Being an immigrant in a new country can be an intimidating experience. In addition to learning a new language (in some cases), you also have to adapt to a new culture and a new way of living. When immigrating to Canada, your previous financial history is unfortunately often also irrelevant. Here are some money management tips for a new Canadian citizen to help you settle into your life in a new country.
Establish a Credit Score
The first thing you’ll need to do is to establish a credit score. Life in Canada often revolves around credit; whether you’re buying a home, a car, or renting an apartment, you’re going to need a solid credit score to convince the bank to lend you money.
So how do you persuade lenders to give you money to establish a credit score if you need an established credit score in order to borrow money in the first place? Your best bet is to apply for one of two things: a secured credit card or a credit card that exists specifically for a new Canadian citizen.
Open a Bank Account (Checking and Savings)
Opening a bank account should be one of the first things you do as a new Canadian citizen upon arrival to Canada. At minimum, you’ll need a checking account (for your day to day transactions) and a savings account (to put aside money in case of emergency, to meet a savings goal you have [i.e. home ownership], or to help pay off any debt you might have accrued in the move.)
Figure Out Your Long Term Financial Goals and Plan Accordingly
Once you’ve got your basic bank accounts set up (credit card, checking, and savings) it’s a good idea to think about and start planning for your long term financial goals. A TFSA is a good multi-purpose long term savings option while an RRSP is specifically to help you save for retirement and an RESP is to help you save for post-secondary education (for yourself or your children). A TFSA is often the best place to start as you can put money away and withdraw from it without penalty (meaning you can choose to use those savings for whatever you’d like without the same restrictions that come with an RRSP or an RESP.) Make sure to speak with a bank teller and figure out which account meets your needs before committing to anything.
Stay on Top of your Finances
Once your accounts have been set up, it’s important to stay on top of them. This means paying your bills every month, keeping an eye out for any suspicious activity, and teaching your kids how to effectively manage their money as well.
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