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By Jason Heath, CFP on May 12, 2025
Estimated reading time: 5 minutes

By Jason Heath, CFP on May 12, 2025
Estimated reading time: 5 minutes

If you want to start investing but you’ve got a Canada Student Loan or other student debt to repay, here’s how to decide where to put your money.

Recent graduates and other young people face competing financial priorities. Once you join the workforce, it’s understandable if you want to shed the student lifestyle and live a little. But at some point, you’ll need to decide what to do with extra cash flow: invest or pay back student loans. Like many things in personal finance, it depends on your situation—including what type of student loans you have.

The financial industry spends a lot more time talking about investing than debt repayment, so that can be an enticement to start building an investment portfolio. Investing has become more gamified as well, and many young people know someone—perhaps indirectly through social media—who has made it rich investing in meme stocks, cryptocurrencies or NFTs. This can lead to a fear of missing out.

The truth is that most investors make money slowly over time, and even the professionals have a tough time keeping pace with stock market returns, let alone beating the market. As a result, it can pay to take a long-term approach when deciding between investing and debt repayment and choose what works best for your situation.

One of the goals of financial planning is to build your net worth. Your net worth is calculated by taking your assets and subtracting your liabilities. When you are young, sometimes this formula results in a negative net worth. But whether you build your assets or reduce your liabilities, both increase your net worth. And both are good to do financially. Which is better for you depends on a few factors.

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