Between 2006 and 2011, about 1,162,900 people immigrated to Canada, according to Statistics Canada.
But these newcomers face a myriad of challenges. In fact, they have a tough time finding employment (46%), learning a new language (26%), and with financial constraints (11%), finds a BMO Wealth Institute survey.
“Immigration is important to Canada’s growth and future prosperity,” says Chris Buttigieg, senior manager, Wealth Planning Strategy, BMO Financial Group. “Starting a new life in Canada can be an exciting experience, but there are many unknowns and challenges to adapting to a new country.”
The report examines the top financial priorities of two communities in particular: new Chinese-Canadians, and South Asian-Canadians. This includes:
- having enough money to cover daily expenses (88% and 87%, respectively);
- saving for children’s education (64% and 79%, respectively);
- saving for illness (60% and 79%, respectively);
- saving for retirement (61% and 67%, respectively); and
- saving for parents’ retirement (55% and 73%, respectively).
Here are four tips to help these newcomers.
1. Establish a credit history: Tell them to build a good credit history as early as possible. Start with a small line of credit or credit card, and then pay off balances as required.
2. Build a budget: Help them keep track of all expenses and cash flow.
3. Know your tax obligations: As new residents, these clients will be responsible for paying taxes on all of their worldwide income. Connect them with a tax professional to discuss the foreign property they own.
4. Develop a financial plan: One way to help clients achieve their financial goals is to minimize the amount of tax payable on income earned each year. TFSAs and RRSPs are key tools to consider.