Five financial mistakes to avoid when moving to Canada

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3 min.

It’s much easier to set up your finances in a new country if you can avoid a few missteps. Here are five to keep in mind when you arrive in Canada.

Mistake #1: Overlooking financial planning

When people move to Canada, it’s usually to stay awhile!

Regardless of the financial resources you have when you arrive, it’s important to make the most of them in the short, medium and long term. That’s why proper financial planning is essential when it comes to maintaining financial security and achieving your goals in your new country.

Regularly saving set amounts is one of the first planning strategies you should adopt. Systematic saving is a great way to accumulate resources for your future plans and retirement. It can also help you establish an emergency fund. Keeping your financial planning in mind when you arrive will help you build solid foundations in your new country.

For a better idea of all the savings options available in Canada, don’t hesitate to contact a financial advisor, who can help you plan your future, stress free.

Mistake #2: Neglecting your budget

The cost of living in Canada may be very different from that of your country—and possibly even more so in these times of growing inflation.

To get a full picture of your expenses, a budget is indispensable. A financial advisor understands the economic realities of your region; they can help you create an effective budget by analyzing the real costs associated with your situation. In doing so, they will help you overcome economic challenges and maintain your standard of living. What’s more, they will give you the tools you need to make the most of the money you already have.

When all’s said and done, making a budget is often easier than you’d think. Just take it step by step and verify your strategies with a professional if you have any doubts.

Mistake #3: Underestimating debt

It’s totally normal to want to make the most of Canada’s advantageous living conditions. However, as in many places, our easy access to credit and consumerist culture is liable to lead one astray.

To not fall into the trap of debt, it’s essential you adopt responsible financial management practices. By consuming in moderation, you can avoid debt and may even be able to dedicate some money toward your savings, enabling you to take full advantage of life in your new country.

By avoiding useless debt, you work toward securing peace of mind and better financial stability for the future.

Mistake #4: Waiting to pay back your debts

Taking out a loan can give you quick access to the significant funds needed to make major purchases, such as a car or certain necessities.

However, having excessive debt is a real obstacle to your financial progress and puts you at risk of serious problems down the road. Having to pay 9%, 15% or 22% interest on your debts leaves little room for future spending and saving.

To minimize the negative consequences of debt, repay your loans as soon as you can, avoiding penalties, higher costs and stress. When possible, concentrate first on paying off the debts that have the highest interest rate. This will give you the wiggle room you need to manage your other obligations and continue saving.

Mistake #5: Failing to insure yourself against the contingencies of life

Although Canadian provinces provide social security programs, they only offer relatively basic support. Life, health and disability or even auto and home insurance will help you lessen the financial burden if the worst were to happen.

Being aware of these five mistakes doesn’t, of course, protect you from all the challenges that you may run into. However, understanding these critical issues gives you the tools and flexibility you need to face the unforeseen—and make hay while the sun shines.

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