Money habits start well before post-secondary: a first bank account, a first job and a first budget. This page covers the basics for Canadian teens, from a youth account at 12 to a TFSA and a first credit card at 18. For what comes next (paying for college or university), see the student money guide; parents planning the September shopping trip will find back-to-school costs useful.
Money Milestones by Age
| Age | Milestone | Action |
|---|---|---|
| 12-13 | Understand money basics | Open youth bank account, learn saving vs spending |
| 14-15 | First income (odd jobs, allowance) | Budget income, start saving habit |
| 16-17 | Part-time job | File first tax return, understand deductions, save for goals |
| 18 | TFSA room starts | A TFSA, a first credit card (student or secured), investing |
| 18-19 | Post-secondary plans | Understand student loans, RESP, apply for scholarships |
Budgeting for Teens
Simple Budget (Part-Time Job, $800/month)
| Category | Amount | % |
|---|---|---|
| Savings (pay yourself first) | $160 | 20% |
| Needs (phone, transit, school) | $240 | 30% |
| Wants (entertainment, food, clothes) | $320 | 40% |
| Giving / emergency fund | $80 | 10% |
| Total | $800 | 100% |
Budgeting Tools for Teens
| Tool | Cost | Best Feature |
|---|---|---|
| KOHO app | Free | Auto-categorizes spending |
| Google Sheets (template) | Free | Full customization |
| Wealthsimple Cash | Free | Tiered interest and instant transfers to investing (its purchase-roundup feature was discontinued in April 2025) |
Banking for Teens
Most big banks offer a youth account with no monthly fee, often with a debit card and a parent’s co-signature until a set age. The accounts, age limits and features are compared on teen and youth bank accounts. At 18 or 19, when youth accounts end, student bank accounts and online banks are the usual next step.
Understanding Compound Interest
Compound interest means earning returns on past returns, so money invested earlier has longer to grow. The example assumes a 7% annual return compounded monthly, which is an assumption, not a forecast: real returns vary from year to year and can be negative.
| Start age | Monthly deposit | Value at 65 (7% a year, compounded monthly) |
|---|---|---|
| 15 | $100 | $544,807 |
| 18 | $100 | $438,643 |
| 25 | $100 | $262,481 |
| 35 | $100 | $121,997 |
Starting at 15 instead of 18 adds three years of deposits and three more years of growth on everything deposited, which is why the gap between the first two rows is larger than three years of $100 deposits.
First Credit Card (Age 18)
How to Build Credit
| Step | Action |
|---|---|
| 1 | Apply for a student or secured credit card |
| 2 | Make small purchases only (gas, phone bill) |
| 3 | Pay the full balance every month |
| 4 | Keep balances well below the limit (lower use of available credit helps a score) |
| 5 | Set up autopay to never miss a payment |
| 6 | Check credit score free (Borrowell, Credit Karma) |
First credit cards
At 18 (19 in some provinces, depending on the age of majority), the usual first cards are student cards with no annual fee and a small limit, or a secured card backed by a deposit. Cards for students, with their fees and earn rates, are compared on student credit cards.
Understanding Credit Scores
Canadian credit scores run from 300 to 900, and payment history and how much of your available credit you use weigh most heavily. How scores are calculated and what each range means are on the credit score hub; keeping balances low relative to limits is covered on credit utilization.
Investing at 18
TFSA Basics
| Feature | Details |
|---|---|
| Eligibility | A Canadian resident aged 18 or older with a valid SIN |
| Room for the year you turn 18 | $7,000 in 2026 |
| Tax | Growth and withdrawals are tax-free |
| What it can hold | Savings, GICs, ETFs, stocks and bonds |
How TFSA room builds up from the year you turn 18 is explained in the TFSA guide, and the rest of the account rules are in the TFSA hub.
Where to Invest
A TFSA can be opened at a bank, a credit union or an online brokerage, and the choice mostly comes down to fees and what you want to hold. Brokerages are compared in the online brokers hub.
Key Concepts Every Teen Should Know
| Concept | One-Line Explanation |
|---|---|
| Compound interest | Earning returns on your returns |
| Inflation | Rising prices: money that doesn’t grow buys less over time |
| Credit score | A number (300-900) showing how well you handle debt |
| TFSA | Tax-free savings/investing account at 18 |
| Budget | A plan for where your money goes |
| Emergency fund | 3 months of expenses saved for unexpected costs |
| Net vs gross income | Gross is before tax; net is what you actually receive |
| Needs vs wants | Must-haves vs nice-to-haves |
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them on August 29, 2026. How we check facts.
- Canada Revenue Agency: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE