Jana gregorio
As a newcomer to Canada, you’re dealing with an ever-growing list of things to do, from finding a place to live to navigating grocery stores. One of the items on this list might say “finances” with a cloud of question marks around it. Which bank should you choose for your first account? How many credit cards do you need? What type of account is best for you and your family? Money is often a taboo subject, but to build a solid future in a new country, you need solid answers. In this article, we’re addressing the top three myths about personal finances among newcomers.
1. “I can’t start saving money now.”
Many newcomers tend to think that you should only start saving money and investing after certain aspects of life in a new country have been established. Whatever those aspects are, saving for your future can feel like a far-off dream during those first few years. However, the best time to start investing and saving money is now. A little goes a long way, and your future self – as well as your family – will be grateful for the savings you’ll slowly and steadily accumulate.
If you find yourself thinking “I’m struggling to make my ends meet. Monthly bills and payments eat up all my budget – there is nothing left to save and invest,” give yourself some grace. You’re doing your best, so pat yourself on the back. Secondly – and if you could only take one thing from this article, it’s this: saving is not about money, it’s about forming a habit. Get into the habit of saving 10 dollars every week or 20 every month, whatever works for you. You can use automated banking features to transfer money from a chequing account into a savings account or simply set up reminders on your phone. But once you start putting money away, there is no going back, and very soon you’ll be ready to look at investment options in Canada.
2. “I should choose one of the top banks.”
When you search “banks in Canada,” the top five banks jump at you from every page. It is very tempting to pick one of them as the main bank for your household because size is often associated with a feeling of security. And depending on the country you come from, security might be the factor you care most about. But don’t stop there.
You are free to have accounts at as many banks as you want, but it is considered best practice to have a primary bank plus one or two additional accounts with different financial institutions that match your personal needs and wants. For example, you can use your primary bank for day-to-day transactions, such as depositing your pay cheque, paying bills and using credit cards, but it might make sense for you to open a savings account with a bank that offers stronger interest rates and more favourable terms and conditions. Check out Motive Financial to see one of the best returns available for a traditional savings account.
3. “Having conversations about finances is hard, so it’s best to avoid them.”
If English is not your first language, you might not feel extremely comfortable talking about finances. It can be challenging to understand how various accounts, offers, and investment products compare to each other even if you are a born-and-raised Canadian. Plus, your saving and investing strategy should be based on your current situation and personal goals, and since there is no one-size-fits-all formula, you should talk to an advisor who can help you create a plan that works for you.
Remember that regardless of the bank you choose, you can take initiative by following these tips:
- Ask questions. Whether you’re opening your first account or asking for more information about a special offer, it is critical that you have a solid understanding of how everything works, including the terms and conditions.
- Take it slow. Bank employees are extremely knowledgeable on the topics of money, accounts and investing, and it’s possible that they move through the information too quickly to truly understand. If there is anything that’s unclear to you at any moment, ask them to slow down and go over it again. It’s critical that you know what you’re signing up for, so don’t be shy to say, “explain this to me like I’m 5 years old.”
Don’t fall victim to financial scams
One last but very important thing: fraud schemes and scams are not a myth. Be very cautious when sharing your personal information online or over the phone. Make sure you know who you’re talking to, and if your gut is telling you that something is off, it probably is. Read more about how to protect yourself and the most recent scams here.
To sum everything up, there is no better time to start investing than now. Remember to do your own research when choosing primary and secondary banks, and don’t forget to ask as many questions as you need to feel comfortable and in control of your financial situation
