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Inflation is on pretty much everyone's mind these days. Yes, wages are going up, but often not quickly enough to catch up with rising costs, making it more important than ever to make the most of your earnings and capital.

And if you’re thinking of moving to Canada—or moved to Canada within the last few years—your financial situation comes as part of the package when deciding where to live, what to bring, which direction to take your career, and what you can purchase.

Moving costs money, that’s a given. But it also allows you to explore a world of new opportunities. With the right tools, you can make 2023 the year your money starts working for you, not just the other way around.

Here’s how you can do just that.

1. Open your Canadian bank account

A business man typing on a laptop computer.
You can set up your Canadian bank account online before you arrive in Canada.

A lot of newcomers to Canada don’t realize that they can open a chequing account before even arriving in Canada, or that they can open a new-to-Canada chequing account many years after arrival. (Psst! If you arrived within the last five years, you might still be considered a newcomer.)

Getting a Canadian chequing account is the first step in managing your finances. In addition to setting you up to make day-to-day purchases, bill payments, and set up payroll for direct deposits, a chequing account also sets you up to get a credit card and build your Canadian credit history. More on why that’s important later.

2. Build a credit history in Canada

A suburban household.
A good credit score can help you get loans for big purchases such as a house or a car. Even some landlords conduct a credit check before renting an apartment.

This cannot be stressed enough. If you’re going to be in Canada long term, it is important to have a good Canadian credit history, and to start as soon as possible. If you ever want to access credit for big-ticket items such as property, a good credit score is nigh-on essential.

Canadian residents—including immigrants—get a score between 300 and 900 based on their credit history. A higher score shows a Canadian creditor that you can be trusted to pay back your dues. It can come into play anytime you are trying to buy or rent a home, purchase a vehicle, get a loan (including a credit card), or even a phone plan.

Some of the factors that affect your credit score include:

  • How long you’ve had credit in Canada
  • What type of credit you use
  • If you miss payments (loans, utilities, etc.)
  • Your debt
  • How many times you’ve applied for credit
  • If you’ve ever been declared bankrupt or insolvent
  • The length of time each credit account has been registered on your credit report.

All of these factors can be viewed on your credit report, which is a summary of your credit history.

Canadian credit scores and histories are maintained by two main credit bureaus: Equifax and TransUnion. Typically, these bureaus only recognize financial experiences that take place in Canada, which means that when you first arrive you may need to start fresh.

3. Choose the right investment options that suit your goals

A woman looking at a computer screen. Her finger is on her chin and she appears deep in thought.
Canada offers a number of investment options that can help you grow your wealth.

There are a number of different investment options available to newcomers in Canada. Let’s discuss a few that you’ll want to know about right away.

Guaranteed Investment Certificates (GICs) are for people who are looking for a low-risk investment with less volatility than other options. As the name implies, it offers a guaranteed rate of return, albeit lower than what you might get with stocks, bonds, or mutual funds.

A Registered Retirement Savings Plan (RRSP) is an account that you can use to save for retirement. It can hold a variety of assets such as GICs, mutual funds, stocks, bonds, and cash. What’s particularly great about RRSPs is that your contributions are tax deductible and you don’t have to pay tax on any earnings from investments, as long as those earnings stay in your RRSP. Although there’s a limit to how much you can deposit every year, the amount you do put in gets subtracted from your overall taxable income. So if you make $85,000 per year and you put $10,000 into an RRSP, you get taxed as though you made $75,000 that year, for example. The downside is if you withdraw from your RRSP you get taxed on that withdrawal as income. You can withdraw up to $35,000 for a down payment on a house tax-free, but you will have to pay it back within 15 years.

Then there’s the Tax Free Savings Account (TFSA), which allows you to invest money tax-free. Each year after age 18 you have an annual contribution room for your TFSA. If you don’t max out your contribution one year, it gets rolled over onto the next year—meaning you could potentially put in more that year. But, if you exceed your contribution room you will have to pay tax.