Whether you’re just moving to Canada or are a resident looking to improve your financial decisions, there’s no better time to start than now. As is with many other countries globally, Canada’s cost of living has skyrocketed to an all-time high. If you’re a visiting student, you’ll have to pay about $20,600 for a study permit in 2024, more than double the initial cost of $10,000. To manoeuvre the tight economic measures, you must adopt new financial decisions that will make your stay in Canada a seamless experience.Â
What you can expect in this article:
Research Before Making Any Major Financial Decision
Whether you’re planning to buy a car or fancy a luxurious weekend getaway, these are major financial decisions you shouldn’t make in a rush. You’re better off liaising with people who’ve made similar decisions before and executed them successfully. You need to know how much money is needed, the alternative options you can consider, and every other information that might help you strike the best deal.
For instance, if you’re planning an end-of-year vacation, you could research topics like why Canadians are choosing staycations over vacations. Any relevant information you get before making a major financial move can help shape your financial decision.
Start Saving for Retirement Early
Once you secure a job in Canada, it’s important to register for a good retirement plan as early as possible. Since retirement savings attract a compound interest, starting early gets you an admirable amount even if the interest rates are low. Waiting to start saving late would mean saving more money from your income than when you start saving early into your career. Alternatively, you could also register for the Canada Pension Plan (CPP), a monthly taxable benefit deducted from your income and awarded back to you when you retire.Â
Maintain an Active Bank Account
The best way to save and insure your investments in Canada is through the bank. Banking in Canada is very secure and heavily regulated, as the Canadian Deposit Insurance Corporation (CDIC) insures most deposits up to $100,000 for every account you hold. There are various helpful bank accounts you can open for different financial functions in Canada, including:
Savings Account
This is a perfect account option when saving towards a project like buying a car or an emergency fund. You’ll end up with impressive interest rates and minimal account fees for optimal gains.
Cheque Account
A cheque account is the everyday-use bank account you open for frequent transactions like paying mortgages, rent, or other recurring payments. It’s also the account you use to receive direct deposit paychecks from your clients or employer.
Tax-Free Savings Account (TFSA)
Started in 2009, the TFSA program is aimed at helping individuals who are 18+ years old with a Social Identification Number (SIN) to save money tax-free for the rest of their lives. Any contributions you make to your TFSA account aren’t deducted from your income tax deductions.
Stay Out of Debt
If you’re already in debt, it’s best to start paying off your most expensive debts while minimizing taking new ones. The credit cards and loans that charge you the highest interest should go first. Once you’re done paying these loans, you can plan your finances and avoid taking new loans for a debt-free experience.
Getting ahead of your finances is a great way to enjoy a seamless stay in Canada and improve the overall quality of your life. These practical tips should get you right on track, regardless of how far back you were in the financial crisis.
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