How to manage your finances as a newcomer
If you’re planning to move to Canada you’ll probably need to get your Canadian finances in order. This will help you get accommodated into your new life and do things like pay rent, get a debit card and a credit card, transfer money, deposit cheques, buy groceries, and support all your other necessities.
Depending on what country you’re coming from, the Canadian banking system might be more or less familiar, says Parmpreet Jathol, a financial advisor and mutual funds representative at Scotiabank, “It can be a challenge when immigration refugees get to Canada and they don’t know how to navigate. By connecting with your financial advisor, we can help walk you through how to save, how to invest, and do the important daily work of managing their finances or setting up accounts.”
Canada’s banking system
Setting up a bank account is pretty easy. All you have to do is provide identification like a passport, immigration papers, your Social Insurance Number (SIN) if you have one, and proof of address. Some new refugees may not have proof of address as soon as they land in Canada. At Scotiabank, instead of providing proof of address, you can use a referral from an existing Scotiabank customer in good standing. For proof of immigration, you can use your temporary residency permit, your Confirmation of Permanent Residence (COPR), or your work or study permit.
Some banks like Scotiabank allow you to open an investment account online before you arrive in Canada from your home country if you are eligible to simplify your banking. You can open an everyday chequing account at a bank branch after arriving in Canada.
Canada has five major banks and a bunch of smaller community banks, online banks, and credit unions. When you choose a bank as a newcomer, you need to consider what your specific financial needs are. For example, many banks won’t let you deposit international cheques through their mobile apps or ATMs. If you will be receiving frequent cheques from your home country, you have to choose a bank that has branches near you.
Household money management
Once you’ve chosen a financial institution and figured out how to open a bank account, you need to move on to the significant step of figuring out how to manage your money: budgeting, investing, and paying for the things you need.
Jathol explains, “For anyone who comes to this country, an important thing to learn about is how to manage and budget their money in ways that leverage the investment vehicles available to them in Canada. Beyond TFSAs, there are options like registered retirement savings accounts (or RRSPs) and the registered education savings plan (or RESPs).”
These accounts can help you build towards your financial goals secure your financial future over time – even with small initial investments. “One of the most important steps in money management is to get started on investing early and creating a financial plan as soon as you’re able to when you’re settled in Canada,” she says.
When you are new to Canada, you will probably be getting a lot of financial ads targeted to you on social media, which might not always be accurate. Jathol motivates new refugees to be careful and verify the information they have read online with trusted sources such as family, friends, and financial advisor. If you meet with a financial advisor at your bank branch, the meeting will be free and you won’t be obligated to take any of the recommendations that the advisor gives you, but it can help you better understand your finances and how to deal with them.
Banking and COVID-19
If you are worried about limiting your contacts to protect yourself from COVID, you will notice that most banking can be done in Canada without going into the bank – whether through online, mobile, or phone banking. Reach out to your bank to find out ways you can get the banking you need to do accomplished from the safety of your home.
If you’re facing financial hardship from moving during a pandemic, things like using your emergency fund, looking for programs that can support you, and finding ways to budget well can help. Making sure you have all your documents together and know how to access health care, are other things that could be important if you’ve just arrived.
It’s simpler than it seems
Money management for immigrants can seem complicated — but it’s just about learning how to navigate and use the system. When you first arrive, reputable financial advisors can help you figure out how to best manage your money in Canada so that you’ll meet your short and long-term financial goals. Ask for help if you’re confused — it will set you up for later financial success.