How to avoid these common financial mistakes when you’re new to Canada
Moving to a new country is a great opportunity to get a fresh start, with your career, new home and also your finances. It can be easy to make and hard to recover from financial mistakes when we don’t have all the information we need to make the best choices. To help you be financially successful as you begin your new life in Canada, we have put together a list of common financial mistakes people make and tips on how to avoid them in order to save you time and money.
#1: Not creating a budget for life in Canada
After coming to Canada, you want to make sure your budget works properly for your life here. How can you update it to make sure it reflects your life now? What are your current expenses? Some expenses will be familiar to you, but a new place may bring new expenses that you need to plan for.
Common Canadian expenses include:
- Monthly rent (apartment, home, condominium)
- Public transit (bus, subway)
- Car loan and gas payments
- Heating, hydro (water) and other utilities
- Warm clothing for the winter months
- Insurance (home, car, health)
- Groceries
- Mobile phone bills (Canada has some of the highest mobile phone operating costs in the world compared to other countries)
- Child care
- Cable and internet
Identifying your fixed monthly expenses is the first step to understanding your personal budget. Budgeting your expenses is key to making sure you have enough money for necessary life purchases. The Government of Canada’s Budget Calculator is a tool that can help get you started and begin saving more money for your future plans in Canada! Once you have a budget in place, you can start to see how much money you can be saving each month for larger future purchases.
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#2: Not building your credit history
We previously shared an article diving into everything you need to know about credit. A credit history is very important for major life events. A credit score is something you will need to apply for a mortgage, get a loan or a financing plan in Canada. Your personal credit score is the best way for money lenders to understand your financial background, assess your level of risk and determine your interest rate. Having a good credit score can also help you save money on interest rates and get approved more easily for things like cell phones, lines of credit and car loans.
Building a good credit score can take time, so be sure and apply for a credit card before you come to Canada, or as soon as you arrive. Scotiabank offers a variety of credit cards for newcomers to help you get started on building your credit.
Stay connected to Scotiabank to better prepare yourself for your upcoming move
#3: Missing bill payment deadlines
It is never a good idea to miss the minimum payment deadline on monthly bills, dues or fees and can be very challenging to catch-up once you are behind. There are some potential risks to missing payments, including:
- A late-payment fee, which is added to the next month’s bill
- A drop in your credit score, especially after several late payments
- An increased interest rate on any future credit you may need
- Your phone service could be shut off if you miss too many payments
- If you are a tenant and do not pay your rent, you are at risk of being evicted
A great tool to help you stay ahead is Scotiabank’s Pre-Authorized Payments, which allows you to pay bills automatically and on time. This means you won’t have to worry about due dates or missed payments for bills such as:
- Phone and internet bills
- Utility bills, including bills for electricity, water and natural gas
- Gym memberships
- Property taxes
- Language courses
- Child care
- Mortgage payments
- Utility payments (electricity, water etc.)
#4: Not filing taxes on time
Learning a new tax process can be overwhelming, and even people who have lived in Canada a long time still find filing taxes confusing! Still, it is very important that you fill in and submit your tax return on time. Missing the deadline to file your taxes may result in interest or penalties.
This article outlines helpful information on filing your taxes. The Government of Canada website also offers important information and resources regarding newcomer taxes, such as what tax forms you will need, where to find help with your taxes and credits that you and your family can benefit from.
#5: Not asking for help
Sorting out your finances in a new country can be complicated. Remember, when in doubt reach out for help! Scotiabank wants to support you and your family and see you succeed in Canada.
Book an appointment to talk to a Scotia Advisor today to map out a banking plan that will help you reach your goals, whether they are more short-term, like a savings fund in case it’s difficult to find work right away, or more long-term goals like retirement. They can walk you through how you can save and invest for your future in your new country.
Stay connected to Scotiabank to better prepare yourself for your upcoming move
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.