Jul 23, 2026
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What would you do if you had an extra $3,000 a month after tax? Would you know what to do with it? While this might seem like a purely hypothetical situation, it’s a standard monthly occurrence for one Redditor — and they took to the internet for some advice on how to use that excess income wisely.
Reddit user Valorenn laid out their financial situation in the popular Subreddit: Personal Finance Canada. The 27-year-old takes in $6,200 a month after taxes between their job and a rental unit in the house they live in. They say their expenses are around $3,200 a month, leaving them with a surplus of $3,000.
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Of that $3,000, the Redditor said they’ve been putting an extra $1,750 towards their mortgage, which is at an interest rate of 4.19%, and saving the rest in a number of different savings accounts for various events (e.g. vacations, house upgrades, emergency fund, etc.).
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As explained in their post, Valorenn has $10,000 as an emergency fund, $3,000 in a vacation fund, as well as $6,000 in a separate home renovation fund, and is paying quite a large chunk in income tax. To offset this, they have been putting more into their Registered Retirement Savings Plan (RRSP).
Although they feel financially well-off — including having zero debt other than their mortgage — they recognize a gap in their financial abilities.
“I’m sure I could make more investing but I honestly don’t know where to start and my tolerance for risk is pretty low,” they write. Fellow Redditors chimed in.
The comments section was awash with a variety of takes, many mentioning maxing their Tax Free Savings Accounts (TFSAs) or RRSPs and increasing their investing knowledge with an online course. Others suggested the user open a self-directed investing account and invest in newsworthy tech companies, such as Microsoft (TSX: MSFT.TO), Google (TSX: GOOG) and Nvidia (TSX: NVDA.TO).
Some focused on a longer-term horizon, saying the user should invest 10% of their pre-tax income toward retirement. Other Redditors had a more near-term perspective, suggesting the user should simply enjoy themselves or “buy a good time in a lot of countries.”
One user even suggested investing in Pokémon trading cards, saying they are “in a period of stable growth.”
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A post that resonates beyond Redditors
While the surplus income of $3,000 is not relatable to many Canadians, the feeling of uncertainty about investing is a common motif across the country. An Ipsos poll completed on behalf of CIBC’s Investor’s Edge found that just a small majority of respondents (56%) were comfortable investing their personal cash, while only 51% categorized themselves as knowledgeable about investing.
The problem is, hesitancy about investing can erode your purchasing power. Simply having money sitting idle in an account can actually result in a net loss when taking into account inflation.
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Canada’s Consumer Price Index (CPI) sat at 2.8% in June, down from 3.2% in May, but essential items that make up the CPI are hitting Canadians’ purchasing power the most. Gasoline was still up 20.5% year-over-year, and grocery costs were up 3.9% annually and have exceeded the headline CPI figure for 17 consecutive months.
And this data is starting to show signs in consumer sentiment as well. A survey from United Way found that 46% of Canadians surveyed could only cover basic expenses for a month or less.
Yes, having funds easily accessible in a savings account is important, but if you don’t have a way to outpace inflation through investing, that’s money that you can’t get back.
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How to put your money to work
Like that Redditor and many other Canadians, you might feel unsure how to start investing your money. It doesn’t take much to see returns over a long-term horizon, but you need to start on the right foot. Here’s some beginner-friendly advice to get you more comfortable with making your money work.
Build your financial foundation first
Before beginning your investment journey, make sure you have an emergency fund that can cover three to six months’ worth of essential expenses. It’s important to have one in place so you can leave invested funds in the market — allowing gains to flourish and not locking in losses by selling.
Keeping this money in a high-interest savings account (HISA) allows it to remain accessible while earning interest, and if you still have available contribution room, holding a HISA inside a Tax-Free Savings Account (TFSA) can help those interest earnings grow tax-free. With many online HISAs currently paying around 2% to 3% annually, your emergency fund can at least keep pace better than cash sitting in a standard chequing account.
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Make the most of registered accounts
Canada’s registered accounts can help your money grow faster by reducing or eliminating taxes. A TFSA lets your investments grow tax-free and allows you to withdraw money without paying tax, giving it a greater sense of immediacy if needed. A Registered Retirement Savings Plan (RRSP) provides an upfront tax deduction while allowing investments to compound tax-deferred until retirement. And if you’re planning to save for a child’s education, a Registered Education Savings Plan (RESP) offers access to generous government grants in addition to tax-deferred growth. Which account makes the most sense depends on your goals, income and when you’ll need the money.
You can also place investments inside these accounts, further benefitting any compound growth that can help augment any retirement, education or sizeable savings.
Whether you’re a beginner or a pro, find the best trading platform for you. The best Canadian brokerage offers the tools you need to grow your wealth. To get started — and earn 2% or more on every dollar you save — open a no-fee RRSP high-interest savings account with EQ Bank. Start building your RRSP today with EQ Bank
Invest for the long haul
Once your emergency savings are in place, consider investing regularly in a diversified portfolio rather than trying to pick winning stocks or time the market. Broad-market exchange-traded funds (ETFs) or diversified mutual funds spread your investments across hundreds or even thousands of companies, reducing the impact of any single investment underperforming.
For ETFs, a good rule of thumb for any investor is to keep their costs low, diversify broadly across the entire globe and to simplify their portfolio whenever possible.
For most beginners, that means choosing an all-in-one asset allocation ETF that best suits your risk tolerance and time horizon. Some examples include:
- Vanguard Conservative ETF Portfolio (TSX: VCNS.TO) for a Canadian equity ETF
- iShares Core Equity ETF Portfolio (TSX: XEQT.TO)
- Vanguard All-Equity ETF Portfolio (TSX: VEQT.TO)
- Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC.TO) for a global equity ETF
- iShares S&P/TSX 60 Index ETF (TSX: XIU.TO) to gain exposure to major Canadian industries like financials, energy, and materials from the 60 largest companies on the TSX
- iShares S&P/TSX Capped REIT Index ETF (TSX: XRE.TO) to gain exposure to top real estate companies in Canada
Don’t be afraid to ask for help
If you’re unsure where to start, speaking with a qualified financial planner or advisor can help turn uncertainty into action. While many Canadians still go it alone, research from firm Edward Jones found that Canadians were far more confident in their financial future working with a financial adviser versus handling their finances without one.
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Brett Surbey is a corporate paralegal with KMSC Law LLP and freelance writer who has written for Yahoo Finance Canada, Success Magazine, Publishers Weekly, U.S. News & World Report, Forbes Advisor and multiple academic journals. He and his family live in northern Alberta, Canada.
