Diana says...
Beg, borrow or scrimp to open up a Tax-Free Savings Account (TFSA), which was introduced by the federal government earlier this year. It’s widely considered by financial advisors as the best savings vehicle that’s been introduced in Canada in decades, and the account can be as flexible as you want it to be. You’re allowed to invest up to $5,000 a year, and no matter how much your investment grows—or shrinks—you can withdraw the funds tax-free. Unlike Registered Retirement Savings Plans (RRSPs), the money withdrawn from a TFSA is not considered taxable income.

Diana Cawfield is an award-winning financial writer with more than 10 years experience. Send her your questions here.