Happy New Year readers! Each new year in Canada usually comes with personal resolutions which realistically will be broken somewhere along the way. Here at Build On, we would like to provide you with tips to actually help you keep one of the most popular New Year’s resolutions. According to Statista, after improving personal fitness and nutrition, focusing on financial goals is the top New Year’s resolutions for Canadians[i]. As a newcomer to Canada it is impossible to predict when you will find a desired job in your chosen field. Therefore, it is particularly important that you consider money management and organizing your budget even before you arrive.
Create a spending plan. A spending plan is a process that usually involves listing all your sources of income, listing all your expenses and figuring out the difference. When you work out this process you will find that you are either spending more or less than what you make or have. Tracking your spending habits will make it easier to know where you fall on the spectrum.
As a newcomer to Canada (or before you arrive) creating a spending plan is relevant because it allows you to predict where the bulk of your expenses will be and allows you to prepare beforehand. Although it may be hard to determine where the bulk of your expenses will be before you arrive, you can begin to outline your priorities, assess your needs and wants and start figuring out where you will have to make the necessary cuts. It is very important to be realistic about the expenses that you will incur while you may still be searching for employment.
Create a financial plan. This is the next step in managing your money once you do secure a job. This plan can be broken down into three terms to make them more realistically viable. Your short term financial plan should include goals that can be reached within 6 months to a year. Your medium term plans should include goals that can be reached within 5 years and your long term plans should include goals that can be reached within 10-15 years.
Start saving and create an emergency fund. Unexpected emergencies can sometimes interrupt your financial plan. To mitigate the risks you should be prepared for the unexpected. Make sure to start an emergency fund that is able to cover 3-6 months of household expenses as a contingency.
Select a good way to save your money. There are several ways to save. Financial institutions and modern technology have greatly improved the process of saving. You can save automatically by having automated transfers from your chequing account to your savings/investment account or you can choose to have a portion of your pay cheque directly transferred into a retirement or savings account. This is advisable because once you set it up it literally takes no effort on your part and you never have to worry about “accidentally” spending the money you are meant to be saving.
Speak to your bank. The final piece of advice I will give in this blog post is that as a newcomer to Canada you should speak to your bank to get more information on how they can help you through this process. Several financial institutions offer incentives to newcomers and walk newcomers through the seemingly overwhelming process of getting started. There are other aspects of dealing with money in Canada that may seem strange to newcomers. Build ON recently hosted a webinar about “Newcomers and Money” To learn more about what newcomers should know when it comes to money in Canada watch our webinar presented by Richard Haggins from Credit Canada Debt Solutions.
Happy New Year again from Build ON! Register for our services today or reach out to your employment consultant if you have further questions relating to this topic!