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3 Must-dos for Newcomers to Succeed Financially in Canada

By cvf, 05/15/2024

3 Must dos for Newcomers to Succeed Financially in Canada 1

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Moving to a new country can be both an exciting and overwhelming experience, especially when managing your finances in a new banking system. Understanding how to navigate the financial landscape is crucial for a smooth transition and long-term success for newcomers to Canada.

#1: Getting ready for the financial system in Canada 

Setting up a bank account is one of the first and most essential steps upon arrival in Canada. Although there are many banks in Canada, most Canadians trust their money with “the big 5” banks, each with hundreds of locations across the country and a wide range of financial products, such as chequing accounts for your paycheque, investment accounts, and credit cards. 

These banks include Scotiabank, the Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada (RBC), and Toronto Dominion Bank (TD).     

Getting your finances set up correctly is one of the most critical steps in starting your life in Canada. So many assets of life revolve around financial stability and building a good credit score, so newcomers must establish these two things first. Scotiabank’s StartRight® Program makes the process easy by:

  • Providing banking with no monthly fees for a year with the Preferred Package Chequing Account1
  • Offering unlimited no-fee international money transfers2
  • Providing  newcomers with access to  a credit card so they can start building their credit score, with credit up to $15, 0003
  • 10 free equity trades when you invest a minimum of $1,000 in a new Scotia iTRADE® account4

For those who have landed in Canada already, with StartRightTM, you can get up to $1,800* in bonuses and savings in the first year for a limited time.

Scotiabank also allows eligible newcomers to set up their banking before they leave their home country. The Scotiabank International Account5 enables individuals to apply for an international account and transfer up to CAD$50,000 before moving to Canada. This step can help show proof of funds during the immigration process.

#2: Financial planning | Managing your money in Canada

A sound financial plan is your roadmap to success in Canada. It should assess your current financial situation, set realistic goals, and outline how to achieve them.

  • Know your costs: Housing, transportation, and food costs vary in Canadian cities. Do your research and look for a cost-of-living calculator to understand how much you’ll need to live. 
  • Set your budget: There’s a 50/30/20 rule of budgeting, where 50% of your money goes towards your needs (food, shelter, etc.), 30% goes to your wants (dinners out with friends, subscriptions like Netflix, etc.), and 20% goes to paying off debts, savings, and investments.
    This Money Finder calculator, an exclusive Scotiabank tool, will help you determine if you have additional funds for your financial goals by comparing your income to your expenses.
  • Set up sinking and emergency funds: A sinking fund is a place to store money for a specific expense, such as car repairs, vacations, and even monthly expenses like internet, cell phone, and television. Sinking funds help you manage regular and unexpected expenses.
    An emergency fund is for emergencies only, like an illness or job layoff, so you can continue to pay for your necessities like rent. 
  • Make a plan and stick to it: While tracking your income and expenses is always a good idea, it’s critical to understand where your money is going when you first land in Canada and beyond. By expecting unexpected costs, you can plan how to afford them, which will buy you peace of mind. 
  • Plan for your future: Canada has two primary investment choices for your retirement: a tax-free savings account (TFSA) and a registered retirement savings plan (RRSP). You can use a robo-advisor or a financial advisor to help you start your investment journey—the earlier you start, the sooner you may be able to retire. 

You can visit banks with branches or offices providing free financial advice. Sit down with one of their banking advisors to discuss the finer details of your plan. 

Parmpreet Jathol, a financial advisor with Scotiabank, personally navigated these challenges after relocating from India to Canada in 2018. Drawing from her journey, Jathol advises every newcomer to consult with a financial advisor to set up their banking in Canada and gain insights into the workings of the Canadian banking system.

#3: Get your financial paperwork in order

Work to gather and understand Canada’s key financial documents and what they do. Here are a few that will help set you up for economic success in Canada as a newcomer:

  • Social insurance number (SIN): This is essential for working in Canada and accessing government programs and benefits. It’s one of the first things you should apply for upon arrival.
  • Canadian bank account: We’ve mentioned this already, but because it’s necessary for managing daily finances, receiving paychecks, paying bills, and building a financial history in Canada, we thought we’d repeat it.
  • Credit card: Credit cards help you build a credit history in Canada. A good credit score is crucial for future loans, mortgages, and rental agreements.
  • Driver’s license: While major cities like Toronto, Vancouver, and Montreal may have public transit, many jobs may require you to drive, and it’s one of the most used forms of identification that stays in your wallet. 
  • Education and professional credentials: Having your educational and professional credentials assessed and recognized can help secure employment, which is crucial for financial stability
  • Permanent resident card or citizenship documentation: This is essential for proving your status in Canada and is necessary for many bureaucratic and financial processes.
  • Tax documents: Understanding Canada’s tax system and knowing how to file your taxes is crucial. Keep records of your income, tax returns, and any communication with the Canada Revenue Agency (CRA). Personal taxes are due every year on April 30th, and many free tax software options connect to your bank. 
  • Employment records: Collect your pay stubs, employment contracts, and letters of employment, as they are essential for various financial applications, including loans and mortgages.
  • Insurance policies: This includes health insurance, car insurance, life insurance, and any other relevant documents crucial for financial security and protection against unforeseen events.

Some newcomers might not immediately have proof of address upon arriving in Canada. Scotiabank offers an alternative: a referral from a current Scotiabank customer in good standing can be used instead. To verify their immigration status, newcomers can present their temporary residency permit, Confirmation of Permanent Residence (COPR), or work or study permit.

