When you are young, time is on your side to take advantage of compound interest and earn on investments. It is important to know what you are saving towards, how much time you have to save in relation to how frequently prices change, and you must be familiar with the financial instruments available to you.

Savings

Financial instruments will allow you to find out if you can separate your money in order to save, or if you can generate some growth.

For example, a simple savings account has limited interest but permits you to have access to your money on short notice without penalties and you can apply it to any amount. This works well if you just want to set some money aside or if you know you will need it soon.

Money market accounts are also available at all banks and tend to earns a bit more interest than a simple savings account. However, these have balance requirements, which require you to possess amounts that you may not have yet. Access to money market funds tends to be straight forward as well and without penalties in most cases if you stay above a given balance.

You should familiarize yourself with other types of saving accounts like GIC, TFSA, RESP, RRSP, etc. The sooner you understand how these works the sooner you can choose which can make your funds work for you. Time is truly of the essence in this case. The following is an example of saving accounts at a few banks on Aug 2022. The rates for these will surely change as time goes on, these are only meant as an example so interest rates can be compared.

Always read the small print twice, notice for example that some of the higher interests are only applicable to new deposits. This is very common at all banks.

source: https://www.cibc.com/en/personal-banking/bank-accounts/savings-accounts.html

The following is another example at a another bank.

source: https://www.td.com/ca/en/personal-banking/products/bank-accounts/account-rates/

All banks and credit unions offer similar options. You can continue your research by searching banks like RBC, Scotia bank, BMO, etc. Rates fluctuate all the time, and depend on the current state of the economy.

Investing and Trading

Most banks nowadays have trading accounts directly through the banking accounts. If you are ready for trading, you could simulate your investments to gain some sense if you'd succeed in being profitable before you actually purchase any stocks. You can run simulations via MS Excel, Google Sheets, or software that helps you predict what your returns would have been if you were to invest. You can simulate historical data from stock charts in the past, or you could pretend to move with the markets as they happen daily which is a lot more realistic.

Apply yourself within such a simulation to ensure profits can be made with the exact funding you possess. If you keep pace with the markets in your simulation you can also experience the emotionality that comes with the ups and down of the selected market.

You should not invest until you have tested, tracked the market for at least a few weeks, and verified the specific fees associated with trading that would be applicable from your specific trading account, which can change the formula you use for calculating your profits.

If you intend to invest in a large variety of stocks, you have to make sure that you are able to track the large number of companies accordingly. Get a feel if you'd be able to react in a timely manner to all of them. Consider the effects that currency exchange will have on you liquidating your investments when you want to liberate your funds from investments that require a repurchase of your local currency before they can be used. Exchanges that trading accounts provide are never exactly the same as those listed on various websites. The following is such an exchange example on Google Finance: https://www.google.com/finance/quote/CAD-USD, the rates offered by your bank would always be a bit worse than the ones seen on real-time data so you must calculate a buffer zone so the final exchange does not ruin your investment.

The following examples show:

(1) a customized excel file (we chose this video because you can download the file in the video link and save you the work).

(2) a software that does the calculations for you.

An online search will reveal a multitude of such tutorials, for example Google Slides can replace Excel to generate similar results for you.

Other Considerations: To invest money you have to have it, this means you may need to get a job...

If you are looking for a job, make sure to read the First Job, dos and don'ts section. This and similar video on that page will help you land a job faster. Use the advice to polish your resume and connect with other youth on platforms such as LinkedIn.

Part of being financially savvy means that you also must learn to avoid identity theft.