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Moving to a new country can be an exciting and life-changing experience, but it can also be daunting, especially regarding your finances.
Whether you're moving for work, school, or just for a change of scenery, preparing your finances in advance is essential to ensure a smooth transition.
This post will explore what you need to know about preparing your finances to move to Canada.
Table of contents
12. Education
1. Cost of Living in Canada.
Before you start packing, it is important to research the cost of living in Canada. This will give you an idea of how much money you will need to save before you move.
The cost of living in Canada can vary significantly depending on where you plan to live, so it is essential to research the cost of housing, food, transportation and other expenses in the province you are moving to.
A helpful site is Numbeo.com, where you can filter by city and have benchmark prices for each category mentioned above. Be sure to also check out Cost of Living in Canada: Basic Expenses for Newcomers.
2. Set a Realistic Budget.
Once you know the cost of living in Canada, you can begin to set a budget for your move. This will help you determine how much money you will need to save each month to meet that amount before your trip has started. Be sure to do a budget review exercise so you don't run into any surprises.
Think that you will have to pay some additional amounts at first, such as at least two months' rent, and since most homes are unfurnished, you will need to invest in furnishing your new space.
Another expense is winter clothing, which can be expensive at first; we tried to buy at lower prices by following the tips in Winter clothing in Canada: What to wear during the Canadian winter.
3. Save more money than you think.
It depends on your country, but in our case, the cost of living in Canada is much higher than in our home country.
I suggest you save as much money as you can. If you have already decided in which province you want to live. Use the internet to understand the cost of living, rent, transportation, groceries, etc., as mentioned in item 1 above.
That is why it is ideal to start saving as soon as possible.
No matter how well you plan, unexpected expenses may arise when moving to a new country. It is essential to have a plan in place to deal with these expenses, such as a medical emergency or a car repair, etc.
4. Immigration fees.
Understand the costs associated with the immigration process, including permit or visa application fees, legal fees and relocation expenses. All of these need to be taken into account when planning.
The value of immigration costs will depend on which immigration program you choose and whether you decide to do the paperwork yourself or require the assistance of an immigration consultant, which will increase the budget required.
5. Eliminate or reduce local debts.
Once you have defined the budget, you must set strategies to reach that amount in the established time frame.
We implemented this suggestion, which may sound counterproductive, but in the long run, it helped us. If you have saved enough money to close local debts, I recommend you do so. You will have peace of mind and will not have to worry about paying them from abroad, plus you will generate a clean record in case you need to apply for a loan in your country.
So I suggest you review your debts and find a way to close most or all of them, if possible.
6. Check to see if you have automatic payments on your bills.
Sometimes to make it easier to pay bills at the end of the month, banks allow you to set up recurring payments or automatic withdrawals directly from your bank account.
If you have any services deducting money directly from your account, cancel or stop the service if you do not use it.
And again, call the bank to see if you have to sign anything on paper.
7. Open a Canadian Bank Account.
For this process, you have two alternatives:
Create an international account from your country.
Wait until you arrive in Canada and open an account directly at the bank branch.
This is totally up to you, but there are alternatives to opening an international bank account from your country before coming. I used Scotiabank, where you create a virtual international account, then make an appointment and open your account when you arrive in Canada. They immediately deposit the money you already had in the virtual account.
The second option is to arrive and apply to the bank of your choice and then see other ways to transfer your money to that account.
Be sure to research different banks and account options before choosing a bank, as fees and services may vary.
Here are some of the banks in Canada: Scotiabank, Neo Financial, RBC, CIBC, etc.
8. Currency exchange.
Be aware of the exchange rate between the currency of your home country and your new one, as it can affect your purchasing power and the cost of goods and services.
If you are relocating from another country, you must transfer your money to your new Canadian bank account. Research the options and compare fees and exchange rates for the best deal.
Some examples you can check that at least worked for Latin American countries are Currency Bird, Remitly and Western Union.
In our case, I was constantly checking the value of the Canadian dollar to transfer at the best possible exchange rate.
9. Apply for a Credit Card.
A Canadian credit card can help build a credit score.
However, it can be challenging to be approved for a credit card as a newcomer to Canada, as you will have no credit history in the country. One option is to apply for a secured credit card, which requires a deposit as a guarantee. This can be an excellent way to start building your credit history in Canada.
I did it this way, and the bank held that money for at least the first year; then, I could increase my credit limit and get my money back.
If you are unfamiliar with the term credit score today, I suggest you check it out since it is crucial to access loans, rent a new house, buy a car, etc.
10. Consider Your Tax Obligations.
When you move to Canada, you will be subject to Canadian taxes. Research Canadian tax legislation and understand your tax obligations before you move.
You may have to file a tax return in your home country and Canada depending on your situation. It is good to consult a tax professional to ensure you meet all your tax obligations.
11. Growing your savings.
If you will move savings to Canada, look for a high-interest savings account or another tool to grow your money.
I use a savings account with Neo Financial that offers me 2.25% per year, and I also have a Tax-free saving account (TFSA) where I can invest.
Check out other financial products you can use to grow your savings.
12. Education.
If you have children, research the education system in the new country, including school options and associated costs.
The good news is that according to conversations with some newcomer parents in Ontario, you will not have to pay for school; only in some cases you will need to buy the uniform, but that's about it.
Check this aspect depending on the province you are migrating to.
I hope this post gives you an idea of the financial considerations you need to make if you are moving to Canada.
To learn more about what to prepare before your trip, check out 40 things you must do in your home country before moving to Canada.