At Remitly, we understand that managing rent and utility costs is a crucial part of achieving financial stability as a newcomer to Canada. Finding affordable housing and keeping monthly expenses low is vital for easing your transition into Canadian life.
With the right strategies, you can reduce your expenses and better manage your budget. We’re here to provide guidance and help you take control of your finances so you can build a stable and comfortable life in Canada.
Smart strategies to save on rent in Canada
With rental prices and utility costs varying significantly depending on the province and city, newcomers often face challenges in understanding these fluctuations. Knowing how to navigate these costs will give you the confidence to make informed financial decisions.
1. Pick the right neighborhood
Where you choose to live, whether it’s Toronto, Vancouver, Calgary, or Montréal, has a huge impact on rental prices. Here’s how to find affordable housing options:
- Look beyond downtown: Popular downtown areas, such as Downtown Toronto, Vancouver’s West End, Calgary’s Beltline, and Montréal’s Ville-Marie, come with a hefty price tag. Check out neighbourhoods just outside the main hub, and you will find more affordable renting options close to public transportation, green spaces, and stores.
- Explore growing areas: Up-and-coming neighbourhoods often start with lower rental prices before they become trendy. Look for areas undergoing revitalization.
- Talk to locals and use rental reports: Ask current residents or browse neighbourhood guides and related articles to find hidden gems with lower costs but great amenities. Also, keep in mind that rent control laws vary by province.
2. Negotiate your rent and lease terms
Many renters don’t realize they can negotiate rental terms with landlords. Here’s how:
- Do your homework: Research similar rentals in your area and use that data to request a fair security deposit rate.
- Offer lease stability: Landlords prefer reliable tenants. Suggest a longer lease term in exchange for lower monthly rent.
- Negotiate to fit your budget: If the rent payments are slightly out of your price range, ask if the landlord could adjust the price or include utilities to make the new home more affordable.
3. Use deposit alternatives
Traditional security deposits can be a financial burden, but alternatives exist:
- Surety bonds and tenant insurance: Instead of a lump-sum deposit, some services allow you to pay a small monthly fee to cover potential damages.
- Lower upfront costs: These alternatives free up your cash for other expenses, making it easier to start a new life without breaking the bank.
4. Consider shared living arrangements
Sharing a rental with roommates can dramatically cut your costs. Benefits include:
- Split rent and utilities: The more people in the unit, the lower your share of rent and bills.
- Shared household expenses: Groceries, utilities, cleaning supplies, and internet costs can be divided, saving everyone money.
Reducing Utility Bills in Canada
With the rising cost of living in Canada, reducing utility bills is a practical way to save money without sacrificing comfort. Here’s how:
Energy-efficient practices
Hydro and heating costs make up a large portion of monthly expenses, especially during Canada’s harsh winters. Implementing energy-efficient habits can significantly reduce your bills:
- Upgrade to energy-efficient appliances: Older appliances tend to consume more electricity. Look for ENERGY STAR-certified refrigerators, washers, and dishwashers, which use less energy and can lead to noticeable savings over time.
- Improve insulation and seal drafts: A well-insulated home stays warm in the winter and cool in the summer, reducing the need for excessive heating or air conditioning. Seal any drafts around doors and windows with weather-stripping or caulking to prevent heat loss.
- Use a programmable thermostat: In Ontario, Time-of-Use (TOU) rates mean electricity is cheaper during off-peak hours, so running smart thermostats that can automatically adjust temperatures strategically can save money. Many provinces also offer rebates for energy-efficient upgrades like smart thermostats.
- Switch to LED lighting: LED bulbs use up to 75% less energy than traditional incandescent bulbs and last much longer, making them a cost-effective choice.
Minimizing water usage
Water bills can quickly add up, especially in cities with metered water systems. Cutting down on water waste benefits both your wallet and the environment:
- Fix leaks immediately: A dripping tap or leaky toilet may not seem like a big deal, but it can waste thousands of litres of water per year. Addressing leaks promptly can prevent unnecessary charges on your bill.
- Install low-flow fixtures: Low-flow shower heads, taps, and toilets can significantly reduce water usage while maintaining strong water pressure. These upgrades are easy to install and can save hundreds of dollars annually.
- Run appliances efficiently: Wait until your dishwasher and washing machine are fully loaded before running them. Washing clothes in cold water instead of hot can also reduce energy costs.
- Adopt water-saving habits: Simple changes, like turning off the tap while brushing your teeth, limiting showers to five minutes, and using a broom instead of a hose to clean driveways, can add up to significant savings over time.
Cost-effective internet and cell phone plans
Monthly internet and cell phone bills can be a hidden financial drain, but there are ways to cut costs without sacrificing quality:
- Evaluate your usage: Before choosing a plan, determine how much data, talk time, and internet speed you truly require. Many people overpay for services they rarely use.
- Compare providers regularly: The telecommunications market in Canada is competitive, and providers frequently offer promotions or discounts. Shopping around and comparing plans can help you find a better deal.
