I'm a Canadian software engineer who works in the United States. Thanks to having more than half of my tuition paid for by my parents, I've walked into having more money than I need. Thus I've had to learn how to manage my finances, using the financial tools available in Canada and the US.
For others in a similar same boat, I thought it might be helpful to share my simple approach to finances as someone looking to achieve financial stability as soon as possible, with a limited tolerance for risk, and a likeness for having fun.
I bucket money into savings and spending. Any money that is not reserved for spending is savings.
Spending
Spending money is money I anticipate spending within the next 8 months. Every four months I estimate what I expect to spend, assuming everything costs more than I predict, and then add a buffer of $5000 CAD. My goal is to reach a number I will not exceed, even in the least conservative and most unexpected circumstances.
Savings
Savings is a void where money goes to disappear from existence. Once money is in savings, as far as I'm concerned it no longer exists and cannot be spent. Money does not get taken out of savings.
Savings
Canadians, 18 and older, can create a TFSA or RRSP which are tax-advantaged accounts with capped contributions.
Money put into a TFSA is taxable income, but capital gains on that money is not taxed. Money put into an RRSP is not taxable income, but withdrawals are taxed.
Capital Gains: the realized profit from an investment.
Think: buy Apple at $5 and sell at $100. Capital gains is the $95 of profit.
I put savings into my TFSA, managed through Questrade [2], until my contribution limit is reached. The logic is that the longer I have the money invested (more on this later) the more capital gains that won't be taxed.
The remaining CAD savings are put into my Canadian brokerage account, managed through Questrade, and remaining USD savings are put into my US brokerage account, managed through Robinhood [1].
I purchase ETFs that track either the S&P 500 or NASDAQ with the money in my brokerage accounts. For CAD, I buy Blackrock products on the TSX. For USD, I buy Vanguard products on the NYSE. These equities are volatile but since I am a long-term holder it is volatility I can manage. Since inception, the NASDAQ and S&P 500 have had average annual returns of 10.15% and 10.7%, respectively. The NASDAQ is less diversified and viewed as being more volatile than the S&P 500.
I put some money into individual stocks 2-3 years ago, but I avoid doing that now. My portfolio is over 95% NASDAQ and S&P 500 ETFs.
Since I'm a long-term holder, investing lump-sum (all in one go) is favored over dollar-cost averaging, where you periodically make smaller investments - think "buy X shares every Y days".
I was initially dollar-cost averaging to avoid "timing the market" but, counter to my intuition, lump-sum is typically more rewarding for long-term investors, so I pivoted.
Spending
Spending money is put into high-interest savings accounts. It can be withdrawn at any time and will not be impacted by market volatility. For CAD, I use EQBank which offers a 2.25% annual interest rate. For USD, I use Robinhood Gold which is a $5 monthly subscription that offers 5% annually (and occasionally 5.5% with a 1% match on deposits, which is pretty snazzy).
I spend money with a credit card and then pay the bill with my high-interest savings account. For USD, I use the Robinhood Gold Credit Card which has (among other perks) 3% cashback on all purchases.
The worst is to lose all your money in the market. The second worst is to let your money sit in an account that doesn't pay any interest.
My approach is better than doing nothing and better than actively crippling myself by making dumb investments. There are certainly more things I could do: strict budgeting, actively seeking out great deals, Norbert's Gambit, reducing my tax liability, etc. My approach now is simple and it requires virtually zero activity on my part - that's why I like it.
I'm not trying to be a personal finance guru; I'm just min-maxing my finances.
Tracking Spending: Monarch [3] - best alternative to Mint (discontinued) I've found.
Currency Exchange: Wise.
Accounts: Questrade, Robinhood [4], EQBank.
Credit Card: Robinhood Gold Card.
Not financial advice :D
If you're looking for a book, I've enjoyed The Psychology of Money by Morgan Housel.
[1] Robinhood was the only provider I could find that offered HISAs without requiring a US permanent address.
[2] In Canada, your choices are between Wealthsimple and Questrade (there are others too, but they are lesser known). A friend recommended Questrade so I use that. I've heard good things about Wealthsimple.
[3] Robinhood referral link: https://join.robinhood.com/devinl-b115a6f
[4] Monarch referral link: https://www.monarchmoney.com/referral/b1n4t4zw3c