Okay, we get it, the economy sucks. Every single day we are bombarded with stories of people losing their jobs, houses being repossessed and unhappy employees because “in this kind of economy, you don’t complain if you have a job in the first place”.
But at the same time, Christmas shopping is underway in most parts of North America and a lot of consumers took advantage of Black Friday and Cyber Monday deals.
So, how to not become poor in Canada? How to manage your money smartly?
Here are ten useful tips.
Get familiar with local products – Thanks to globalization, newcomers to Canada will likely be familiar with some brands sold here. Yet, a lot will be totally new. I strongly recommend you to adapt to local brands and products as soon as you can for two main reasons: first, foreign brands and imported products are typically more expensive; second knowing the prices of local products will help you budget in the long run.
Pack your lunch – You can never go hungry in Canada. There are fast-foods, restaurants, cafés and food courts everywhere and grabbing something on the go is always easy—easier than packing lunch, that is. But even though your daily $5 lunch may sounds cheap, it adds up. Besides, eating out all the time isn’t usually good for your waistline. Do yourself a favour and pack your lunch most days of the week to save both money and time at the gym later on.
Use your credit card wisely – You will need a credit card sooner or later to build your credit history, make online purchases etc. Credit cards are great financial tools but learn to use them wisely, especially if it’s your first one. Always pay the balance in full at the end of the month, don’t apply for too many cards and track your spending to avoid a big surprise when receiving your monthly statement.
Use cash – Most Canadian pay with debit or their credit card because it’s very convenient. However, bank fees can add up and it’s easy to lose track of how much you spend. A few years ago, I decided to withdraw a fixed sum every two weeks (usually between $200 and $300) to pay for all of my purchases, minus gas and monthly bills. I definitely spend less this way and I always know exactly how much money I have left for these miscellaneous purchases.
Monitor your bank fees – Bank fees can really add up. For credit cards, compare their perks wisely: some are free while others have an annual fee (usually between $30 and $100). It may be worth paying the fee if the card offers interesting rewards. Otherwise, stick with the cards with no annual fee. Make sure you select a banking package that fits your need: most banks offer up to ten transactions at no fee and then charge about 50 cents for each transaction. If you use debit a lot, pick a package with unlimited transactions. Finally, make sure to withdraw money at your bank’s ATMs, otherwise a service charge may apply.
Consider shopping in the U.S. – Even though the US dollar and the Canadian dollar are almost at par, Canadian prices are sometimes ridiculously higher than south of the border. Typical example: books. I usually buy them from Amazon.com. Even after shipping fees, it works out to be cheaper than buying them in Canada.
Resist social pressure – In North America, consuming is almost seen as a patriotic thing to do—yes, you’re helping the economy! But for your wallet’s sake, learn to resist social pressure and marketing tricks. For instance, the year is an uninterrupted series of events to celebrate: Thanksgiving, Halloween, Christmas, Boxing Day, Valentine’s Day, etc. You certainly don’t have to splurge every time. Similarly, new needs are constantly created by marketing campaign. For instance, while I encourage newcomers to buy a warm winter coat, most of us living south of Nunavut do not need a $700 parka designed for Arctic expeditions. Especially if you live in Toronto.
Learn to negotiate – If you are a good customer, take advantage of it and negotiate. For instance, when I switched bank, I made sure the new bank waived all banking fees for a year. It never hurts to ask for perks and special offers. Competition is stiff and good customers can sometimes be rewarded.
Take advantage of reward cards – Before the program changed for the worse, I had a free Shopper Optimum card and regularly got $5 or $10 off my purchases, with little to no efforts. I now have a Scene card and I regularly get free movie tickets just by using my debit card. Figure out what reward program works for you and take advantage of the perks!
Do you have any money tips for newcomers to Canada? How do you save money here?