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Health savings account

Health care costs represent some of the biggest expenses that could come your way. If you work part-time, are enrolled as a student, or lack great insurance, establishing a health savings account (HSA) should be a top priority.

This tax-free savings account not only helps you manage health care costs in the short term, but also contributes to reaching long-term goals as well. If you’re registered for an insurance program, the HSA can cover any shortfalls.

Whatever you invest in your HSA comes off your deductible income, as with other tax-free programs. Then any withdrawals for medical needs are tax free, as are all withdrawals after you turn 65.

The riches of a Roth IRA

Like the HSA, the Roth individual retirement account (IRA) allows you to leverage tax advantages. You can withdraw your cash tax free any time after age 59 and a half.

The key to the Roth IRA, or any retirement account, is to start investing as early as possible, as the magic of compound interest grows the investment. Your annual contribution limit is $6,000, unless you’re over 50 (in which case it’s $7,000).

As you reinvest your returns, dividends and interest, your funds will multiply rather than merely add up. Retirement calculators like this one can help you determine how much you’ll get based on factors like annual contribution, length of time investing and anticipated annual percentage growth.

Read more: Here's how much money the average middle-class American household makes — how do you stack up?

Do the side hustle

If you’re thinking long term, you may also wonder about how to increase your income right now. That’s where for many, the side hustle comes in; driving for ride-hailing companies or selling merchandise online rank among the most popular. But let’s be clear: There’s the side hustle, and then there’s a part-time job — and the two are not the same.

If a side hustle prevents you from performing your full-time job at peak performance, that’s in reality a part-time job. And if the full-time job provides you with insurance, benefits and more, risking its loss because of a side hustle isn’t worth it.

The key is to find easy ways to create cash and if it involves passive income, so much the better. Indeed, the best types are often the laziest options. Can you rent out something, like a prime parking space? Working with that, a storage unit in your apartment, or even a shed out back could net you hundreds of dollars a month.

On the creative side, there’s nothing like turning a passion into cash. That might involve editing work, creative writing for blogs, or starting a podcast and finding sponsors: It’s the same amount of work to create a podcast for one paid sponsor as it is for three.

Etsy is an excellent platform for marketing crafts online and Bandcamp allows you to sell music downloads you may already have recorded. As in arts, generating income from it demands some creativity as well. Turning anything you love making into earnings is a smart way to pocket cash without jeopardizing your day job.

No matter which routes you pursue, you can also leave open the option of switching jobs, a viable one give the record low unemployment in the U.S. A higher salary, better retirement benefits: It could just feel like a full-time job and a side hustle all in one, the financial equivalent of filling your tank with premium.

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Amy Legate-Wolfe Freelance contributor

Amy Legate-Wolfe is an experienced personal finance writer and journalist. She has a Bachelor of Arts in History from the University of Toronto, a Freelance Writing Certificate in Journalism from the University of Toronto Schools, and a Master of Arts in Journalism from Western University. Amy has worked for Huffington Post, CTVNews.ca, CBC, Motley Fool Canada, and Financial Post. She is skilled at analyzing trends and creating content for digital and print platforms. In her free time, Amy enjoys reading and watching British dramas on BritBox. She is a mother and dog-mom to a Wheaten Terrier.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.