- Bundle services for discounts: Many providers offer discounts when you bundle internet, mobile, and home phone services. If you need multiple services, bundling can be a cost-effective option.
- Consider prepaid or lower-tier plans: If you don’t use your cell phone for frequent calls or data-heavy tasks, prepaid or budget-friendly plans might suit your needs better than expensive unlimited plans.
- Negotiate with your provider: Many companies are willing to offer better deals to retain customers. If you’ve been a loyal customer, calling your provider and asking for a discount or promotion can lead to lower monthly bills.
Creating and Maintaining a Budget
Follow these simple steps to build your budget from zero.
- Step 1: Calculate your income
- Step 2: Track your expenses
- Step 3: Set financial goals
- Step 4: Choose a budgeting method
Prioritizing expenses
Once you know where your money is going, it’s time to decide what’s most important.
Essentials come first
Make sure the basic needs in your new country are covered before anything else. These include:
- Rent or mortgage
- Groceries
- Utilities (electricity, water, Internet)
- Transportation (car payments, fuel, public transit)
Tackle debt and build savings
If you have credit card debt or student loans (such as OSAP), include debt repayment in your budget. Start by paying off high-interest debts first to avoid extra costs and improve your credit history.
At the same time, set aside money for savings. Aim to build an emergency fund with at least 3–6 months’ worth of living expenses. This will help in case of unexpected expenses like car repairs or healthcare costs.
Tools and resources for budget management
Keeping track of your budget is easier with the right tools. Check out these handy budgeting apps:
- Mint: Tracks your spending and categorizes expenses automatically.
You Need a Budget (YNAB): Helps you plan ahead and avoid living paycheque to paycheque. - KOHO: A Canadian app that helps track spending and offers cash back rewards.
Additional Tips for Newcomers in Canada to Save Money
Moving to a new country can create financial strain, especially if you live in one of the more expensive areas. Here are some ways you can cut back.
Grocery shopping and meal planning
Food is a major expense, but smart shopping and meal planning can help you save significantly.
- Buy in bulk
- Shop smart and use flyers
- Cook at home
- Reduce food waste
Utilizing community resources
Newcomers can access many free and low-cost resources to help with settling in.
- Visit food banks and community programs
- Explore free local events
- Use public libraries
Transportation and travel savings
Getting around Canada can be costly, but there are ways to save.
- Use public transit
- Carpool or ride-share
- Find travel discounts
Resources for Continued Financial Success
Managing your finances is a lifelong process. Here’s how you can build a strong financial future in Canada.
Long-term financial planning
Planning for the future starts with small steps today. A solid financial plan helps you stay on track and prepares you for unexpected expenses.
By setting clear financial goals for the next five, ten, or twenty years, you can decide the best way to plan and save. Are you saving for a house, your child’s education, or retirement? Setting goals helps you create a plan that suits your needs.
It’s a good idea to start investing early so that your money grows over time. Consider options like Tax-Free Savings Accounts (TFSAs) or Registered Retirement Savings Plans (RRSPs) to save for the future while reducing your tax bill. If you’re unsure where to start, speaking with a financial advisor can help.
Where to find support and guidance
There are many free and low-cost resources in Canada to help you with financial planning.
Government resources
Canada offers many free and low-cost resources for financial planning.
- Benefits finder tool: helps you find government benefits and financial assistance
- Financial Consumer Agency of Canada (FCAC): provides guides on budgeting, saving, and credit management
Community and non-profit support
Many organizations offer free financial literacy programs and counseling:
- Credit counselling Canada: provides free advice on debt management, budgeting and improving your credit score
- The Canadian Association for Financial Empowerment (CAFE): offers workshops and resources to improve financial knowledge
Community financial institutions and banks
Most banks and credit unions offer free financial planning services, helping you set financial foundations and manage investments. Some options include:
- TD Wealth Financial Planning: provides personalized financial planning
- Manulife Financial Planning: offers resources for saving and investing
FAQs
What is the 30-day rule to save money?
The 30-day rule helps prevent impulse spending by making you wait 30 days before buying a non-essential item. If, after 30 days, you still feel the purchase is necessary and it fits within your budget, you can go ahead. If not, you’ve saved money by avoiding an unnecessary expense.
How can I save on rent in Canada?
You can save on rent by living with roommates, choosing a rental outside major city centres, or negotiating with your landlord for a better rate. Some government programs, like the Canada Housing Benefit, offer financial assistance to low-income renters.
How can I reduce bills in Canada?
To lower monthly bills, cancel unused subscriptions, negotiate better rates on phone and internet plans, use energy-efficient appliances, and take advantage of government rebates. Bundling insurance policies and cutting down on water and electricity use can also help reduce costs.
How can I save electricity at home in Canada?
Saving electricity can be as simple as unplugging electronics when not in use, switching to LED bulbs, running appliances during off-peak hours, and using a smart thermostat. Washing clothes in cold water and being mindful of heating and cooling can also lead to significant savings.