Budgeting Tips Based on Canada’s National Spending Trends

The data shows that newcomers tend to underestimate the costs of moving to and living in Canada – and that newcomers often experience a crisis of (lack of) confidence when it comes to money during those first few years in Canada.

Fortunately, data from Statistics Canada offers a window into how Canadian households spend their money. The most recent data from 2023 shows average annual spending of $76,750 per household. This number includes everything: rent, food, transportation, recreation, health, and more.

So, how can you use this information to manage your money more confidently? Let’s break it down and show you how to build a smart, flexible budget that works for newcomers.

Canadians Spend Most on Shelter, Food, and Transportation 

According to the 2023 StatsCan data, the three biggest spending categories were: 

• Shelter: $24,671 (32.1%)

• Food: $12,046 (15.7%)

• Transportation: $12,090 (15.8%)

Together, these essentials account for more than 60% of total household spending. 

For newcomers, that means you’ll likely spend most of your money on rent, groceries, and getting around — whether that’s by transit or car. These are non-negotiable expenses, but there are ways to manage them more effectively: 

• Shelter: Rent is typically your biggest cost. Consider house-sharing, living further from city centres, or looking in smaller cities with lower rental prices. 

• Food: Shop at discount or ethnic grocery stores, cook at home, and make use of meal planning apps to reduce waste. 
• Transportation: If public transit is available, use it. Buying a used vehicle or exploring ride-share options can help if you need a car, because car ownership in Canada can be very expensive when you add the costs of parking, insurance, registration, upkeep, and buying and maintaining two sets of tires in some areas (winter and summer tires).  

The 50/30/20 Rule: A Simple Way to Structure Your Budget 

One way to check if your spending is balanced is to use the 50/30/20 rule. This rule recommends:

• 50% of your income on needs (rent, food, transport, insurance, utilities)

• 30% on wants (dining out, entertainment, travel)

• 20% on savings and debt payments.

Based on the national averages, many Canadians are exceeding the 50% mark for “needs” — largely due to rising housing and food costs. Newcomers may face similar pressure, especially when starting out with a limited income. 

If you’re spending more than 50% on essentials, that’s okay — but it helps to recognize it early and make room in your budget by trimming non-essentials where you can. If you’re consistently spending more than 60% on essentials, you’ll likely start to feel financial stress.  

Setting Up a New Home? Don’t Forget These Costs 

Another major category in the data is household operations, furnishings, and equipment, which totalled $9,404 per household in 2023. This includes:

• Cleaning supplies 

• Internet and utilities

• Furniture, appliances, and home maintenance.  

Newcomers often underestimate how much it costs to set up a home from scratch. Even basic items like a bed frame, vacuum, or kitchen utensils add up quickly. 

Tips to Save

• Use promo code M2C2025 for your first month free with oxio for your home internet.
• Check out local buy-and-sell groups (Facebook Marketplace, Karrot, Craigslist, or community bulletin boards).
• Visit thrift stores or discount retailers to save on essentials. 
• Look for local “free stuff” groups — many people give away household items in good condition (you can find these on Karrot too). 

Other Spending Categories You Should Plan For

While basic needs take priority, there are other essential areas to budget for: 

• Health care and personal care: $4,947/year
  If you don’t have provincial health coverage yet, or need services that aren’t covered, private health insurance can help protect you from high medical costs. We’ve partnered with Cigna Global, a trusted insurer that provides coverage for people and families who plan to live in Canada for 4+ months.  

• Personal care may include haircuts, toiletries, and over-the-counter medications. 

• Recreation: $5,231/year
  This covers movies, outings, hobbies, and subscriptions. Recreation matters for mental health, especially during your transition to a new country — but it’s also an area where you can scale back if needed. 

• Other: $8,361/year
  This catch-all category may include gifts, education, or child-related expenses. It’s a reminder to plan for occasional, irregular costs. 

Building a Budget as a Newcomer

Let’s say you’re earning around $50,000/year after tax. Using the 50/30/20 rule, here’s how you might aim to divide your spending: 

• $25,000 for needs (rent, groceries, transit, phone, insurance). This will likely mean living in shared accommodation in Toronto or Vancouver, or moving somewhere a little more affordable. Check out our partners at Rentals.ca and Sparrow Share to learn more about your accommodation options.

• $15,000 for wants (takeout, movies, short trips, gym).

• $10,000 for savings and debt (RRSP, emergency fund, student loans). 

In reality, high rent and food costs might push your “needs” above 50%. That’s okay — the point is to adapt the rule as a guideline and make sure you’re not overspending in areas that don’t reflect your priorities or long-term goals. 

How To Stretch Your Budget Further in Canada

The best way to make your money work in Canada is to understand where it goes. The national data from Statistics Canada isn’t a rulebook — it’s a reference point. 

By tracking your own expenses and comparing them to national averages, you’ll get a clearer picture of your financial health. And once you know your numbers, you can start making small changes that add up over time — whether that’s switching grocery stores, finding cheaper internet, or committing to regular savings. 

Budgeting is a skill, not a one-time task. And like any skill, it gets easier the more you practice.