Moving to a new country tends to be a challenging, tumultuous time that involves a lot of learning. Routines are disrupted and remade, new connections are forged, and a whole lot of discovery happens as your new home slowly starts to feel familiar.
Amid all the other upheaval that comes with adapting to new surroundings, an essential aspect of integration for newcomers to any country is being able to comfortably and capably manage their finances.
If you’re a recent immigrant to Canada, chances are you have some questions about what financial planning steps to take as you start to establish yourself here. Put yourself on the path to comfort and competence with financial planning in Canada with this breakdown of financial basics that newcomers need to know.
Find a new financial institution
One of the first things you’ll want to do after arriving in Canada is to become a customer of a financial institution, giving you access to a range of financial products and services. You’ll probably want access to a chequing account to handle bills for utilities, rent, or other regular costs, as well as a debit card for day-to-day purchases.
Canadian banks are typically stable and safe, meaning there’s little reason to worry about the safety of deposits. An additional level of security is government-backed insurance that protects client deposits, either in full or up to $100,000.
Eligible deposits (not in registered accounts) with Ontario Credit Unions are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). Eligible deposits in registered accounts have unlimited coverage through the Financial Services Regulatory Authority (FSRA).
Canada’s big banks often have multilingual staff and may be able to serve clients in a language they’re more comfortable speaking. Some credit unions, meanwhile, are loosely affiliated with immigrant communities from different ethnic backgrounds, which often helps attract new customers from those countries or regions. Beyond language familiarity, these institutions also offer a conduit to a broader community of expats who can offer connections and support.
Establish good credit
One important thing you’ll want to do upon moving to a new country is demonstrate to lenders that you’re a reliable, trustworthy borrower. In most cases, whatever credit history you established in your old home cannot be transferred here, and you’ll have to build your credit score by paying bills in full and on time.
You can build good credit by managing a credit card, a personal loan, or even a monthly bill from a cell phone provider. The more reliable a borrower you prove yourself to be, the better you’ll be treated by lenders and the less you’ll have to pay to borrow money.
Start saving and investing
As soon as you can after arriving in Canada, you’ll want to start putting money aside for the future. Whether you’re building an emergency fund to see you through tough times, saving for your children’s post-secondary education, or securing the financial stability of your retirement years, there are plenty of good reasons to start saving.
Talk to someone at your financial institution, or a trusted friend or mentor, to learn more about options to help boost your savings totals, whether it’s with the tax breaks that come with contributing to a Registered Retirement Savings Plan (RRSP), using the Canada Education Savings Grant to grow your child’s education savings, or taking advantage of the tax-sheltering available with a Tax-Free Savings Account (TFSA). An understanding of the options is essential for maximizing your hard-earned savings.
Be vigilant about attempted scammers
Financial scammers like to prey on people who aren’t well-equipped to detect the fraud. Unfortunately, newcomers fit the bill, given that many arrive without a deep knowledge of the financial landscape. If you’re relatively new to Canada (and, frankly, even if you’re not), it’s wise to be aware of the potential for fraud, whether it’s through identity theft, a phishing scam attempt, or something else.
Never disclose passwords over the phone or online, and change your passwords periodically to keep them fresh. Be cautious when clicking on links in emails or when answering phone calls. If someone calls and claims you owe money, perhaps even to the government, call the agency or organization yourself to confirm before giving out any financial details or agreeing to make payments.