20 y/o M 50k salary saving help

[claymore]

Hello,

I'm 20, living alone and making 50k salary.

Net pay cheque 1429

Rent 1117$, hydro 50$ avg, internet 100$ ,phone 35$.
Food 200 avg, gym 55$

How much should I be saving and how can I minimize my taxes paid?

I have no tax breaks as I understand I am in good health no dependents etc.

Thank you

Tldr how do I save and minimize my taxes paid?

 

[zoecc]

@claymore You are already relatively low in terms of income tax, because your net income is low (so you are in a low bracket already). There is not really much else you can do, if you were making more in a year there are ways to DEFER tax, but if you are 20 now, i would assume you will only be making more in future years.

 

[leopold425]

@claymore If you reduce your income, you pay less income tax.

 

[jjp297]

@claymore !StepsTrigger

 

[jaheim]

@claymore You are already in a low income tax bracket. You can open a RRSP, but generally its suggested to open one when you are in a higher tax bracket.

 

[claymore]

@jaheim People at work keep suggesting to open i
Up a rrsp account asap. Like you said waiting until I'm at higher tax bracket would be more beneficial. So my question is who do I listen to? My gut feeling is to invest/save through a tfsa and start putting money into rrsp when I'm making around 85k+.

My Saving/investing is mainly focused to short term. For example moving cost,furniture vehicle etc.

I'm planning on contributing into a rrsp when I'm closer to buying a home to use the FHB rrsp thing.

 

[jaheim]

@claymore Personally speaking, I would do that as well - max your TFSA first. If you end-up making 80k+ (Which is not a lot of money in the GTA for the record - esp if you want to buy a house) you will pat yourself on the back.

If you DON’T get to 80k+ you will STILL pat yourself on the back for emergency funds.

 

[claymore]

@jaheim For context my post is coming from MB

 

[jaheim]

@claymore Get a job in tech. Go to a coding boot camp. You’ll make an easy 80k working from home and live like a king.

 

[claymore]

@jaheim I work as a IT Technician wanting to move to sysadmin. I have 3 years experience in the field now. They hired me at the start of covid while I was in high school.

 

[zoecc]

@claymore Right now, if you want to put money into a TFSA, I would do a GIC in a TFSA. The interest rates are not bad right now. Then once the GIC matures, it’s still sitting in your TFSA. You can then leave it there (at a low interest rate) or renew your GIC.

I am guessing people at your work don’t understand the purposes of RRSPs and they are just tossing around the idea because it’s what the have been advised to do. RRSPs are essentially for tax deferral. When you take that money out of your RRSP, you will be taxed on it like you would regular income. So if you are making more money in when you take the money out, you will be taxed on that bracket.

 

[claymore]

@zoecc Thank you for this advice I appreciate it!

 

[mcb0805]

@claymore Rrsps.

 

[jonahua]

@claymore Internet from a smaller provider like techsavvy for example could bring down the cost a bit. You can look into it, otherwise you dont spend too much by the looks of it. Also surprised you only spend 200 on food.

 

[claymore]

@jonahua That's the average some months it's 100 bucks some months 300. Maybe a little more fair to say 225.

I watched a lot of "bodybuild on a budget" type videos growing up. it helped me a lot on how to cook cheap healthy meals when I moved out.

I rarely If ever go out to eat. I'm kinda the opposite of a foodie. As long it's edible and nutritious I'm happy