Is $20,000 Canadian A Lot Of Money?


The title of this post is a Google search term someone used to find my blog. I thought it was a good question. $20,000 of cash is a pretty solid savings milestone in your 20’s, and might make you feel like you have a lot of money. But what is a lot of money exactly? The value of money lies in what it can buy for you.


What $20,000 Canadian can buy you:

3.58 years of university

The cost of post-secondary varies widely by province, but the average university tuition in Canada is $5,581 as of this year. This means that if you have $20,000 lying around, you might only have to fork up tuition for your last semester of university. So is $20,000 a lot of money? It depends what you’re studying.

5.2% down on a home

House prices vary by region, but the average house price in Canada is $387,147. You really should save up at least 20% to put down on a home and account for additional closing costs, so set your savings goal at $80,000. So no, $20,000 is not a lot of money, but it’s a good start.

If you’re 25, $147,168 at retirement

using ING Direct’s saving calculator, putting $20,000 away at 25 at an average rate of 5% will yield over $120,000 in interest in 40 years, giving you $147,168. Yes, that’s a lot of money.

Almost a new car

The average new car price in Canada is $26,755 so $20,000 would almost let you pay in full. I suggest you choose a cheaper car, buy used, or make use of public transit. Personally I haven’t owned a car for 8 years. $20,000 on a new car might actually be the worst of this entire list to spend your money.

A latte from Starbucks every day for 11 years

At $5 a pop, lattes get a lot of criticism. There’s even an entire chapter in The Automatic Millionaire: (essential reading in the personal finance community as far as word on the street goes) about how you’re frittering your financial security away on mochas and pumpkin spice slices of heaven. $20,000 is a lot of lattes, and that’s all I’m going to say about that.

About 160,000 timbits

Because you’re Canadian, and you would buy that.

So is $20,000 a lot of money? What would you do with that much cash? 


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18 Comments. Leave new

  • Well, it’s not lots of money in terms of what you can buy with it today but it certainly will give anyone a kickstart in the right direction. Any amount of money is better than nothing at all. I think that what one person sees as lots of money another may see differently depending on their financial situation as well. Great post.

  • On one hand, it is a fair bit of cash, but on the other hand if someone handed me 20 grand I don’t think it would make a big difference in my life. I’d just put it in the bank and probably use it to buy a car when mine bites the dust. Maybe I would go on an extra vacation. In any case, it wouldn’t be life-changing, but it would still be nice!

  • Oh wow, I had no idea that the average cost of a house was so high! But I guess I live in one of the communities that falls on the low end. (I just looked it up and it’s apparently just under $200k here. Still higher than I thought!)

    If I had that much handed to me right now, I’d have to do a little math, but it would likely end up in a a combination of a high interest savings account for a while, I’d open an RRSP, and I’d pay off the rest of my car to eliminate that debt. Sadly, it wouldn’t be enough to even cover half of my student loan… (but that’s interest free, hence why the car would come first).

    And lets be honest, I’d probably use a max. of $2000 to take at least one big trip. I have friends currently living in England, so I’d hopefully go see them!

  • Is $20,000 a lot of money. Excellent question! I think it also depends on your socioeconomic status. To me, $20,000 seems like a lot, even if it doesn’t buy all that much. I can’t wait until I can say that I have that much in savings.

  • Finding an extra $20,000 would be nice to have. I would invest it! 🙂

  • That would be a nice amount to have. You could really do a lot with that if you are smart and know what you are doing.

  • We would use that’s money to continue destroying my wife’s student loan debt! It would knock out a pretty decent chunk of it too!

  • *sigh – day dreaming* I’d probably take $1k and set it aside for a kitchen table, some curtains, a pair of jeans and other odds and ends. I’d put $4k into my TFSA, and the remaining $15k into my RRSP. Post tax season I’d take the income tax return from the RRSP money and put that into the TFSA as well.

    One can dream.

  • *Googles timbits* You crazy Canadians 🙂

  • “About 160,000” timbits. This sentence just made my day lol

  • I should’ve went to college in Canada. $20,000 only would pay 60% of my tuition from undergrad.

  • In my country that would be a lot of money. I’d probably save it and think about ways to also invest. We don’t have any ‘needs’ that would be covered, so this would help us really get our savings way up.

  • Really good post, i liked the comparison of how far 20k goes in different situations.

  • I had Tim hortons for the first time while I was in Ireland. They had one inside a gas station. I must say they were delicious!

    As far as 20k, I would invest it… Problem into 2 to 3 individual stocks because I enjoy risk and researching individual stocks.

  • 20K in cash (aka a bank account) is a lot. But when you start spending it… it’s not a lot.
    Loved the Tims bit

  • Probably max out my ROTH IRAs, and go on vacation!


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