Welcome to Canada: A newcomer’s guide to a new country, new currency and setting new goals

Learn how to spend, save, manage credit and build towards buying your first home in Canada.

You've dreamed about living in Canada: riding VIA Rail from coast to coast, taking in the Northern Lights, spotting a moose, learning to ice skate and eating poutine.

The best way to build a new life in a new country is to start with a solid a financial footing. If you're a newcomer to Canada, here are some tips to help you start strong and achieve your financial goals.

Plan for pre-arrival success

Your first step, before you board the plane for Canada, is to learn how the banking system works. The more information you have about the colourful currency and the different types of bank accounts available, the sooner you'll be able to start establishing credit and building your credit score.

The Scotiabank StartRight^® Program¹ allows international students and newcomers to open an account and transfer funds before leaving their home countries. This is especially important if you're coming to Canada as part of a federal skilled worker or trade program and need to show proof of funds.

Once you're on Canadian soil, you'll be able to access advantages like:

• Free banking for one year with the Preferred Package Chequing Account²
• Unlimited no-fee international money transfers³
• Credit cards⁴ and specialized mortgage loans designed for newcomers

Establishing a financial footprint is key to building a credit history in Canada.

Establish credit

Unfortunately, your credit history won't move with you to Canada. As a newcomer, you'll need to establish credit and start building a new credit history when you arrive so you can more easily qualify for lines of credit, a mortgage or a car loan.

Applying for a credit card can help you establish credit.

Get a credit card

Many banks only issue credit cards to people with credit histories, making it difficult for newcomers who are starting from scratch. But getting a credit card and using it on a regular basis can help you build a credit history faster.

Scotiabank's StartRight Program allows newcomers to obtain credit cards without providing a credit history.⁴ Scotiabank also has credit cards specially designed for international students.

Before you apply for a credit card, be sure to learn everything you need to know about credit. Understanding the basics will help you figure out which type of credit card will best meet your needs. For example, some credit cards have no annual fee while others have lower interest rates or allow you to earn cash back or other rewards on purchases.

Once you receive a credit card, you'll need to use it carefully. Charge only what you can afford and try to pay off the balance every month — and on time. These strategies will go a long way in helping you build your credit score.

Increase your credit score

In Canada, your credit score is a number between 300 and 900 that lenders use to decide how risky you are to loan money to. A higher credit score will help you win over lenders and make it easier to qualify for loans for big purchases like a car or home and secure lower interest rates.

You can do a deep dive into how credit scores work in Canada and how they're calculated, but these are the biggest factors that impact your credit score:

• Payment history. Pay all of your bills on time and by the due date — not just your credit card bill.
• Account activity. Only apply for credit when you need it and avoid opening too many credit cards in a short time period.
• Length of credit history. The longer you use a credit card, the better.

Increasing your credit score takes some doing, but it's essential to building your credit in Canada.

Spend wisely

Getting set up in a new country is expensive. Managing your finances can keep you from overspending as you adjust to living in Canada.

Spending wisely starts with a budget. Use a budget planning tool like Scotia Smart Money by Advice+ to track expenses like housing, utilities, food and transportation.5 You can also set aside funds for doing things that will help you settle in as a newcomer, like trying new restaurants, visiting museums or exploring other parts of Canada.

But don't forget to aside funds for emergency savings and retirement.

Save for the future

What do you want for your future? Are you hoping to leave public transit behind for a car? Do you want to stop renting and own a home? What do you want your retirement to look like? How can you make your goals for the future a reality?

Your path to savings starts with figuring out what your goals are. What are you looking to do in five or 10 years and beyond? How much money will you need to get there?

Start off with:

• Setting clear financial goals so you know how much to save
• Tracking your spending so you can make saving a priority
• Setting up automatic investments into saving/investing accounts (It's OK to start small!)

There are many options for saving and investing your money in Canada, from traditional savings accounts and Tax-Free Savings Accounts (TFSA) to Registered Education Savings Plans (RESP) and Registered Retirement Savings Plans (RRSP). It's a lot to take in, so talk to a financial advisor to create a plan that best fits your savings goals.

Buy your own home

Before you start searching for a house with a garage to store a snowblower, sidewalks where the kids can ride their bikes and new neighbours to invite to summer barbeques, you need to have a down payment.

In Canada, you have to have money upfront to buy a home. The amount required is between 5% and 20% (at minimum) of the purchase price (the percentage changes depending on the price of the home). You'll also need money to cover the GST or HST on new home purchases and fees for land transfer taxes, property taxes and closing costs.

Newcomers to Canada who aren't permanent residents or provincial nominees may also need to pay a foreign buyer tax.

Research mortgage options, like the Scotiabank StartRight mortgage program for permanent residents and temporary residents, and then book an appointment with a home financing advisor to learn more about the best mortgage options to make your homeownership dreams come.

Takeaways

It might take a while to spot your first moose or learn to bake the perfect butter tart, but you can start out strong financially and work towards the life you dreamed of in Canada.

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.

• ® Registered trademarks of The Bank of Nova Scotia.
• 1. Scotiabank StartRight Program, created for Canadian Permanent residents from 0-5 years in Canada, International Students and Foreign Workers.
• 2. Eligibility: To qualify for the 1-Year No Monthly Account Fee Offer (the “Offer”), open a new Preferred Package account under the StartRight^™ Program (the “Account”).Employees of The Bank of Nova Scotia (“Scotiabank”) and individuals who are currently or were previously holders/ joint holders of a Scotiabank chequing account within the last 2 years are not eligible for this Offer.
  How this Offer Works: During the first 12 months, your monthly Account fee will be waived and will not appear as a charge on your Account. The Account must be open and in good standing at the time of the waiver. All applicable service charges on the Account will continue to be applied monthly. After the first 12 months, you will begin to see the monthly Account fee charged to your Account unless you maintain a minimum daily closing balance of $4,000, in which case the monthly Account fee will be waived per the Account terms and conditions. This Offer is non-transferable and cannot be combined with any other offers. Maximum one Offer per customer. All rates, fees, features and benefits are subject to change. Offer may be changed, cancelled, or extended at any time without notice.
• 3. For customers onboarded as a part of the Scotiabank StartRight^® Program, we do not charge a service fee for the transfer, however, foreign currency exchange rates apply. A transfer needs to be made from an eligible Scotiabank Chequing or Savings account. Subject to daily limits and additional terms and conditions as set out in the Scotiabank International Money Transfer Agreement found at www.scotiabank.com/international-money-transfer.
• 4. Subject to credit approval. To be eligible, you must be a participant in the Scotiabank StartRight Program. To qualify for a credit card, you must be a participant in the Scotiabank StartRight Program. To qualify for a credit card, you must be resident of Canada and the age of majority in your province/territory where you live. Your approval for a credit card and the credit limit assigned will be determine based on Scotiabank’s credit criteria, including your verifiable income and credit history (if available). The credit limit amount of up to $15,000 under the Scotiabank StartRight Program is subject to change by Scotiabank from time to time without prior notice. A credit history in Canada is not required in order to be eligible for a credit card under the Scotiabank StartRight Program
• 5. To access Scotia Smart Monday by Advice+, you must have an active personal banking retail product, have transacted at least once on your account within the preceding 6 months and have logged into the Scotia Mobile Banking App.