If for anything you thought of moving to Canada or have moved to Canada, getting your finances on track will help you stabilize during your first years in Canada. There are basic amenities that are required of you to handle.
Things like paying rent, getting a debit card and a credit card, transferring money, depositing cheques, buying groceries, and other basic necessities.
One of the main challenges that immigrants will have to face is learning to adapt to unfamiliar financial territory. Banking, investments, and maximizing savings will carry special import for newcomers who will need to be financially healthy to better manage their lives and truly thrive in a new country.
To help better navigate the economic challenges that many immigrants will grapple with, we’ve compiled a comprehensive financial guide that will assist new Canadians in better managing all aspects of their personal finances.
However, we recommend you apply the following rules below to get acquainted with the Canadian economy and how to maneuver the financial waters you are embarking on.
Know the Canadian Banks
Canada has five major banks and smaller community banks, online banks, and credit unions. When you are choosing a bank as a newcomer, you need to consider what your specific financial needs are.
If you will be receiving frequent cheques from your home country, you will most likely want to choose a bank that has branches near you.
But you’ll also want to look at the details and fees of the bank accounts that you choose to open so that you don’t end up paying more than you need to in monthly fees and transactional fees. The two most common types are ‘chequing account’ and ‘savings account.’
You might decide to open a chequing account for your day-to-day transactions or deposit your paycheques. A savings account is ideal for funds that you don’t need access to on a daily basis and may be the right option for setting money aside for things you may need in the future.
Use of Credit Cards
A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company, that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.
Credit cards impose the condition that cardholders pay back the borrowed money, plus any applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time.
Credit cards give you access to convenient and easy borrowing which when not carefully managed can tie down the user into indebtedness that continues to grow. Managing your credit cards efficiently will help put you on a good path in an economy like the Canadians.
Having a credit card does not signify luxury, it is a necessity as this helps you to move around cashless and pay for stuff from the vendors. However, if not properly managed/controlled you can run into debt.
Knowing this, newcomers are advised to be vigilant and aware of the possibility of having to incur unnecessary debts. What is important is that you determine from the start that you will be in complete control of your credit cards and not the other way around. There are factors you are to consider before venturing into the credit card line of finance.
- Determine what you need the credit card for – do you want to use the card for smaller purchases or larger ones.;
- Determine how frequently you are likely to use them;
- Also, you need to know your needs for the right credit card with the features, rates, and options that work for you;
- Make extensive research on the type of credit card you will be making use of;
- Understand the terms and conditions of the card before getting it, so as to avoid paying large sums for a card you might not be using often.
Things to look out for when selecting a card;
• Credit limit;
• Annual fee;
• Minimum payment amount and date;
• Additional fees and penalties.
Now that you know a little about the Canadian financial system, you should know how to plan your finances so you do not go into debt.
Immigrants should always have 50% of their salary for their essential expenses. In addition, save for the unexpected by keeping 5% of salary in short-term savings for unplanned expenses. Also, try to save 15% of pre-tax income (including employer contributions) for retirement.
