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7 Financial Tips for Newcomers in Canada

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7 financial tips for newcomers in Canada

Overview

As a newcomer in Canada, you must navigate a variety of challenges, including a lack of familiarity with the economic system, culture, and customs of the new country. While it’s certainly challenging to achieve financial success in Canada, following these seven tips may help put you on the right path.

Tip #1: Open a Canadian Bank Account

The five major Canadian banks are Royal Bank of Canada (RBC), Bank of Montreal (BMO), Toronto-Dominion Bank (TD Bank), Bank of Nova Scotia (Scotiabank), and Canadian Imperial Bank of Commerce (CIBC). Choose the bank that resonates with you and open a chequing account for everyday transactions as well as a long-term savings account for long-term goals like purchasing a home or building a retirement nest egg.

Tip #2: Create a Budget

You may be unfamiliar with the cost of living in Canada, or it may have already come as a shock. One of the keys to surviving the cost-of-living crisis in Canada is effective budgeting. Track your monthly income and expenses and allocate a certain percentage of your income to fixed expenses, variable expenses, and savings and debt repayment. Ideally, you would save at least 10-15% of your income per month. If that is not possible, consider increasing your income or lowering your expenses. It may be possible to earn a raise or promotion at your current job or retrain for a new and more lucrative career such as software development or data science with the help of online courses, materials, and certifications, often available for a small fee or even for free!

Tip #3: Pay Your Bills on Time

Paying your bills on time is one of the biggest factors that can help improve your credit score and credit history. Consider automating your bill payments so that you don’t miss any payment due dates and always pay on time. The key here is making sure that you always have sufficient funds in your bank account to cover the most important transactions. If you consistently pay your bills on time and establish a sound credit history, it may give you access to better loan terms as well as help you qualify for a rental or a mortgage.

Tip #4: Understand the Job Market

One of the keys to thriving in Canada is navigating the job market effectively. Stay informed about the up-and-coming industries in Canada. Many lucrative jobs exist in finance, technology, and healthcare. Training or retraining for careers in those fields may help you land more lucrative and well-paying gigs. Jobs in retail, restaurants, and warehouses may come with lower pay and fewer benefits. Therefore, navigating the job market effectively and building the right credentials and experience can help you earn more money and enjoy better benefits. Be strategic about your career choices and invest in the right education and training. Getting your foot in the door may be the trickiest part, so make sure you offer the employers concrete evidence of your skills and abilities.

Tip #5: Build an Emergency Fund

An emergency fund is a must as it helps you weather storms like a sudden job loss or car repairs. Without an emergency fund, you may not be able to cover urgent expenses. The key to building an emergency fund is setting aside a small amount of money regularly. Even $20 saved every week would result in $1,000 saved over 50 weeks, which is enough to cover a variety of expenses. It would put you well ahead of many Canadians, as Statistics Canada reports that one in four Canadians cannot cover an unexpected expense of $500.

Tip #6: Set Goals

Without clear financial goals, you may tread water without making significant headway. It’s important to set clear and measurable goals, including savings goals, income goals, and so on. For example, you may wish to earn a certain income. Deciding on the amount of money you want to earn could help you reverse-engineer the careers that would offer you that type of income and the credentials and training you need to obtain to start that career. In a similar vein, having a clear savings goal could help you reverse-engineer the amount of money you need to be saving on a regular basis, which ties into your cashflow and income versus expenses. This, in turn, can help you determine the income you need to be earning or the expenses you need to eliminate or reduce.

Tip #7: Minimize Unnecessary Expenses

Lowering your expenses could free up funds to put toward savings or debt repayment. Review your expenses carefully and consider whether there are any alternatives that are more affordable. For example, instead of buying coffee at large coffee chains, you could save a few bucks and brew your own coffee at home. That small difference could result in considerable savings over the long term. You could opt out of useless subscription services or avoid unnecessary technology purchases such as buying a new phone to keep up with the Joneses. Remember, you’re running your own race, and social comparison only leads to detrimental outcomes. Do what’s right for you and spend money on things that will benefit you in the long run.

Conclusion

The cost-of-living crisis makes it challenging to cover everyday expenses, whether you’re a newcomer or have always lived in Canada. If you ever need help covering urgent expenses, consider applying for a personal loan online via Friendly Lender. We don’t check your credit score or credit report during our simple and straightforward online application process. Additionally, to monitor your credit health, consider signing up for Credit Verify. The registration process is quick and easy, and you will be able to monitor your credit score and automatically detect errors on your credit report.

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Why Friendly Lender?

At Friendly Lender, we understand the importance of securing loans with bad credit when you need them most. That’s why we have built a strong network of direct lenders across Canada to connect you with the right loan options. When you choose Friendly Lender, you benefit from the following advantages: