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My work contract is expiring. What money moves should I make now?

Nancy Woods, adviser with RBC

Deborah Baic/The Globe and Mail

Dear Nancy Woods,

I'm finishing up the last year of my two-year contract at work. I make a fairly good wage ($60,000/year) considering my age (23) and having just graduated from university in 2011; I consider myself very lucky. I have started an RRSP, depositing $200/month, a TFSA, depositing roughly the same and recently applied for a line of credit (haven't touched it) but opened it for the awaited emergency of having zero income when my contract ends (if I don't find a job immediately).

My question is, how can I make the best of this income in only one year? Am I making the right decisions so far?

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Signed Krista

Dear Krista,

It sounds like you are making the right decisions to start saving at an early age. The power of compounding will certainly work in your favour in the long run. If you have to stop contributing to your RSP for a while, at least you have a starting pool of assets to grow over the years. Starting early is definitely the key.

How much of your income is left over each month? Can you afford to put away more into your TFSA?  For you right now that would be an option for depositing your emergency funds. The benefit is that you can withdraw the funds without any tax implications if you don't find a job right away when your contract ends.

The more you can sock away within the limits of your TFSA, the less chance you would have to use your line of credit.



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Nancy Woods, CIM, FCSI is an Associate Portfolio Manager and Investment Advisor with RBC Dominion Securities Inc.  To subscribe to her newsletter, visit her website  To ask her a question, send an email to

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About the Author

Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. More


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