Key takeaways:

  • Avoid falling into debt by creating a budget that looks at costs vs. income vs. goals.
  • Creating a credit history removes a "risk-factor" from you and allows you to borrow money, get insurance or acquire a mortgage for home purchase.
  • Maintain a good credit history to avoid high interest rates or interruptions of service.
  • Don't misuse credit cards. They will help you build your credit history but should not be treated as a bank with endless amounts of cash. Your debt will get out of hand, and you could hurt your financial goals.

One of the main reasons people come to Canada from other parts of the world is the opportunity to live in a free society where there are many opportunities to grow. Growth can mean many things to many people. You may want to learn and experience a new culture, or you may want to come to a place with a high standard of living, the chance to own a home, and find good job opportunities.

Finances are a big part of that. While the Canada’s economy does provide many opportunities to get ahead and live the “Canadian Dream,” it can also have bumps in the road if you don’t plan carefully. There are things you can do ahead of time, and things you can do once you arrive to avoid making some common financial mistakes.

Let’s dive into how as a newcomer you can avoid making common mistakes with your finances. 


Budgeting is a helpful process that all Canadians should take part in, whether they are new to the country or not. In fact, a survey by Sun Life says that more than 52% of Canadians do not have a financial plan in place. But let's focus on the positive side of things—by creating one, you can unlock many advantages. Why is that so important??

The expenses associated with moving, finding a home to rent or buy, extra costs to run that home (like electricity, cable, internet, water and gas), childcare if both parents are working, new clothes for winter months, and a whole list of new expenses, can get away from you if you’re not careful.

By creating a budget and understanding how much money you need versus how much you are taking in, you can avoid falling into debt or situations where you are losing financial ground barely after you’ve moved here. Budgeting can also show you areas where you can save money, and even put money away for a home, education, or retirement savings, for example.

Of course, everyone is different and so there is no one-size-fits-all budget, but generally newcomers to Canada should look at priorities and goals when starting their budgetary plan. Ask yourself:

  • What are my fixed costs? (The ones that I must pay)
  • What are my financial goals (or priorities) both in the short-term and long-term (a home? an education? starting a business?)?
  • Am I tracking expenses?
  • Can I change spending habits to meet my goals?
  • Do I have a contingency or rainy-day fund in case of emergencies?

Once you have established your budget and priorities, check on it every six months or so to make sure your goals haven’t changed, and your strategy still makes sense. You may have gotten a raise or better job, in which case you could re-direct income to other goals.

Creating a credit history 

Having a good credit history is extremely important. Banks and insurance companies look at risks before lending money or providing services. Having either no credit history or a bad credit history may make it appear like you are a high-risk individual. This could lead to higher costs you when it is time to get car insurance, for example, or prevent you from getting a loan to buy a home or car, or even get a cell phone plan. Building and maintaining good credit can open doors to more affordable options and greater financial flexibility.

That’s why it is so important to build a good credit score, which does take time. Luckily, you can apply for credit cards before you come here. Scotiabank has a number of different credit cards for newcomers, which will help you fast track your credit building history.

Maintaining a good credit history 

It’s one thing to build a history, but another to make sure that is maintained at a high level. Any number of late payments, whether it’s home utility bills, car payments, or late rent, can have a negative impact on your credit history. If you miss payments, you may find that interest rates on credit cards could go up, your utilities could be interrupted or shut off completely, and/or you may be evicted if you miss rent on a regular basis. The long-term effects could be that it becomes more difficult to find companies wanting to do business with you or will charge you high prices because of your risk factor.

Staying on time with payments helps maintain your good standing and, again, indicates that you are a low risk to banks or other lenders/service providers. Many banks, like Scotiabank, allow you to pay bills automatically and on time. You can set up pre-authorized payments and never have to worry about missing a payment and having a bad credit score.

Read the fine print  

Most contracts, for cell phones, rent, insurance, banking products, credit cards and so on, have specific rules and penalties if the rules are not followed. Don’t sign or enter into anything before you know exactly what your payments and/or penalties might be down the road. Take your time. There is no rush and don’t be pressured.

Misusing credit cards  

Yes, credit cards are an important way to help you build a credit history, but there is a downside as well. It is easy to take advantage of what seems like “free money” until the bills roll in. Before you know it, your debt can climb very quickly, if you’re not careful, and the interest rates to support that debt can also be very stressful. In fact, the initial goal of building up good credit could backfire if you are not careful and could possibly hamper your efforts to achieve your financial goals.

The best way to avoid this is either by paying them off each month in full, or by only having one or two that you can manage and not take advantage of for non-essential items.

Not filing taxes  

Not filing taxes isn’t an option. First, you’ll need a Social Insurance Number to file taxes.

Also, there are many benefits the Canadian government offers that will be missed if you don’t file taxes.. Also, by missing the tax-filing deadline, you may be fined or charged interest – only adding to stress and expenses you don’t need.

Not budgeting properly for your move  

International moves cost money. If you don’t prepare properly, you could negatively affect your finances. For example, there are many costs for newcomers to Canada, such as:

  • Shipping
  • Insurance
  • Duty
  • Taxes
  • Visa Fees

Make sure you have made the right calculations for your move so that you come to Canada with a head start on your financial goals, rather than in a difficult situation because of unforeseen expenses.

Ask questions   

Getting a handle on your financial affairs in a new country can be stressful. The good news is that in Canada, banks like Scotiabank will help and support you through your journey. It’s easy to book appointments with advisors, and many banks offer foreign language services to make it easier to understand and ask questions. Advisors can also help map out a budget plan to help you reach your goals and navigate the system to help you achieve your goals.

Overall, your financial journey in Canada should start before you even arrive. Thinking about your finances early and learning about your options will help you hit the ground running when you finally make your move. Everything may still be new and different from your home country, and it won’t necessarily be easy, but it can be easy to get the process going properly if you plan ahead.

One of the best things you can do for yourself is talk to a professional. Scotiabank provides financial planning services and can offer help in many languages. Click here for more information.

Ready to get your finances on track for your future? Come in and speak to a Scotia advisor today