Financial Tips for New Canadians
Following on from the story on Emigrate2.co.uk earlier this week, which revealed the toughest challenges newcomers to Canada face after arriving in the country, BMO Wealth Institute, who conducted the survey, has released a number of tips designed to help new Canadian immigrants better navigate their new financial landscape.
Establish a credit history
It is important to start building a good credit history as early as possible after having arrived in Canada. Build a credit score by starting with a small line of credit or credit card, and then paying off balances as required.
Build a budget
You can keep track of all expenses for three months by using a Cash Flow Worksheet and then estimate how much you spend per year in each category. The BMO has a worksheet template you can use: (http://www.bmo.com/media/financial-planning/fp_worksheets/cashflow_en.html)
Know your tax obligations
As a new resident of Canada, you will be responsible for paying taxes on all of your worldwide income. It’s also important to consult with a qualified tax professional on the status of any foreign property that you own.
Develop a financial plan
A financial plan strategically allocates financial resources towards achieving financial goals. One significant way to help achieve these goals is to minimise the amount of tax payable on income earned each year. Tax-free plans such as Tax Free Savings Accounts (TFSA), and tax deferred plans such as Registered Retirement Savings Plans (RRSP) are key tools that are incorporated into financial plans in order to reach specific savings goals, such as for the purchase of a home or for retirement. Another tax advantaged plan that is often included in a financial plan is a Registered Education Savings Plan (RESP), used to save for a child’s future post-secondary education.
Speak with a financial professional
A financial professional can help you develop a personalized financial plan that incorporates your financial goals for today and into the future.