thought about it again. That was until I took a closer look into my transactions and noticed I was being charged a service fee of $6.95 a month. Fuck that. I figured there must be something that exists where you don’t have to pay to play. After some discussion with my ex-roommate and sifting through a few Reddit threads, I landed on the Wealthsimple Cash account. The reason that there are no fees on the Cash account is because Wealthsimple wants your money in their platform. They make it really easy to move your money around once it’s in there, and advertise heavily for you to use their other paid services such as managed investing or crypto trading (money obtained via fees). The idea is that once your money is there, you are more likely to spend it on other shit. It’s a similar concept (although not 1-to-1) to going to Costco for meat and produce and walking out with a nine pack of water bottles on top of the essentials you had originally gone in for. That’s what Costco wants, and in essence, that’s Wealthsimple’s incentive for offering a no fee Cash account. Let me lay out a few of the reasons why I think the account is sweet:

    • Monthly interest is gained on the balance of the account. This is not common amongst most traditional chequing accounts. The interest rate fluctuates based on the bank of Canada’s rates, but it typically falls in the range of 2-4%. What this has meant for me is that instead of spending $6.95 a month to have the account with CIBC, I am now earning monthly interest payments just for using the Cash account. Beer money! Pretty sick. 
    • The cash card for the account gains 1% cash back on all purchases. This is something that just does not exist with traditional debit cards.
    • ATM fees for any ATM are reimbursed. For bank ATM’s the fee is fully reimbursed and for scumbag ATMs (casino, Roxy, airport, etc.) a percentage of the fee is reimbursed.
    • Direct deposits can be invested automatically. This isn’t a feature that is unique to the Wealthsimple Cash account and there are definitely ways you can do it using other accounts. However, Wealthsimple makes this so easy. I use this feature to contribute a percentage of each pay cheque to my RRSP. This forces me to save a little each month for retirement without noticing that I am actually doing it. 

    You must be wondering what is the catch? Well, I have only noticed two shortcomings with the account so far. The first is that there is not yet the functionality to deposit cash or cheques. I do have a work around currently (see 2. Simplii – No Fee Chequing Account) that works well and is free. The other potential issue I have noticed is that there is no overdraft protection on the account. You won’t be penalized by Wealthsimple for over drafting your account since they don’t offer protection, but that likely won’t be the case when it comes to the biller so just be mindful of that. With that said, I love this account, and I can’t wrap my head around why anyone would use anything else for day-to-day banking. 

    FHSA – The FHSA is a registered investment account that allows for tax free savings as long as the money is eventually spent on a first home. The government allows for a contribution of $8k a year to this account and up to $40k lifetime contribution limit. The sooner you open this account, regardless of whether you contribute to it, the better, as for each year it is open, you have $8k worth of contribution room. You’ll want to reach that lifetime maximum of $40k as quickly as possible so that the money you have invested can grow for the longest period of time prior to buying a house. I personally max out the $8k contribution limit as soon as I possibly can and here are a few other reasons why:

    • Whatever you contribute into the account lowers your taxable income (similar to an RRSP). This means that you should get a good tax refund just for contributing to the account. The exact refund amount you get depends on your marginal tax rate but let’s say you contribute the full $8,000 in a year and you are in the 30% tax bracket, your tax refund would be $2,400 (i.e., 30% of $8,000). Note that you do not need to claim the refund immediately and you can claim it at any time in the future (I’ll touch on this in a moment). To me this seems like a no brainer because you are saving for a house, and at the same time getting a nice chunk back on your tax return in March (if you chose to claim the refund at that time). You could then even chose to reinvest the refund to keep that money working for you. Smart investing.
    • If you don’t end up buying a house, you can roll the money from the FHSA into your RRSP account without any penalty and without incurring any additional taxes on the investment earnings. Zero downside. 

    TFSA – I think the TFSA is pretty self-explanatory – savings that are tax free. The only things I want to mention here is that I typically try to reach my contribution limit for the TFSA account only after I have maxed out my FHSA. Be sure to check your CRA account homepage to see exactly how much contribution room you have. Over contributing will incur a penalty that is counterproductive (same applies for FHSA and RRSP). 

    RRSP – RRSP contributions are something that I do mostly through my work (via Manulife) because they offer contribution matching (pick up free money when offered). However, I was not satisfied with the amount that I was contributing overall and wanted to contribute a little more on my own (I use 10% of my salary as a rule of thumb for RRSP contributions). I did not want to use Manulife for any unmatched contributions simply because their UX is brutal, so instead, I invest a small percentage of my pay cheque into the Wealthsimple RRSP (on top of what I am doing through work) so I can have complete autonomy over what I am investing in and have better visibility into the returns. Any contribution into your RRSP also lowers your taxable income (similar to FHSA). The RRSP account is not tax free but instead tax deferred. This creates a fork in the road when it comes time to do your taxes because you can use your tax deductions now, or alternatively, time your deductions to coincide with higher marginal tax rates at a later date. Thus, you can invest now and make the deduction in 5 or 10 years. Of course, this involves a tradeoff: if you claim it now (with a marginal tax rate of 30%) you can invest it in a stock of your choice this year. If, on the other hand, you wait 5 years until your marginal tax rate is (say) 45%, you will get a bigger refund, but the Government of Canada has had use of your money for 5 years. You forego the investment gains of the smaller refund. This is why it could be useful to consult with the fine professionals at H&R Block (or your dad) when it comes time for your taxes because these things can be a little confusing.

