Financial Tips for New Canadians
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While immigration is a pillar to Canada’s short-term economic recovery and long-term prosperity, there is a lot for newcomers to navigate, especially when it comes to financial education.
As the government launches its boldest immigration plan in years by welcoming more than 1.2 million immigrants to Canada over the next three years, a recent study sheds light on the socioeconomic setbacks to new Canadians during the global health crisis. Two-in-five Canadians believe newcomers have lost ground in the last six months according to the recent COVID Economy Poll, conducted by Browmwich+Smith.
Canadian newcomers and money misconceptions
Benjamin Aduba, Debt Relief Specialist at Bromwich+Smith, understands this situation well. He, along with his wife and newborn daughter, immigrated to Canada five years ago from Nigeria. While Benjamin was fortunate to have banking industry experience prior to emigrating and was exposed to financial planning and knowledge – many of our clients do not have this advantage.
New Canadians reach out for help because they’re fearful. Many of our clients come from countries where it’s a crime to leave debts unpaid and worry they will go to jail. Instead of seeking help earlier, they suffer in silence.
When Benjamin came to Canada, he remembers being given a lot of support from the Centre for Newcomers to write a resume, find a job and a place to live, but there was not much information available on credit, budgeting or financial planning.
There is a lack of financial education for newcomers, leading to many misconceptions and common misunderstandings leave them feeling fearful of not being able to pay debt and not knowing they hold the right to restructure.
Tips to help immigrants understand Canada’s financial landscape
Along with the basic information to help immigrants settle and find jobs in Canada, they should be equipped with some simple tips to help them adapt to our credit culture to avoid hardship and undue stress down the road.
- How to strategically build credit: You need to build credit in Canada but, you need to be strategic about it. Credit is not free money and it can harm your credit rating if not used correctly. Be sure to sit down with your financial professional and learn about the credit product being offered. Read more on how credit works in Canada.
- The importance of a credit score and what it impacts further down the line: Your credit report will impact financial and lifestyle goals. Get clear on your goals. If your goals are to make some large purchases in the near future, put a plan in place to ensure you have a plan to pay back what you owe. If you’re already struggling, there are simple things you can do to improve your credit score.
- Build a budget and stick to it: You don’t want to be in a position where you are living beyond your means and using credit to pay for basic needs like food. Set financial goals. Build a budget and stick to it to ensure you’re not accumulating debt to live.
- Start saving: Open a separate savings account and contribute to it consistently. Even if it’s $5 a pay cheque, it will add up over time and may help you in the future when you need it.
- Beware of scammers and identity thieves: Once you have a credit profile and available credit, you could be a target of thieves looking to tap into your available balances. Be careful shopping online and protect your credit card information at all costs. Never click on unknown links sent to you by email or provide your banking or credit card information to people over the phone or by email. The Government of Canada has several resources to help you avoid identity theft.
- Know your rights to restructure: Canadians are protected by the Bankruptcy and Insolvency Act that allows citizens to restructure debt if they are unable to pay. This is a federally regulated right afforded to every Canadian under the law.
If you do find yourself struggling with debt and are constantly thinking about it, there’s no need to suffer in silence any longer. Bromwich+Smith offers a free consultation with the Debt Relief Specialists who can talk to you about your options. Take that first step to rebuilding your worth by making that initial call to 1.855.884.9243 or book online.