Congratulations on making this bold decision to immigrate to Canada. As a gen zero immigrant, I get the excitement of moving to a blessed land like Canada. I also recognize that it takes a lot of courage to walk-away from the known. Your willingness to immigrate relates strongly to securing to a better future for your families and yourself. A large component of this better future is managing your savings and learning more about the Canadian Financial ecosystem.
You may intend to immigrate as a permanent resident or come to Canada as a student or temporary worker. The following phased step by step suggestions might help you think through some key financial aspects:
THE PRE-IMMIGRATION PHASE – RESEARCH
Decide on the city/town of your relocation: The most important decision in my opinion to kickstart your life in Canada. You have limited choices if you’re a student based on the location of your university or college. But if you’re migrating based on a Permanent Residency, your cost of living would significantly be impacted by this decision. While the Toronto and Vancouver CMAs see the most immigration across the country, they are also the most expensive when it comes to renting. If you are in an industry where remote jobs are common, consider moving to locations where rentals are more affordable.
How is banking in Canada different relative to your home country: Sift through Canadian bank websites and financial comparison tools online. I was used to holding a bank account with no minimum balance for free. It was also a shocker to me that I had to pay for a chequebook. All this in my first month of being in Canada ! 🙂
Figure out how much do you need to survive for a year without a job: I recommend brining at least a year’s worth of expenses. It takes time to set-up your own shop or to find employment. You may need to pay a couple of month’s rent to secure your rental. Setting up your home, cell plan, internet etc. all require some cash in hand as well.
THE ARRIVAL PHASE – EXECUTE
Get your Social Insurance Number (SIN) and open that Bank Account: Getting a SIN would be one of the first things you would do once you arrive. You would need to reach out to Service Canada over the phone, online or in-person to get your Social Insurance Number. You can get more details on how to apply for a SIN on Canada.ca.
Your SIN is used for income reporting. You need it to work in Canada or to have access to any government programs or benefits. It is also required to open your bank account. Many banks and financial institutions offer newcomers additional benefits for opening a bank account. Scour the internet for the most current options available to you. We will also be writing another article to assess the options for banks available to newcomers in Canada soon.
Get your first Credit card: This would likely come with opening your Bank account. Your first credit card is critical for you to start building your credit history. If you came to Canada as a student, your credit limit maybe low. Not to worry as banks offer credit increases each year. We will be writing another piece to assess the best credit cards for newcomers to Canada. So, be sure to check it out.
THE BUILD PHASE – SERVICE
Building Credit: Building credit is a crucial pre-cursor to purchasing you’re a home. It also important to have a good credit if you decide to make large purchases including an automobile. A stronger credit score will help you make these purchases faster and can even help with getting better interest rates.
Budget and Invest : Once you have set-up shop or started work in your job, you will want to begin investing. Budgeting is a pre-requisite to be able to optimally save money for investing. At this time, you should have researched your options when it comes to tax sheltered accounts such as TFSAs and RRSPs.
You could also consider tracking your net worth when you begin your Canadian journey to track your progress. This can keep you accountable and motivated to keep going.
Buying your first Canadian Home: Consider building equity into your residence over renting as you establish yourself in first few years. The cost of homes has skyrocketed in Canada since the pandemic. And coming up with that initial down payment will be a challenge. As a first time home-owner, you may not have to pay down all 20% of the required down payment. Your systematic investments may help with getting to that crucial down payment number.
Insure yourself and your home: As you take-on more debt to build your wealth, it is important to protect yourself and your loved ones in times of uncertainty. Consider life, disability, and mortgage insurances as you start to build wealth.
Plan for your children’s education: A Registered Education Savings Plan (RESP) is a great way to save for your child’s post high school education. It is worthwhile looking into opening and contributing to this account for your children.
We’ve listed the most important elements in the Build phase keep the list short and actionable. Thanks for reading through and all the best in in your Canadian journey!