While immigration to Canada, you are likely to experience unique changes–some good and some unusual. And one of them is managing your finances. Earning money abroad is one thing and managing the same is quite another.
However, it is quite challenging to move to a new country and learn about the financial system. There is no way to find immediate information about financial moves you should be doing. We are familiar with this because we have been there. And that’s why we have come up with this blog.
Here is a rundown of important financial management tips for a new immigrant to set yourself for success in Canada. These tips will help you learn how the financial system works in Canada and how to leverage it to make money. Let’s get started.
Get to Know the Canadian Banks:
Canada houses five major banks and some smaller community banks, credit unions, and online banks.
When you are choosing a bank as a new immigrant to Canada, make sure to choose the one for your financial needs.
You will also want to go through the details and fees of the bank accounts that you choose to open to avoid overpaying in monthly fees and transactional fees. Generally, the two most common types are savings account and checking account.
You can open a checking account for your routine transactions. A saving account is great for the funds you would like to set aside for the things you need in the future.
Choose Credit Card Wisely:
With credit cards, you get access to easy borrowing. Managing your credit card efficiently will help you a lot in the Canadian economy.
While a credit card can help you in a financial emergency, it can also put you into debt if used carelessly. Knowing this, newcomers are recommended to stay vigilant and aware of the odd of having to get into unnecessary debts.
Here are some factors to consider before opting for a credit card:
- Why do you need a credit card for?
- How frequently do you need them?
- What rate, features, or options in credit cards are right for you?
- Have you read the terms and conditions?
Identify Your Essential Expenses:
The essential or routine expenses are inevitable such as house rent, food, health care, transportation, child care, and debt payment. Having a good sense of essential expenses is important.
For example, identifying your monthly expense lets you know how much money do you need to find a way to earn to survive. Secondly, it helps you manage extra money. If you can make more than the total of your fixed expenses, you can know exactly how much you have leftover.
Work Towards Short-Term Savings:
They say that save money for rainy days. You never know when a financial emergency can occur and you have no money to deal with it. Therefore, set some money aside for unexpected crises.
Personal finance experts generally recommend creating an emergency fund amount equal to about six months of expenses. So if you and your family need CSD 3,000 a month to survive, you should have CSD 18,000 in a bank account for emergencies. this emergency fund gives you a cushion in case you lose your job or have other emergencies.
Prepare For Canadian Income Tax and Deductions:
If you are working in Canada or thinking to work after immigration to Canada then income might be different from what you got in your native country. That’s why it is important to keep track of taxes on your income. There are several deductions imposed on your income depending on where you live. Some of the common deductions are Canada Pension Plan (or Quebec Pension Plan if you live in Quebec), Employment Insurances, and federal and provincial income taxes.
Household money management
You need to figure out how to manage your money after you find out where to open an account and choose a financial institution: budgeting, investing, and paying for the things you need.
It’s critically critical for any newcomer to Canada to learn how to manage and budget their money. This is to make use of the investment options available to them in Canada. A TFSA, for instance, is not the only option available as there are RRSPs and RESPs as well.
Small initial investments can help you achieve your financial goals, and your financial future can be secured with time. As soon as you have settled in Canada, you should start investing and create a savings plan in order to increase your chances of success.
You may receive numerous financial ads on social media, which may not always be accurate when you are new to Canada. To help newcomers, we encourage them to use trusted sources such as family, friends, and their financial advisors to verify information they have read online. Financial advisors available at your bank can help you understand your finances better and you are not obligated to follow their recommendations.
If you are planning to study in Canada and but confused how to start, where to start then Landmark Immigration can help you to do that, Contact them here