Moving internationally can cause financial strain regardless of how much money you have in the bank. On top of that, managing your finances is a skill that requires training and knowledge. Investing time in financial education, especially if you’re moving to another country, can pay great dividends in your future financial health.
Here at Remitly, making smart decisions about money is one of the things we know best. That’s why we aim to share useful tips for our customers on how to manage their finances, even in the midst of an international move. Luckily, if you’re moving to Canada, there are a variety of free literacy classes that can help you manage your money.
Why financial literacy matters
Financial literacy basically means making smart decisions about your money. It means that you fully understand and effectively use various financial skills. These can include financial management, budgeting, and investing.
Financial literacy is especially important as technology continues to develop. In today’s society, money moves in ways that would be alien just a few decades ago. In years past, almost all financial transactions involved physically purchasing goods in a shop with cash. These days, credit and debit cards, as well as electronic transfers, are becoming more popular.
Benefits of gaining financial skills
Developing a sense of financial literacy sets you up for success in the future. Understanding your different financial options and resources can also help you prepare for financially challenging situations, like a job transition or a move to a new country. These are just a few of the many benefits of developing your financial literacy:
- Prevent financial mistakes: Knowing about the different options you have can help you prevent financial mistakes. Being well-informed about credit, saving, and investing can ensure you make smart decisions about your money and your future.
- Prepare for emergencies: Learning about saving, investing, and emergency funds won’t prevent challenging times from coming. You might lose your job, get in an accident, or have unplanned medical expenses. But being prepared for challenges can help you feel less stressed when they do come up.
- Reach big goals: Financial planning can help you identify your goals and develop actionable steps towards achieving them. While big purchases like a car, house, or vacation may seem achievable, with careful planning and financial literacy, they could become realities.
- Increase your confidence: Almost all of our life choices come with financial implications. By informing yourself and developing your financial literacy you’ll have all of the information needed to make these big decisions with confidence.
One of the reasons why Canada is considered a wealthy nation is because of its diversified economy. Based on data from 2024, Canada’s inflation is between 1-3% and there have been strong employment gains, with 330,000 jobs created.
On the other hand, Canada’s economy is challenged by the global decline of oil. This natural resource has historically been one of the country’s most productive industries. Nonetheless, the overall financial strength of the country makes it an attractive destination for immigrants.
Empowering immigrants financially
In Canada, you’ll have access to resources that help you understand and manage your money and finances. The Canadian government specifically focuses on helping people manage their money, debt, and investments. They want to ensure that people living in Canada can prepare for retirement and avoid consumer fraud.
Financial literacy programs empower immigrants by providing them with the information they need to integrate into Canadian society. By planning for your future in Canada, you can ensure that your move is financially sustainable for you. Being smart about your money will also give you the confidence needed to feel like you belong in Canada.
Strategies for financial success in a new environment
- Banking: When you first move to Canada, you’ll want to set up your banking. Banking is broken down into checking and savings accounts. Checking accounts allow you to use a debit card and write checks to make payments. Savings accounts hold your money and usually provide a higher interest rate. Many accounts require fees. You’ll want to select an account type that has the most services for the lowest fee. Pay attention to services that you might be more likely to use, like international transfers.
- Credit score: Since you’re new to Canada, you’ll have no credit history. A credit history is a record of how reliable you are when paying money you owe. Your credit history is based on expenses like mortgage bills, credit cards, utilities, and rent. You’ll want to start building credit as soon as possible. Open a credit card and start using it. Make sure you pay your credit card bills on time and try not to use more than 30% of your allowed credit limit.
- Real estate: If you’re ready to buy a home in Canada and you can’t pay for it outright, you’ll need a mortgage. Getting a mortgage is always easier when you have a credit score. If you don’t have one, you can work with the Canada Mortgage Housing Corporation to figure out other ways to prove your creditworthiness.
- Employment and income: Newcomers to Canada are integral to the job market. They fill the high rate of job vacancies in areas like healthcare, construction, and professional and scientific services. Finding a job is one of the key steps to developing your financial stability in a new place.
Financial education services for newcomers
Even if you have good money management skills, you might consider taking a financial literacy course when you move to a new country. These courses cover basics like budgeting and investing. In addition, they can provide useful information specific to the country to which you’re moving.
