Whether you’re just moving to Canada or are a resident looking to improve your financial decisions, there’s no better time to do it than now. Like many other countries around the world, the cost of living in Canada has risen to an all-time high. If you are a visiting student, you will have to pay about $20,600 for a study permit in 2024, more than double the original cost of $10,000. To cope with the strict economic measures, you will have to make new financial decisions that will make your stay in Canada a smooth experience.
What awaits you in this article:
Do your research before making any important financial decision
Whether you’re planning on buying a car or planning a luxurious weekend getaway, these are important financial decisions that you shouldn’t rush into. It’s better to work with people who have made similar decisions before and implemented them successfully. You need to know how much money you need, what alternative options you can consider, and any other information that might help you find the best deal.
For example, if you’re planning an end-of-year vacation, you might research topics such as why Canadians prefer staycations to vacations. Any relevant information you receive before making a major financial move can be helpful in your financial decision.
Start saving for retirement early
Once you’ve found a job in Canada, it’s important to sign up for a good retirement plan as early as possible. Since retirement savings earn compound interest, you can make an admirable amount by getting started early, even when interest rates are low. If you start saving late, you will save more money from your income than if you start saving early in your career. Alternatively, you can enroll in the Canada Pension Plan (CPP), a monthly taxable benefit deducted from your income and paid back to you when you retire.
Maintain an active bank account
The best way to save and protect your investments in Canada is through the bank. Banking in Canada is very safe and highly regulated with the Canadian Deposit Insurance Corporation (CDIC) insuring most deposits up to $100,000 for each account you hold. There are several helpful bank accounts you can open for various financial purposes in Canada, including:
saving account
This is a perfect account option if you’re saving for a project like buying a car or an emergency fund. In the end, you benefit from impressive interest rates and minimal account fees for optimal profits.
checking account
A checking account is the everyday bank account you open for frequent transactions like paying mortgages, rent, or other recurring payments. It is also the account through which you receive paychecks directly from your customers or your employer.
Tax-Free Savings Account (TFSA)
Launched in 2009, the TFSA program is designed to help people aged 18 and over with a Social Identification Number (SIN) save money tax-free for the rest of their lives. Any contributions you make to your TFSA account will not be deducted from your income tax deductions.
Stay debt free
If you already have debt, it’s best to start paying off your most expensive debts while minimizing taking on new debt. The credit cards and loans that charge the highest interest rates should come first. Once you are done paying off these loans, you can plan your finances and avoid taking out new loans to be debt-free.
Keeping an eye on your finances will help you enjoy a smooth stay in Canada and improve your overall quality of life. These practical tips should get you on the right track, no matter how far back the financial crisis occurred.
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