Educate yourself on Canadian finances

Knowledge is power, especially when managing your finances in a new country. Take advantage of financial literacy resources and workshops often offered by banks and community organizations. 

As a newcomer to Canada, you may receive numerous financial advertisements on social media, which may only sometimes be reliable. Jathol advises newcomers to exercise caution and confirm any online financial information with reputable sources, including family, friends, and their financial advisors.

Use immigration.ca to learn about the Canadian financial system, taxes, insurance, and investment options available. 

Being well-informed will enable you to make intelligent financial decisions and navigate the complexities of Canada’s economic system.

This article is provided for information purposes only. It is not to be relied upon as financial, tax or 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 financial, 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.

† Scotiabank StartRight® Program is available only for Canadian Permanent Residents from 0-5 years in Canada and Foreign Workers.

* Value of up to $1,800 is calculated as follows: i) up to $583.30 first year value with the StartRightTM Program + ii) Up to $1,241 in welcome offer value, first year point earn potential and foreign transaction fee savings:

Value of up to $583.30 is an annual potential value for the first year based on the following benefits and savings available to StartRightTM customers as of March 1st, 2024:

    • $203.40 in account fee savings for a Preferred Package chequing account ($16.95 monthly account fee waived for first 12 months);
    • $280 in fee savings when compared to in-branch Swift Wire Transfers (assumes an annual average of 7 in-branch Swift Wire Transfers at $40 per transfer);
    • $99.90 in fee savings for 10 free equity trades with iTRADE (10 free equity trades per year at $9.99/trade);

    Actual value will depend on individual usage of the StartRight™ Program features and products. Conditions apply. All products and features are subject to change.

    Value of up to $1,241 in Scotiabank welcome offer value, first year point earn potential and foreign transaction fee savings includes the following as of March 1, 2024:

      • $400 ($350 cash offer for new Preferred and Ultimate Package clients who complete certain qualifying conditions plus an additional $50 when you open a new RRSP, FHSA, or TFSA and set up an eligible recurring PAC or deposit and maintain a minimum balance);
      • $300 value for new Scotiabank Passport Visa Infinite customers who can earn up to 30,000 bonus Scene+TM* points plus $150 primary card fee waiver for the first year;
      • $287 in first year point earn potential (28,733 Scene+ points) on everyday purchases based on average annual first year spend per account with an average spend of 19% in 2x accelerator categories.
      • $104 in foreign transaction fee savings based on average first year annual foreign spend per account (save the 2.5% foreign transaction fee typically charged by other card issuers).

      Actual offers and rewards earned will depend on individual card usage and eligibility for applicable offers. Conditions apply.

      1 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”). 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. Employees of 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. This Offer is non-transferable and cannot be combined with any other offers except as otherwise permitted. 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.

      2 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 https://www.scotiabank.com/international-money-transfer.

      3 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 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 determined 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.

      4 Conditions apply. Offer valid for new Scotia iTRADE® accounts, excluding Cash Optimizer Investment accounts, opened by new Scotia iTRADE clients who do not already have an existing account with Scotia iTRADE. If you open one or more new Scotia iTRADE account(s) (each, a “New Account”) and fund the New Account(s) within 60 days of opening the New Account(s) with at least CAD $1,000 in cash or in Net Equity (cheque deposit, electronic funds transfer or transfer of assets) (“Minimum Amount”), from an account that is not held at Scotia iTRADE, (1) the commissions associated with the first 10 online commissionable trades of Equities, Options and ETFs placed within 365 days of the date when you funded your New Account(s) with the Minimum Amount will be credited back to the corresponding New Account within 30 days of each order fill, to a maximum amount of $9.99 per trade in the currency of the account (maximum total commission rebate of $99.90), (2) the amount of the transfer-in fee charged by another Canadian broker will be credited to your New Account (up to $150 per client) subject to Scotia iTRADE’s receipt of the documentation evidencing such transfer-in fee. Scotia iTRADE reserves the right to charge you all or part of the commissions associated with the first 10 online trades completed within 365 days of funding your New Account(s) (when such commissions were previously credited back to your New Account(s)) if the conditions of the offer are not complied with. Scotia iTRADE reserves the right to modify and/or cancel this offer at any time without notice in its sole discretion. Clients must enter the promotional code SRPE15 (English) or SRPF15 (French) when submitting the New Account application to qualify. To qualify for this offer, you must satisfy Scotia iTRADE’s Canadian residency requirements, have a valid Social Insurance Number, be eligible to open a Scotia iTRADE account, maintain all of your accounts at Scotia iTRADE in good standing, not be in a disallowed debit position and not have any outstanding margin calls due. This offer has no cash redemption value. This offer cannot be transferred or combined with any other promotional offer (excluding Refer-a-Friend). Limited to one offer per client. In case of joint account only one account holder will be entitled to receive free equity trades.

      5 Scotiabank cannot accept more than one wire payment per family and such payment cannot exceed CAD $50,000. You are responsible to ensure that your wire payment to Scotiabank in Canada, including the amount, is in compliance with the local laws of your country.

      The post 3 Must-dos for Newcomers to Succeed Financially in Canada appeared first on Canada Immigration and Visa Information. Canadian Immigration Services and Free Online Evaluation..



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