Bad Money Habits Newcomers Should Break in 2026

Between upfront settlement costs, changing income, and new financial norms around credit and debt, it is easy to fall into money habits that do not actually support long-term stability. These habits can be the result of uncertainty, pressure, and trying to cope in the moment. 

This article is not about shaming everyday spending or pushing extreme financial discipline. Instead, it focuses on identifying common money habits that can quietly hold newcomers back—and on how to replace them with systems that support your goals, values, and wellbeing as you settle into life in Canada. 

What Are Bad Money Habits?  

Before we dig into this topic in more detail, we wanted to help relieve some of the money guilt you may be feeling.  

There are some money habits that are ‘bad’ as a general rule – but probably fewer than you think.  

It’s not a ‘bad habit’, necessarily to buy your lunch at work each day. Perhaps it makes you happy, relieves the pressure of home administration, or means you’re able to eat healthier meals than you would have time to prepare for yourself.  

But, this habit does need to be planned and intentional. If you’ve budgeted for it and can absorb the costs, then it’s fine.  

But if you’re buying lunch at work every day due only to poor planning, feeling guilty about it, and racking up credit card to support this habit, then it’s likely slipping into ‘bad habit’ territory.  

So, what’s the difference?  

As we see it, ‘bad’ money habits are those habits that prevent you from achieving your financial goals (whatever they may be), as well as anything that keeps you going into debt or living paycheque to paycheque. They’re often unintentional.  

Having Bad Money Habits Does Not Mean You’re Bad with Money 

If you have some money habits that aren’t supporting your goals or financial wellbeing, it doesn’t mean you’re bad with money or doing a bad job. There are many systemic, emotional, and personal factors that make personal finance and managing your own money really complex. Plus, as a newcomer, much of the Canadian system is likely new to you. This means you have a lot of hurdles to overcome.  

Try not to feel guilty about any money habits you have that aren’t supporting your goals. Again, it doesn’t mean you’re bad with money, it probably just means that you could benefit from:  

• Reading more about personal finance to increase your understanding.  

• Spending some time planning your financial goals.  

• Creating a realistic budget.  

Approach Your Money Habit Building Journey with Curiosity and Compassion 

Money habits do not change because you feel guilty about not doing what you “should” be doing. They change when your financial systems—your goals, your budget, and your understanding—support better decisions by default. 

If you buy lunch one day instead of putting that money toward your student loans, it does not mean you have failed. It simply means you are human, navigating a complex transition. Over time, with clearer goals and a budget that reflects your reality, those decisions become easier and more intentional. 

Progress with money is rarely linear. What matters most is continuing to return to your goals, adjusting when necessary, and giving yourself the space to learn as you go. 

5 Money Habits to Break This Year 

Not Setting Realistic, Achievable Financial Goals 

This is a bad money habit I had when I first arrived in Canada. I didn’t have any real money goals – I just wanted to feel stable. But my reality was that I didn’t start making huge steps in my financial journey until I started setting goals.  

When I knew I wanted to buy a home in the near future, I knew I needed to set aside money each month to help me achieve that. I worked out how much I needed to save each month, what that left me for other spending (after saving for retirement), and considered whether that was ‘enough’ for me to enjoy my life at the same time. Then, I had to frame the rest of my spending around that goal (instead of just saving whatever I had left at the end of the month).  

In my experience, many newcomers either arrive in Canada with ambitious financial goals— or none. You may want to pay off student loans quickly, build savings, support family members, and establish long-term security, all at once. Or you may just want to be able to afford groceries and rent for the next few months, and not really have any goals beyond that.  

These realities offer different challenges. Those with no goals (like me!) often spend aimlessly, and this can even lead to overspending. Those with goals that are too ambitious and don’t leave any room for spending on ‘wants’ also struggle, because their goals don’t reflect what they want their life to look like. 

How to overcome it:
Effective financial goals are specific, time-bound, and scaled to your current circumstances. Rather than aiming to “save more” or “pay off debt faster,” focus on smaller, concrete milestones—such as building a $1,000 emergency fund or reducing one credit balance by a set amount. 

As your situation changes, your goals should evolve. If you’ve realized that your financial goals are not realistic, it can help to revisit and adjust them. This isn’t a failure, it’s an adaption. And adjusting your goals can be a better approach than abandoning them altogether. 

When you have financial goals that feel achievable, you may find that your day-to-day money decisions become easier to sustain. And that’s something we think is worth pursuing!  

Relying on Credit to Cover Everyday Expenses

Using credit cards or lines of credit to manage cash flow is another habit newcomers can fall into. This could be caused by delayed pay cycles, high upfront settlement costs, and unexpected expenses can make credit feel like a necessary safety net. But often newcomers make this mistake purely because learning about managing credit is a skill that takes time and knowledge. For some of you, a system of credit is entirely new! So it’s not surprising that you may make some mistakes and build habits that don’t support your goals along the way.  

Why this becomes a problem:
Using credit regularly, even to buy essentials—groceries, transit, or utilities— can support your cashflow and help you build good money habits over time.  

