So, you’re on the path to homeownership and already contributing to your Tax-Free Savings Account (TFSA). But now there’s a new player in the game: the First Home Savings Account (FHSA). It’s like bringing in a new superhero to help you save for that dream home. The question is, should you prioritize maxing out your TFSA or focus on the FHSA first? Let’s dive into this financial showdown.

First, let’s talk about what makes each of these accounts special. Your TFSA is like your trusty sidekick—its main ability is to let your money grow tax-free, whether from interest, dividends, or capital gains. You can withdraw from it whenever you want, and those withdrawals don’t affect your contribution room for the future. It’s flexible, it’s tax-efficient, and it’s perfect for a variety of savings goals.

Now, enter the FHSA, a shiny new addition that’s designed specifically for first-time homebuyers. It’s like the newest superhero in the universe, complete with its own unique powers. The FHSA allows you to save up to $40,000 tax-free specifically for buying your first home, and you can deduct your contributions from your taxable income. That means you get a tax break! Plus, if you keep your funds in the account long enough, you can enjoy tax-free growth on your investments.

So, which one should you prioritize? If you’re planning to buy a home soon—say, within the next five years—it might be wise to focus on maxing out the FHSA first. That’s because the tax benefits and the ability to withdraw the funds for your home purchase make it a compelling option. You want to maximize that $40,000 limit while it’s fresh, right? Think of it as your golden ticket to the home-buying lottery.

However, if your home-buying plans are several years down the line or if you’re already close to maxing out your TFSA, it might be a good idea to keep contributing to your TFSA. It’s like having a versatile tool in your financial toolbox—ideal for other savings goals, emergency funds, or retirement. Plus, the TFSA allows you to build a cushion for those unexpected expenses that pop up like a surprise sequel no one asked for.

To sum it up, consider your timeline. If the keys to your future home are just around the corner, the FHSA should be your priority. But if you’re in it for the long haul or want the flexibility that a TFSA provides, keep pumping up those contributions. Ultimately, both accounts can work together like a dynamic duo, helping you reach your ultimate goal of homeownership while maximizing your financial benefits along the way.