    Non-Registered Account – A non-registered investment account is an account for which the Government of Canada does not offer any tax relief like they would for a registered tax free account such as a TFSA or FHSA. This account should come into play once you have maxed out your contributions for all the previously mentioned accounts. If you are in your 20’s and are putting money into this account, I would say that you are in fairly good shape with your investments so kudos to you. 

    2. Simplii – No Fee Chequings Account

    As I had mentioned above, the Wealthsimple Cash account does not let you deposit cash or cheques directly into the account. As I still occasionally receive cheques from my Nana on birthdays and Christmases, I needed a mechanism that allowed me to get this money from paper into my Cash account. This is where the Simplii No Fee Chequing account came into play. Although Simplii is a division of CIBC, they don’t charge the same fees on their chequing account as CIBC, making it a perfect point solution to my “Nana cheque problem”. I do not know the exact incentive for Simplii to offer a no fee chequing account, but I would assume it is similar to Wealthsimple and they want to push their paid products on you. With the association to CIBC, you also get free access to any of their ATMs to deposit cash. They are additionally offering a promotion right now where if you direct deposit $100 into the account for 3 consecutive months, you receive a $500 bonus (pick up free money when offered).

    3. American Express – Cobalt Credit Card

    Listen, all credit cards are essentially the same. Some people will tell you that this one is better than that one or you got to get this one because it offers the best points on Uber Eats etc. etc. The benefits from most major credit cards are similar unless you are spending a fuck ton of money. As someone who is only spending a shit ton of money, it really doesn’t matter to me, and I wouldn’t notice a huge difference between an AMEX or say a Cash Back Mastercard Elite. I have the American Express Cobalt card because it looks sick. That’s it. I will say that it does provide decent cash back as far as I can tell, but the thing doesn’t work at about 10-15% of the places I try to use it. But man is it crispy when you pull it out of your wallet, and for that reason, I will continue to hype it up at every family gathering to try and get the referral bonus.

    4. Parents Credit Card

    This card is must. Use sparingly to avoid detection or for emergencies only.

    5. Monarch – Spending and Budgeting Tool

    I have just recently started using Monarch, but so far, I am really liking it. What Monarch allows you to do is automatically tap into any bank account, investment account, or credit card you have, and provide a view of all your transactions in one place. By having all your transaction data in one place, the app also lets you create budgets, see income vs expenses, and just have an overall clear view of your spending across all accounts. The app also automatically categorizes spending (although some intervention may be required for complete accuracy) which lets you drill down into your spending habits. The app unfortunately costs $100 per year to use which is a dagger. You could alternatively leverage Plaid APIs to get your transaction data and build similar dashboards yourself, but I’d rather spend my free time doing literally anything else, so for now I’ll soak the $100.

    6. Bitwarden – Password Manager 

    Are you someone who finds themself using the same password for every account? Do you find yourself constantly forgetting which variation of the same password you used for a given site? Then a password manager might be for you. For those that are unfamiliar with how a password manager works, it is a tool that will give you a complete nonsense password (i.e., UR3qb48394##$B%hdaiuf#) for any given account and then store it in a secure vault. You may ask, how the hell am I going to remember that password? Well, that is the absolute beauty of a password manager because you no longer have to remember (or know) any of your passwords. The password manager will keep all your information securely stored and then when you need to login to an application or site, it will autofill your stored credentials for you. I started using a password manager because I was sick typing in log-in credentials. The effort to get Bitwarden fully setup did take me some time (approx. 3-4 hours) as I needed to go through every account ever and generate a new nonsense password, however, now that it is setup, my life is awesome. It should go without saying that this also will increase your personal IT security 10-fold. It should also be noted that all password managers work pretty much exactly the same so you can pick whichever one you like. I just chose Bitwarden because it was free and had good reviews.

    7. Bet365 – Gambling App

    If you would have asked me in November, I would have told you that this app is the most powerful financial tool I have at my disposal. I. Could. Not. Lose. However, as is typically the case with gambling, my horse-drawn carriage has turned back into a pumpkin and my winnings along with my original deposits have disappeared because I could not hit a JT Miller ATG. C’est la vie. I am currently no longer recommending this as a viable tool for your financial success. The situation does however remain fluid and is certainly subject to change after a few beers. 

    Final Thoughts

    In conclusion, I want to emphasize that I am not a financial advisor nor am I someone that should even resemble the face of responsible spending or saving. The reason for writing this post is because I have often found that people my age aren’t aware of the tools out there or how to use the tools available to make their money work for them and contribute to their long-term financial health. This is something that I have taken an interest in over the last couple years, and I wanted to share what I had learned. I would absolutely love to hear from you if you have differing thoughts, other tools, or any questions at all about what I have written here – please reach out! Anyways, here is to a fiscally responsible 2025 and me getting my swagger back on Bet365.