Finances for Newcomers in Canada

Between all your concerns as a newcomer, finances are usually one of the top priorities. Out of everything you’ll need to learn, one crucial piece of information should be a priority: learning the country’s financial system. Without this knowledge, it won’t be easy to understand the costs of basic necessities and the value of your money. Below, we’ve outlined some essential tips to help you manage your finances and prepare you for success in Canada.

Bank Account

Before you leave your home country, see if any banks operate both there and in Canada. When we moved, we did this, and within a couple of days in Canada, we had credit approved.

Having a bank account ready before you arrive can simplify many aspects of your transition. You can set up direct deposits for any income, start building your credit history, and access various banking services immediately. It's also helpful to familiarize yourself with the banking fees and services offered by the bank to ensure you choose the best options for your needs.

Here are some steps to consider:

• Research Banks: Look for international banks that have branches in both your home country and Canada. Some banks may offer special accounts for newcomers.

• Gather Required Documents: Typically, you will need your passport, immigration papers, and proof of address. Check with the bank for a complete list.

• Open an Account: If possible, open an account online before you arrive. If not, plan to visit a branch as soon as you land in Canada.

• Transfer Funds: Move your savings into your new Canadian account to avoid carrying large amounts of cash.

Required documents

Canadian banks generally require verification documents such as a visa/passport, immigration papers, your Social Insurance Number (SIN) if you have one, and address verification. If you don’t have an address yet, you may be able to give a reference in Canada. A temporary residency permit is often allowed as verification of immigration, along with Confirmation of Permanent Residence (COPR), or your work or study permit.

Costs

Keep in mind that many banks in Canada charge monthly fees in order to have a basic account. Do your research on what these fees are (many banks offer zero-fee accounts for newcomers for the first year) and what you can afford. There are also a few online banks that don’t have fees, but may offer less services, such as in-person branch support.

Download a Money Transfer App

You’ll likely want to send money back and forth to your home country. You should download a reputable money transfer app to make this as easy as possible. A safe money transfer service is cheaper and quicker than wire transfers at banks and brick-and-mortar stores. We have been using wise for a years and we have had a positive experience so far.

Make a Budget

Setting financial goals involves understanding your fixed expenses (costs that rarely change, such as rent and bills) and your discretionary expenses. Don’t forget to add money or bank transfer fees if you send a lot of money back home.

A good rule of thumb? When your paycheque arrives, try to save at least 10 percent – and allocate some of it toward retirement. Even if your employer offers you a pension or Registered Retirement Savings Plans (RRSPs), it’s always a good idea to have a plan of your own for retirement, too.

It’s also crucial that you set up an emergency fund and start putting aside money in this account. This money can be used to cover urgent issues such as your car breaking down, a period of unemployment, or anything else unexpected. These savings give you a sense of security and peace of mind of having a “Plan B,” just in case. It also helps free up your money mindset since you know you have a plan and can worry less about day-to-day financial survival.

Set Some Financial Goals

You likely already have some goals for moving to Canada, but do any of them involve finances? If not, it’s time to think of what you’ll do with your hard-earned cash for the next six months.

Start by identifying the financial goals you have for living in Canada. Do you want to own a home one day? Earn at least six figures? Save for your children’s education? Consider what’s more important to you so that you can direct your cash to the right places and get the motivation to continue saving. Reducing any impulse spending and putting it towards savings instead can help you meet your goals.

In Canada, there are plenty of resources to help you make smart money decisions. Read personal finance blogs, listen to podcasts and ask others for advice. Working with a certified credit counsellor is a great way to receive expert budget mentoring and financial education in your new country.

Start Building Credit

If you plan on getting a car loan, purchasing a home or renting an apartment, you’ll need to start building credit as soon as possible. Your credit score is a number that represents the creditworthiness of an individual – or a prediction of your credit behavior. It’s based on information from credit reports, ranging from 300 to 850. The higher the number, the better you look as a borrower to potential lenders.

Using a credit card responsibly is one easy way to start building credit. Other ways to build great credit include maintaining a low level of debt, limiting how often you apply for new bank and credit card accounts, and paying all bills on time.

If credit is new to you, don’t worry. It’s common practice to use them in Canada, but it is important to use it wisely.

Keep in mind that it may be difficult to get a credit card in Canada if you’re new to the country. Some banks may offer secured credit cards for newcomers, whereby you have to put the amount of the credit limit down in cash in order to qualify. This is a great, safe way to start building credit.

Conclusion

Building a new life in a new country takes commitment and determination. It also takes a keen understanding of the new country’s financial system. Making a solid financial plan and getting help when needed can help you succeed financially – no matter where you live.

For personalized guidance and assistance, feel free to contact us at Up Immigration. We are here to help you every step of the way.