Post-Graduation Financial Priorities
| Priority | Timeline | Action |
|---|---|---|
| 1. Emergency fund | Month 1-6 | Build $1,000-3,000 |
| 2. Understand student loans | Month 1 | Know your balances, rates, grace period |
| 3. Budget creation | Month 1 | Track all income and expenses |
| 4. Start TFSA | Month 2-3 | Begin saving/investing |
| 5. Build credit | Ongoing | Use credit card responsibly |
| 6. RRSP (if employer match) | If offered | Never leave matching money on the table |
Student Loan Repayment Strategy
Federal vs Provincial Loans
| Feature | Federal (Canada Student Loan) | Provincial (varies) |
|---|---|---|
| Grace period | 6 months (no interest during) | Varies (some charge interest) |
| Interest rate | Prime + 0% (currently 0%) | Varies by province |
| Repayment Assistance (RAP) | Available if income low | Varies |
| Tax credit | Interest is tax-deductible | Tax-deductible |
Repayment Options
| Strategy | When to Use |
|---|---|
| Standard repayment | Stable income, can afford payments |
| Repayment Assistance Plan (RAP) | Income under threshold, reduces/eliminates payments |
| Pay more than minimum | If you want to pay off faster |
| Minimum payments + invest | If loan rate < expected investment return |
Building Credit
| Action | Impact |
|---|---|
| Get a credit card | Starts your credit history |
| Pay full balance monthly | Builds positive payment history |
| Keep utilization under 30% | Improves credit score |
| Don’t apply for too many cards | Hard inquiries hurt score temporarily |
| Keep old accounts open | Length of history matters |
First Year Budget Template
| Category | % of Net Income | Example ($3,500 net/month) |
|---|---|---|
| Rent | 30% | $1,050 |
| Utilities/Internet | 5% | $175 |
| Food | 12% | $420 |
| Transportation | 10% | $350 |
| Student loan payment | 10% | $350 |
| Savings/Investing | 15% | $525 |
| Personal/Fun | 10% | $350 |
| Misc/Buffer | 8% | $280 |
TFSA vs RRSP for New Grads
| Factor | TFSA Wins | RRSP Wins |
|---|---|---|
| Income level | Lower income now | Higher income now |
| Future income | Expect higher income later | Expect similar or lower |
| Accessibility | Need flexibility | Can lock away for retirement |
| Employer match | RRSP match available | β Always take matching |
Default for most new grads: TFSA first (flexibility, likely lower tax bracket now).
Common New Grad Mistakes
| Mistake | Better Approach |
|---|---|
| Luxury lifestyle immediately | Live frugally first 1-2 years, bank raises |
| Ignoring student loans | Understand your loans, make a plan |
| No emergency fund | $1,000 minimum before discretionary spending |
| Carrying credit card balance | Always pay full statement balance |
| Buying a new car | Used car or transit for first few years |
| Not negotiating salary | Research market rates, negotiate your offer |