But, if you’re not able to pay your monthly balance in full at the end of every month, you may be overspending. Overspending each month is a generally seen as a bad money habit that is worth breaking.  

Why? Because if you don’t pay off the full balance, your credit card balance can quietly turn into long-term debt. Getting out of credit card debt can be even more challenging when high interest rates mean that small balances can grow quickly, making it harder to get ahead. 

How to overcome it:
Rather than aiming to stop using credit immediately, focus on setting up systems so you can always pay your balance off in full at the end of each month. Good money habits that support this include: 

• Building a modest emergency fund—even $500 to start.  

• Using a budget that reflects your real income and expenses. This can help you identify where cash flow pressure is coming from, so credit becomes a tool rather than a crutch. 

Avoiding a Budget Because It Feels Restrictive or Overwhelming 

Many people associate budgeting with deprivation or failure. For newcomers, budgeting can feel particularly intimidating because costs in Canada may be higher or less predictable than expected. 

But avoiding any kind of budgeting can leave you feeling less empowered and more ‘in the dark’ about your finances. 

Why this becomes a problem:  

Without a budget, financial decisions are often reactive. You may delay saving, overspend unintentionally, or feel constant anxiety about money. 

How to overcome it:
Reframe your budget as a planning tool, not a set of rules. A good budget should reflect your priorities, including enjoyment and convenience. If buying lunch at work makes your days easier, it may be able to be included – you may just need to cut spending in other areas, like subscriptions, take out dinners, or your clothing budget. The purpose of a budget is not to eliminate spending, but to ensure your spending aligns with your goals. 

Not Adjusting Financial Expectations During the Settlement Period 

Many newcomers arrive with a financial plan that assumes stable employment, predictable expenses, and immediate progress toward long-term goals like paying off student loans or saving for a home. 

Why this becomes a problem:
The first year or two in Canada is often more expensive and less stable than anticipated. It can be helpful to be gentle on yourself during this time. Because holding yourself to unrealistic financial expectations can lead to guilt, frustration, or burnout, and it may negatively impact your wellbeing. 

How to overcome it:
Acknowledge that settlement is a phase – and a particularly tough one at that. It may be appropriate to slow down certain goals while you focus on stability.  

Thinking Debt Is Normal (and Unavoidable) 

In Canada, debt is often presented as a normal part of adult life. “Buy now, pay later” services, long-term and very expensive car loans, and easy access to credit can make borrowing feel routine, even inconsequential. 

For newcomers, this can be particularly disorienting. You may encounter five-, six-, or even seven-year car loans with monthly payments that resemble rent payments. BNPL options may be framed as budgeting tools rather than short-term credit (learn more about BNPL here). Over time, it can be easy to accept ongoing debt as simply “how things work here.” 

Why this becomes a problem:
Debt can quietly limit your financial flexibility. Monthly payments reduce your ability to save, handle unexpected expenses, or adapt to changes in income. While some debt may be strategic and support your goals, carrying multiple forms of consumer debt at once can keep you in a constant state of catch-up. 

How to overcome it:
The goal is not to eliminate all debt immediately, but to become more intentional about which debts you accept. Before taking on new debt, spend some time thinking about how it fits into your broader financial goals and what it limits in return. I personally find a lot of value thinking about how that monthly payment will impact my cash flow each month for the duration of the loan when deciding whether to take on new debt or not. If it seems risky or like it’ll prevent me from enjoying things I really value in the future, it’s not worth it for me.  

A budget can help you see the true cost of monthly payments over time, not just whether you can afford them this month. From there, you can prioritise paying down high-interest or convenience-based debt and avoid adding new obligations that don’t meaningfully support your long-term stability. 

Tips for Overcoming Bad Money Habits 

Breaking money habits is difficult, especially when those habits are tied to stress, uncertainty, or survival. For newcomers, money decisions are often layered with additional pressure: adapting to a new system, supporting family, or managing immigration timelines. 

A few principles can help: 

• Approach change with curiosity, not judgement. Instead of asking, “Why am I so bad with money?” try asking, “What is this spending helping me cope with or solve?” 

• Focus on goals, not individual purchases. One takeaway lunch rarely determines your financial future. Progress comes from repeatedly aligning your spending with what matters most to you. 

• Use a budget as a guide, not a punishment. A realistic budget should evolve as your circumstances change. It is a living document, not a moral scorecard. 

• Make small, sustainable adjustments. Behavioural change is more likely to stick when it is gradual. Reducing a habit is often more effective than trying to eliminate it overnight. 

Finally, know that changing money habits is rarely about willpower. It is about building systems that reflect your real life, not an idealised version of it.  

If some of your money habits are not currently supporting your goals, that does not mean you have failed. It means you are adapting. With clearer goals, a realistic budget, and a compassionate approach to change, it becomes easier to make decisions that serve both your present needs and your future plans. 

Financial progress does not require perfection. It requires consistency, reflection, and the willingness to adjust as your life in Canada takes shape. 

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