Setting savings and investment goals

From: Financial Consumer Agency of Canada

Think about your financial goals

Saving and investing can help you reach your financial goals. Writing goals down is a good idea.

To figure out what savings and investments are right for you:

  • identify and prioritize your goals, such as saving for retirement or a down payment for a house
  • set a dollar amount for each goal
  • set a timeframe to reach your goals

As you get older, your financial goals will change. Review your savings and investing plans from time to time.

Keep in mind you're generally better off paying down debt first. This is because the interest you pay on debt is usually more than what you can earn by investing.

To help you get started, fill out the investment goals worksheet.

Get tips on managing your debt and making a plan to be debt free.

Set a date to reach your goals

Your goals may be:

  • short-term (2 years or less)
  • medium-term (3 to 5 years)
  • long-term (6 years or more)

The amount of time you have to achieve your goals can affect how you plan to save and invest.

Save and invest for the short term

If you're saving for an emergency fund or a major purchase within a year or two, your focus will be on building your savings. You'll want to keep your money protected and easily accessible.

Short-term savings and investment options

  • savings accounts
  • short-term deposits
  • short-term guaranteed investment certificates (GICs)
  • cashable savings bonds

Ask your financial institution or advisor about the different types of short-term investments they offer and how they work.

Save and invest for the long term

If you’re putting money away for a long-term goal, such as your retirement or your child's education, you may want to consider a broader range of investment types.

Longer-term investment options

  • bonds, such as Canada Savings Bonds
  • mutual funds
  • index-linked deposits
  • stocks
  • long-term deposits
  • long-term guaranteed investment certificates (GICs)

Keep in mind that some investments are complex and can be risky. Talk to an investment professional or financial advisor to find the investment that is right for you.

Longer-term savings options

  • Registered retirement savings plans (RRSPs)
  • Registered education savings plans (RESPs)
  • Registered disability savings plans (RDSPs)
  • Tax-free savings accounts (TFSAs)

Figure out your comfort with risk

Many investments offer the potential for a higher rate of return but also involve some level of risk. However, the risk may be more acceptable if your goal is longer-term because you have more time to recover any financial losses.

Your comfort with risk depends on your emotional willingness to accept risk and your financial ability to absorb loss. This is known as your risk tolerance or risk appetite.

There are many different types of risk including:

  • the risk that your investments will lose money if domestic or global markets decline
  • the risk that an investment cannot be traded quickly enough to prevent a loss
  • the risk that the value of your investments won’t increase enough to keep up with the rate of inflation
  • the risk associated with investing in certain types of businesses, like a business that is part of an unregulated industry

More risk may be acceptable if your goal is longer-term because you have more time to recover any financial losses.

Decide if you want to invest on your own

Investing on your own may be an option if you:

  • are confident about your investing knowledge
  • have the time to follow developments in the financial market

Many people work with a financial advisor or planner to help them plan and achieve their financial goals.

​​Related links

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: