Money Mistakes to Avoid as A Newcomer in Canada

Everyone who has decided to move to a new country should know that even with all the fun and games, moving to a new country has difficulties, particularly regarding your financial future in this new home. As an immigrant from Nigeria, I know the financial system in Canada is totally different from the one back home Many Newcomers in Canada sometimes didn’t know this before immigrating here. Below are some important tips that can help you manage your resources well as you reside in your new home.

Money Mistakes to Avoid as A Newcomer in Canada

1. Lack of Successful Budgeting

A definite mistake newcomers make is not setting a budget. Budgeting is a way of managing income and expenditures since the common adage that ‘out of sight, out of mind’ does not apply when it comes to spending. You can get my free budget template to help you get started with budgeting. First, draw up your income and expenditure: sources of income, including salary, dividends, rental, etc.; expenditure, such as house rent, food, transport, entertainment, etc. In this way, you can see where your cash is being spent and possibly identify sectors where you can cut down on your expenditure. I have created a simplified monthly budget spreadsheet to help you take control and manage your finances.

2. Overusing Credit Cards

Credit cards are convenient but dangerous if they are not managed properly. This means that one may overuse their credit, so one should exercise much caution when using the card. To minimize interest charges, clear your account balance monthly to the penny. If you cannot make the full payment, try to make a payment higher than the ‘Minimum Amount Due.’ Check out Neo Cashback Credit card to earn up 15% cashback and no annual fees

maintaining credit history

3. No Building A Credit History

Even though you should avoid dependence on credit cards, it is also advisable to establish a sound credit history in Canada. With free online tools like Borrowell or ClearScore, you can monitor your credit score and get a credit report. Your credit history will influence your chances of borrowing a loan, renting an apartment, or getting a job. First, get a credit card with a small line of credit and make small purchases that can easily be paid off. One should always pay their bills on time to enhance their credit history.

4. Ignoring Financial Education

Many people migrating to Canada do not bother to familiarize themselves with the Canadian financial system. Knowing how banking operates and taxes and credits in Canada is essential. People must seek free services like workshops, online classes, personal finance YouTube channel, and community centers that provide financial literacy. Knowledge is power, so the more you know, the better you handle money.

5. Lack of Emergency Saving

Life is unpredictable, and it is always possible that one may be faced with an emergency that requires some cash. However, if one has no emergency fund, this is likely to strain them financially. The ideal emergency fund should be anywhere from 3 to 6 months’ living expenses. You can park your cash or savings in a high interest savings account for added return – EQ Bank High Interest Savings offers 4% interest rate. If you can save only $10 or $20 monthly, it will form a solid sum that will help out sometimes in the middle of the month. Download my free savings planner to save from $1,000 to $100,000 in a year.

Avoid These Money Mistakes in Canada

6. Overlooking Health Insurance

Canada has free health care, but it is not entirely free as it does not cover everything. Supplemental insurance may be necessary for dental, prescription drugs, and vision care. Find out what is and is not included in your provincial plan, and you might need to buy private health insurance.

7. Lack of Planning for Retirement

It is always hard to consider retirement, but it is never too early to start preparing. Utilize formal retirement saving schemes such as the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA). They are effective in providing the benefits of tax credits and can also help establish a secure future.

8. Underestimating the Cost of Living

Living costs in Canada may also be slightly higher than the living standard in your home country. This means determining how much you will need to spend on housing, utilities, travelling and food once you move to the new city. It will also assist you in setting the right budget and keeping an eye on any extra expense that is likely to come up.

9. Not Taking Advantage of Newcomer Programs

Many banks and organizations provide suitable services for newcomers, especially regarding their financial status. Some programs that can be developed are lower fees, special savings accounts, financial advice, etc., directed to new immigrants. The following offers can help make the transition a lot easier.

10. Failing to Send Money Responsibly

When transferring money abroad, special attention should be paid to the commission and the exchange rate. Employ accurate and affordable ways to transact money across different international borders. To get the most out of your affair, compare different services for the lowest fee rates. I use different Wise for global transfer money transfer and Africhange for sending money to Nigeria and other African countries. Both apps offer a very competitive rates.

So, now I hope you have learnt about the mistakes to avoid as a newcomer in Canada. It costs time to plan and to learn, so why risk making an uninformed decision? This will ensure that you do not struggle with financial challenges as you embrace your new life in Canada.

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