Free financial literacy toolkit
The best starting place for financial literacy in Canada is a free online resource called “Your Financial Toolkit.” This is a comprehensive learning tool that provides basic information to help adults advance their financial literacy. You’ll learn how to manage your money and gain the confidence to make better financial decisions.
The financial toolkit is broken down into 12 modules, each focusing on a different topic. Every module involves interactive quizzes, videos, calculators, and questionnaires designed to help you better understand your financial situation. In it, you’ll learn about the following:
- Income, expenses, and budget
- Banking
- Saving
- Credit and debit management
- Mortgages
- Insurance
- Investing
- Income taxes and contributions
- Income taxes and contributions (Quebec)
- Retirement and pensions
- Financial planning
- Fraud protection
You can move through the financial toolkit in order or jump to modules that are more relevant to your situation. The toolkit is available in English.
Further resources
The financial toolkit offered by the government is a great starting point. The following resources might also be of interest to you as you develop your financial plan for moving to Canada.
- The Great Canadian and African Diaspora Foundation. This non-profit organization supports people of African and Caribbean descent living in Canada. They offer free financial literacy resources for new immigrants.
- Money Mentors. This is a non-profit credit counselling agency based in Alberta. They offer a free one-hour course called “Financial Awareness for Newcomers” that focuses on understanding the Canadian banking and credit-rating system.
- Prosper Canada. This is a charity dedicated to expanding economic opportunity in Canada. They have a series of free webinars to help you develop your financial literacy.
Government benefits
As you develop your financial literacy, your skillset will shift from generic to specific. Budgeting and investing skills can help you no matter where you live. But what information do you specifically need to know about Canada to be financially literate there?
Canada’s government provides a variety of financial benefits of which you should be aware. Here is an overview of the most common benefits and where you can find more information about them.
- Employment Insurance or EI. This benefit is for individuals who are unemployed through no fault of their own. This could mean you were let go because of a work shortage, fell victim to mass layoffs, or are available to work but cannot find a job. In order to receive EI benefits, you must have contributed to EI previously. Learn more about EI eligibility here.
- Canada Child Benefit or CCB. This is a tax-free monthly payment made to eligible people living in Canada who are the primary caretakers of any children under the age of 18. If you or your spouse is not a Canadian citizen, but you are legally in Canada, you can apply after you’ve been in Canada for 18 months. You can find out more about eligibility here.
- Student grants and loans. If you or a family member is considering further education, you can apply for funding to help offset tuition costs. Grants are financial support that you do not have to repay. Loans are a form of funding that you’ll have to repay, with the benefit that you will be building your credit score in Canada.
Remitly’s commitment to financial literacy
At Remitly, we have developed a bank of financial information for immigrants, including strategies that can help you identify your needs and build strong financial habits for the future.
The following Remitly guides will be helpful to you as you move forward in your financial journey in Canada.
- How to Open a Bank Account in Canada
- How to Send Money to a Visa Debit Card from Canada
- Popular Online Banks in Canada
- Choosing an Affordable City to Live in Canada
- Smart Finance Tips for Canadian Newcomers
Moving to a new country can be a tricky process. There is a lot to consider, including your financial status. Figuring out the best ways to manage your money in a new place can be tough. Take advantage of all the resources Canada has to offer so that you’re as prepared as possible to make your move!
FAQs
What is a financial literacy program?
A financial literacy program is any class that focuses on managing personal finances. These programs can be conducted in person or online. Some of these programs teach general strategies for managing money, like budgeting, credit development, and investing. Others are specific to particular locations and teach you about government benefit programs and pensions. To find financial literacy programs specific to Canada, click here.
What is Canada’s Financial Literacy Month?
In Canada, November is Financial Literacy Month, which started in 2010. It is a national campaign run by the Financial Consumer Agency of Canada aimed at increasing financial literacy. You can learn more about Financial Literacy Month and how to get involved here.
What is the financial literacy problem in Canada?
Research has shown a poor understanding of financial literacy among many Canadians, particularly in terms of debt management. This is one reason behind the public programs in the country aimed at improving financial skills.
What are the 5 principles of financial literacy?
The five principles or sections of financial literacy are: earn, spend, save/invest, borrow, and protect your money. These can form a basis for a complete understanding of financial skills.