Financial planning for newcomers to Canada

Moving to Canada offers excellent opportunities for professional and personal growth and life experiences, but it also requires careful financial planning to avoid spending in one month the funds gathered over a year or more. 

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In today's blog, we want to share a comprehensive guide on the 8 best practices for financial planning that will go a long way in helping you live a comfortable quality of life in Canada while getting fully stabilized. Let's get started!

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Guide to the 8 best practices for financial planning in Canada

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We recommend that you save this publication so that you can review it whenever you need to as you get into the habit of these 8 practices.

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Practice 1: establish a budget before arriving in Canada, it sounds a bit strange, but it is just as it is from your home country. In a comfortable and focused place, start creating a detailed budget that includes these 4 elements:

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1. Fixed costs: take into account regular expenses such as rent, utilities and transportation. Here you can see the cost of living in the province of Ontario, for example, and then explore the rest of Canada.
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2. Financial goals: it is always important to set long-term goals, for example, to buy a house, continue with higher education or English and French studies and, why not, even start a business! 

Here in Canada it can be done, it's just a matter of planning your goals and executing them.
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3. Anticipated expenses: try to anticipate those daily and monthly expenses for food, household essentials and entertainment that should never be neglected. 

Remember that once you are away from home things change and your fellow students or co-workers will be in the same situation as you: setting aside their funds for your livelihood, so you have to be proactive from day one.
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4. Emergency fund: having savings for unexpected expenses is essential. Many people neglect this last element and get used to living from day to day, but this is not at all advisable. Imagine that a pipe breaks inside your house and you have to repair it immediately, or there is a medical complication and you have no money of your own, then you have to go through the uncomfortable moment of borrowing from other colleagues who may apply the best practices of financial planning and run the risk of not being able to help you. 

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In short, every newcomer to Canada should be cautious with his or her finances before landing.

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Do you already know in which specific area of Canada you are going to live and study? Here you can take a tour of the different provinces.

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Do this every 6 months: regularly track and adjust your spending habits to make sure you are in line with your financial goals. Reviewing your budget every 6 months can help you align your plans for upcoming purchases and extra payments, such as a new subscription, an increase in income, among others.

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Practice 2: Build and maintain a good credit history. In Canada, it is crucial to have a solid credit history, and you can do that even before you arrive in the country. Newcomers who have planned their credit history are able to access financial services and interest rates from their bank, and can even look into setting up a new bank account with other entities in the province where they live. Immiland offers this support service and you can ask us for a free quote; likewise, here's how to build and maintain a good credit history in 4 steps:

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1. Start with opening a bank account in Canada: having a savings account with your money available is an important step for you to deposit your funds from the moment your visa is approved or from the moment you arrive in Canada, then you can apply for a credit card with a low initial amount so that through it you can build your Canadian credit record. At Immiland, we have banking allies with benefits for our clients. See allied banks, CIBC, Dejardins and Simplii.

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2. Open a GIC (Guaranteed Investment Certificate) account. We also facilitate your GIC account opening for the Student Direct Stream program. This type of account is a prerequisite for express visa processes. At Immiland, we recommend using it as often as necessary, but responsibly, making small purchases and paying the balance in full each month. Contact a settlement advisor for your GIC account.
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3. Make timely payments on your bills: paying all your bills on time is more than essential to avoid accumulating debts, including utilities, rent and payments for new purchases such as furniture, appliances, later on, vehicle, among others. At Immiland, we recommend setting up payments on a pre-authorized basis to avoid missing due dates.
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4. Keep balances low: This means avoid maxing out your credit cards. In fact, keeping your balance below 30% of your credit limit can positively impact your credit score.

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Do you know how to get your money from your home country to Canada? Find out in this video.

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5. Regularly monitor your credit report. This review is done to look for possible errors or fraudulent activity, so you can take action on your situation and plan how to improve it. You can find credit bureaus on the web that will help you do this analysis.

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6. Understand the terms and conditions of your contract. Whatever contract you sign, always make sure you read and understand the terms and conditions it sets out, including those for cell phones, insurance policies, banking products and rental agreements. Failure to comply with these terms can result in penalties and unexpected expenses, so allow yourself time to make informed decisions and avoid being pressured into agreeing to deals.

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Practice 3: Manage your credit card debt wisely. As we mentioned before, with your card you will be creating credit history, however, if not used correctly, it can go from being a useful tool to a financial burden. Follow these 3 steps for its proper use:

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1. Pay balances monthly: Try to pay your credit card balance in full each month to avoid interest charges.
2. Limit the number of cards: one or two credit cards are enough, and use them only for essential expenses.
3. Avoid late payments: set up reminders or automate payments to ensure you never miss a payment.

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So far there are three important practices, it is advisable to take note of your own financial behavior so that you can stop and evaluate the points for and against which you need to improve. The following practice is mandatory in Canada!

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Practice 4: file your taxes on time. In Canada, it is mandatory to filetaxes and it is important to have a Social Insurance Number (SIN). Filing your taxes on time ensures that you receive any eligible government benefits and avoid penalties or interest charges. 

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Practice 5: Plan your moving expenses. International moves can be expensive, so budget for all the costs involved, from packing to unloading at your new home, including these 4 payments:

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1. Shipping: costs to transport your belongings.
2. Insurance: coverage for your belongings during the move.
3. Duties and taxes: possible customs tariffs.
4. Visa fees: costs associated with obtaining your visa.

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An accurate budget for these expenses is essential and ensures a smooth transition to your new life in Canada. Feel free to use Excel spreadsheet or Google Sheets to make a personalized budget, although there are other applications as well, the important thing is to keep a written record of your income and expenses. Let's continue.

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Practice 6: Seek professional financial advice. Faced with uncertainty because you know you will be arriving in an unfamiliar country that is very different from your own, seek help from the right people to manage your finances. Remember that your lifelong friends are not here, neither are your acquaintances, so it is preferable that you get well informed about the complete financial planning services and multilingual support that will improve the economic transition of any move. See our financial advice plan for a successful budget.

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Practice 7: Obtain health insurance. Although Canada's health care system is publicly funded, there may be a waiting period before you are eligible for provincial health insurance. If it is within your reach to have private health insurance during this time, you should consider it. At Immiland, we recommend keeping your insurance in your home country even if you have arrived in Canada because you never know what medical event may occur and may not be covered in this country.

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Practice 8: Learn about government programs for permanent residents. It is very important that from your home country you have read about these programs and their benefits for newcomers, so you will be familiar when you start making your life here. Programs such as the Canada Child Benefit (CCB), Employment Insurance (EI) and the Canada Pension Plan (CPP) can provide financial support when needed. Did you know that the Canadian government pays for having children? View supplementary video .

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That's as far as I'll go with you for today. I hope you can apply these 8 practices. If you would like to learn more about our immigrant services, please do not hesitate to contact us by clicking here. Thank you for reading us. Don't miss our next blog with more information about living in Canada.

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With love,

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Immiland