Danger!

Amid the recession, money is tight for everybody. Newcomers to Canada, and more generally immigrants, no matter where they are from, may find making ends meet even more difficult. Indeed, a large majority of them settle in Canada’s largest cities (Vancouver, Toronto, Montreal, Ottawa) hoping for better job opportunities. It makes sense However, life is usually more expensive in urban areas than in rural ones.

Let’s face it, immigration can bring a fair share of financial trouble. First, applying for permanent residence and relocating in Canada isn’t cheap. Then, finding a good job may take time. And above all, managing your money in a new country isn’t easy, as you may not be as “street smart” yet as residents.

Here are five things that may end up straining your finances more than you would have thought.

Transportation: if you live in a very urban area you may use public transportation but beware as it hardly seems to be a priority for a lot of municipal governments. Plus, even public transportation is quite expensive: in Ottawa, a one trip bus ticket is now $2.50 ($3.25 if bought in the bus) and a monthly pass is $91.50. And let’s face it, not matter how you feel about driving, North America is very much a car culture and you may need a car sooner than you would have thought. Sur, gas is much cheaper than in Europe yet distances are longer in average. Driving during the winter also involves unexpected costs such as winter tires, booster cables etc.

Cell phones: I think this is the biggest rip-off in Canada. The three main players, Bell, Telus and Rogers, are quick to lock you into absurd three-year plans (3 years!) with high cancellation fees. You are billed for both outgoing and incoming calls (isn’t that paying twice for the same service?), as well as for checking your voicemail. You are also charged compulsory (and sneaky) monthly fees for call display, 911 access, service maintenance etc. All in all, expect a very basic cell-phone plan to cost you at least $35 a month, and remember that Canada's cellphone rates among highest. On the bright side, for residential land line services, Canadian customers pay the lowest rates among OECD countries.

Heating bills: yes, Canada has long and harsh winters and chances are, you will want to get rid of your jacket, your gloves and your hat indoors – it’s only natural. Apparently, the average heating bill for a Canadian home is $1,800. For us, the highest bill is the February one. But don’t panic, they are steps you can take to make sure you don’t go bankrupt over your heating bill. First, make full use of the suggestions and tips of the Ministry of Natural Resources’ Office of Energy Efficiency. Second, be smart. I’m not saying you should freeze in your place but don’t overheat it. For instance, we use a small portable heater to warm up the bedroom before going to bed. In the summer, air conditioning can be very expensive to run too (not to mention it’s not exactly environment-friendly): be warned!

Promotions: North America is a consumer society and there are always sales, promotions and special offers going on. In a way, it’s good because you can make the most of the competition. However, it can be quite overwhelming. I think it’s good to step back and pause before you buy: do you really need XXX or do you buy it because it’s on sale? The pressure to buy always more is pretty annoying at times. So by all means, do shop around and make full use of special offers, but make sure you don’t actually end up spending money on something you didn’t want nor need in the first place.

Credit cards: I was a credit card virgin when I first came to Canada.  Six years later, I have two credit cards: one that should have been cancelled long ago since I don’t use it, and one with a credit limit much higher than four months of my salary.  The key word, in theory, is self-discipline: do not charge something on your credit card unless you know you can afford it. But more important, make sure you understand the rules of the game credit card companies play. A lot of them use sneaky tricks to make sure you pay more: fluctuating interest rate, late fees, changing payment due date, lowering your credit limit... If there is one agreement to read from A to Z it is this one: your credit card “cardholder agreement”. It’s boring, it’s full of fine print and you’ll squint by the time you are done but it may save you money in the long run.

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