TD offers advice to new Canadians to start establishing a financial foundation
TORONTO, June 28, 2016 /CNW/ - Moving to a new country can offer a wealth of opportunities, but can also come with its own set of hurdles, like learning how to navigate a new financial system. According to a new TD survey, nearly half (45 per cent) of new Canadians said they didn't know where to start when it came to setting up their finances in Canada, and yet almost nine in ten (88 per cent) consider it a top priority to establish good financial standing in their first year after arriving to Canada.
"Starting over in a new country can be daunting, from finding a place to live, locating new schools, learning a new language to navigating a new banking system," said Shirley Malloy, Associate Vice President, Everyday Banking, TD Canada Trust. "Cash flow is often top of mind, but don't let banking fall off the radar. Basics like a chequing account, debit and credit card are essential to day to day life, and securing them early can make it easier to pay for things like rent or groceries, allowing you to focus on building your new life."
After those initial needs are met, Malloy suggests newcomers revisit their finances regularly as their situation evolves and requires more complex financial advice. For example, the survey found the top three financial goals of new Canadians include saving for a down payment (51 per cent), saving for their kids' education (35 per cent) and buying or leasing a car (35 per cent).
To reach these medium to long term financial goals, establishing a positive credit history in Canada is key. In fact, building up good Canadian credit history is often required before buying or renting a home or even securing a mobile phone plan. Eventually, building a healthy credit history opens the door to more relaxed borrowing options, often with lower interest rates.
"Eighty-four per cent of new Canadians wish they had a better understanding of how to build their credit rating," said Malloy. "The reality is that there's no quick fix when it comes to building credit. Over time, practicing sound financial habits like paying your bills on time and in full will naturally result in an improved credit rating."
To start your new life on the right financial foot, Malloy shares her top tips to unpack banking basics in Canada:
- Don't skip banking 101: As a newcomer in a new country, take the opportunity to ask questions about banking in Canada while addressing your immediate banking needs.
- Learn the building blocks: Your credit history from another country is not considered when establishing credit in Canada. That's why it's important practice good financial habits right from the beginning, like paying all bills on time and in full. Setting up pre-authorized debits to pay credit card and other bill balances each month is a simple and effective way to ensure payments are never missed and your credit rating continues to improve.
- Cut the jargon: There are plenty of savings vehicles that make finances easier for Canadians, but you can't take advantage of what you don't understand. An advisor can explain how things like a Registered Retirement Savings Plan (RRSP) or Registered Education Savings Plan (RESP) can help you maximize saving for the future.
- Practice makes perfect: Like many newcomers, you may face compressed timelines to reach your financial goals. For example, in the first five years, you may plan to buy a home, while saving for your child's education and retirement. An advisor can help build a plan for the future to address competing priorities that works for your financial reality.
"Everyone has different financial priorities, so we encourage newcomers to come and talk to us about their personal goals, whether it's buying a car, a home, saving for the future or their children's education," said Malloy. "Especially in the early months, it's important to revisit and revise the plan as the financial situation evolves, and as income, lifestyle and financial goals change."
For more information, visit www.tdcanadatrust.com/newtocanada
About the TD Newcomers Study Poll
TD Bank Group commissioned Environics Research Group to conduct a custom online survey of 502 adults from Tuesday, April 26 – Tuesday, May 10, 2016. In order to qualify for this survey respondents had to be 18 years of age or older, be born outside of Canada and moved to Canada in only the past 5 years.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, plus credit protection and credit travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as at over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
SOURCE TD Canada Trust
Image with caption: "Money Talk for Newcomers (CNW Group/TD Canada Trust)". Image available at: http://photos.newswire.ca/images/download/20160628_C1937_PHOTO_EN_723291.jpg