New to the country? Chances are that your to-do list feels endless. From your job or apartment search to language classes, the days are busy and life can feel overwhelming. On top of that, establishing a financial foundation while navigating a new system can be challenging.
On the latest episode of the Moolala: Money Made Simple podcast, Credit Canada CEO Bruce Sellery discusses how newcomers can be financially empowered with Andrea Fiederer, Chief Vice President and Chief Marketing Officer for alternative loan provider easyfinancial.
In the interview Andrea shares easyfinancial’s industry findings about the newcomers’ financial journey in Canada, and strategies to help newcomers become financially empowered.
What is Financial Empowerment?
Financial empowerment is when you feel both informed and confident about your finances, as well as prepared to make financial decisions that nurture your stability and lifestyle.
“[Financial empowerment] is the ability not just to provide education about personal finances, but also to ensure that people have the tools and resources to change their behaviour for the long-term.”
This goes beyond educational resources like articles and videos. It’s about having access to tools that make you feel in control of your finances. A financially empowered person knows what they need to do to manage their finances confidently.
But immigrating to a new country can present significant barriers.
In fact, in their recent survey easyfinancial found that only 1 in 5 newcomers feel comfortable with Canada’s financial system. Additionally, three-quarters are looking for more knowledge about credit building, credit scores, and how to access loans.
So, how do we tip the balance and financially empower newcomers?
Strategies for financial empowerment if you are a newcomer
Financial literacy speaks to knowledge, but financial empowerment is the ability to apply that knowledge to decisions that improve your financial life. Here are 7 strategies to help you feel financially empowered as a newcomer to Canada:
1. Understand the Canadian Financial System
This is the most important foundation for financial empowerment as a newcomer. Without a solid understanding of Canada’s financial system, newcomers risk making early mistakes that can set them back years.
“One of the key things that we found was that only 1 in 5 newcomers to Canada who have been here for two years feel comfortable in the financial system and how to navigate it,” said Andrea.
What kind of bank account products do banks offer? What’s the prime rate for mortgages? How do living costs in Canada impact your monthly budget?
The help answer these questions, seek out reliable resources; here are some that will help you get started:
- Understanding the Canadian Banking System: A Guide for Newcomers to Canada, for an overview of the banking system
- The Financial Consumer Agency of Canada (FCAC), for more detailed resources about banking, payments, mortgages, and financial literacy in Canada
2. Secure employment income
It’s likely that you’ll be looking to secure employment and bring in income as soon as you arrive, but the job-seeking process can also present unique challenges.
Newcomers contribute to Canada’s highly skilled workforce, yet they face some of the highest unemployment rates in Canada during their first five years in the country. Hundreds of Canadian employers (like easyfinancial) seek to hire newcomers, however, barriers like language and inaccessibility hinder newcomers from easily finding those opportunities.
A great place to start is online. Indeed Canada offers job search resources for newcomers, like resume prep, interview tips, and even career coaching. You can also check out Credit Canada’s webinar about credit history and job searching for newcomers.
Speaking of credit history?
3. Build a credit history
Did you know that your credit score can impact your candidacy for some job roles? Of course, that’s not the case for all career choices — but we can’t understate the importance of developing credit in Canada as a newcomer. It’s necessary to access housing (landlords almost always conduct a credit check), credit cards, personal loans and lines of credit, and, eventually, mortgages. You might have a stellar credit score in your home country, but Canada doesn’t recognize it. Meaning? You need to start from scratch.
In the interview Andrea shared that “Banks decline anybody that has a credit score under 720 — over 8 million Canadians. The way that people build their credit is actually taking out credit. When you have payments reported to the credit bureau, you’re able to build their credit over time.”
The problem? Newcomers can’t build their credit if they can’t access the credit they require to start building it! That’s where non-traditional lenders like easyfinancial can support newcomers, and 1 in 3 of their newcomer clients move on to prime lenders eventually:
“We provide access to non-prime Canadians who are declined and denied credit access to the banks every single day. Our goal is to graduate our customers back to prime lending (at banks).”
If you’re interested in learning more about credit history, we recently released an e-learning course to help newcomers like yourself discover clear paths to build credit in Canada. The course shares tips on types of credit-building products to consider, payment tips, and how banks assess creditworthiness.
4. Learn effective budgeting
New microwave, visa fees, public transportation, rent — these expenses can quickly add up for a newcomer. Pair that with limited income from your savings as you embark on a job search, and budgeting becomes crucial.
Start recording your income, savings, and monthly expenses in a clear budget to improve your financial awareness. Credit Canada offers a completely free budgeting template that caters to different lifestyles and expenses seamlessly.
5. Look for newcomer-specific assistance and financial products
Canada might be behind in terms of newcomer credit history, but some organizations exist entirely to bridge that gap. One example Andrea brings up is Nova Credit:
“Nova Credit is new to Canada — their whole view is that they want to make sure that if somebody has built up great credit in their country of origin, that could follow them to the new country they come to,” explains Andrea.
Finally, the Canadian government offers various financial assistance like tax credits, child benefits, and other grants that can mitigate the financial burden of moving to a new country.
6. Network and tap into community support
Beyond financial struggles, every newcomer feels a cultural and community challenge that comes with leaving everything you knew behind. Luckily, Canada is well-known for its diversity, meaning there’s always someone from home close by.
“Every country in the world has different views of credit, debt, how to use cash — you don’t get that from a textbook. That’s someone’s lived experience in a country,” says Andrea.
So why not learn about others’ lived experiences in Canada? Tap into cultural associations and local organizations to help you connect with other newcomers. You can also visit the Immigration, Refugees and Citizenship Canada (IRCC) website for a listing for newcomer services that might be helpful.
7. Keep learning with Credit Canada
The newcomer’s journey is a long process, but you have support. Credit Canada is the country’s longest-standing non-profit credit counselling agency and we take pride in educating Canadians to give them control of their finances.
Explore our educational newcomer resources for tools and guides to feel more familiar with Canadian finances.
Credit Canada also offers free, confidential credit counselling services to Canadians and newcomers alike.
If you ever need support handling debt, building a budget, or navigating the Canadian financial system, our certified credit counsellors are just a phone call away. Talk to a credit counsellor today!
This blog has been sponsored by easyfinancial
At easyfinancial we believe everyone deserves fair access to credit, and since our inception we have worked with customers like you to make that a reality. We provide financial relief and a second chance when banks aren’t an option.
We choose to see beyond your current situation and look towards your potential for a tomorrow that includes improved credit and financial stability.
