It’s FAQ Friday. We gathered the most searched finance questions our readers ask. Then we answered them simply. Each answer ends with one next step. Read fast. Act faster.
FAQ Friday Top Finance Questions — Short, Practical Answers
1) How big should my emergency fund be? FAQ Friday
Aim for 3–6 months of essentials. If your job is unstable, aim for 6–12 months.
Next step: calculate your monthly essentials today and set an automated transfer.
2) TFSA or RRSP (or IRA/401k if you’re outside Canada)? Which first?
Short answer: Use tax-advantaged accounts strategically. If you need tax relief now, RRSP-like accounts help. If you want flexible, tax-free withdrawals, TFSAs are great.
Next step: prioritize the account that fits your tax and withdrawal needs.
3) Should I pay off debt or invest? – FAQ Friday
If interest on debt > expected investment returns (after tax and fees), pay debt first. Otherwise, split between both.
Next step: list rates for each debt and compare to expected returns.
4) What credit score do I need to buy a home?
There’s no single number, but higher scores get better rates. In many markets, aim for a score that lets you avoid high-cost premiums.
Next step: get your free credit report and correct any errors.
5) How do I start investing with $100?
Pick a low-cost ETF or a micro-investing app. Use regular, automated purchases (dollar-cost averaging). Keep fees low.
Next step: open a low-fee brokerage or robo-advisor and set $25–$50 weekly.
6) What is a good asset allocation for beginners?
A starter mix: 60% equities / 30% bonds / 10% cash. Adjust by age and risk comfort.
Next step: pick two ETFs (one equity, one bond) and set automatic buys.
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7) How do I save for a house down payment faster?
Automate a dedicated savings account, cut non-essential spend, and use windfalls (bonuses, tax refunds). Consider side income.
Next step: open a named savings goal and set an automatic transfer every payday.
8) How much life insurance do I need if I’m single?
Even without dependents, life insurance can cover debts you co-signed, funeral costs, or leave money for a parent. Consider term coverage for debts and final expenses.
Next step: list debts and liabilities that would fall on others if something happened to you.
9) What’s the best way to handle irregular income? FAQ Friday
Create a base-month budget using your lowest 3–6 months of income. Put surplus into a buffer account for lean months. Automate savings on good months.
Next step: calculate your lowest 3-month average and build a 3-month buffer.
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10) Are robo-advisors safe and worth it? – FAQ Friday
They’re low-cost and automatic. Good for hands-off investors. Match the robo’s portfolio with your goals and fees.
Next step: compare two robo platforms on fees and minimums.
FAQ Friday – Share your comments and your questions!
