5 Things That Get You In Financial Trouble

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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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About Author

French woman in English Canada. World citizen, new mom, traveler, translator, writer and photographer. Looking for comrades to start a new revolution.

22 Comments

  1. Interesting post here. I guess every locale has its plus points and minus points: here we have an arrogant municipal council and police office that’s only open weekdays, and in Canada you have shockingly expensive and frankly abusive mobile phone contracts, and costly public transport.
    🙂
    .-= Lis of the North´s last blog ..Fed up to the back teeth =-.

  2. Excellent points.
    As for credit cards, I have always paid off the balance very month – never paid any interest. (They don’t make much money off me!) I have taught my children to do the same. Of course, in order to do this one must listen to your advice – “…do not charge something on your credit card unless you know you can afford it.”
    .-= Beth´s last blog ..Serves Me Right (or Wrong) =-.

  3. Zhu is right, the fees for permanent residence can be a killer and that doesn’t take into account the weird sized photos required (I eventually photoshopped some of my own for my family), paying for documents (birth certificates,school transcripts), the doctors exams/lab tests etc.
    The Right of permanent residence fees is less now though, about half of what I believe it was years ago. For my family of five I probably spent around $4000 plus on fees, tests, papers and such.
    And this doesn’t take into account your “proof of funds” that you must make. You need a bank statement to prove to the canadian government you can support and sustain yourself and your family for 6 months- ’cause they aren’t helping you! Not at first at least! I needed more that $23,364 in the bank and “ready to go” for immigration!
    Cell phones are a ripoff in the USA too. They have no incentives to compete and they have the market cornered. Home phones are pricey too since all the new costs of supporting wireless is taxed onto landline owners (like 911 wireless support).So a $40 verizon bill ended up being $75 with all the taxes,fees and levies.
    The only good thing to happen in the US is that the new credit card laws prevent all the “fine print” on statements, prevents them from jacking up your rate if you screw up by a couple days and prevent them from jacking up your other cards if you mess one up. Not perfect but better.

  4. A friend who stays in Aussie told us their heating bills never went down because winter – they on the heater and summer the aircon so ya….I can understand that.

    In Singapore since it is hot all year round, in my household the aircon is on when it is extremely hot 😉

    For Cell Phone subscription, I am lucky to tie in with my company’s corporate plan so it is affordable. But now that my two girls are also having their own cell….their text messages can be very high and I am constantly reminding them to text wisely & when necessary 🙂

  5. @Nigel Babu – Wow… if only Canada had this kind of cellphone freebie! Yes, you are in for a shock if you come here! 😆

    @Lis of the North – No way, a police office closed on WE? Wow, I have never heard of that! So I assume it’s crime-free on statutory holidays too, right? 😆

    @Beth – I’m the same, I pay off my balance (which is ridiculously small anyway) every month. I’m not going to pay interest on that!

    @rich b – I think a lot of people forget how expensive immigrating can be, and I’m just talking about the paperwork. And the pictures, of course…! So many places in canada make big bucks selling two passport-sized pictures for $20. I mean, seriously…!

    I was lucky as most of the documents I needed to submit (like the security clearance for France) were free (thank you France!). And I paid the full price for landing fee, it was only lowered after I arrived.

    @shionge – I try not to use the air-con too much, the air is too dry I find anyway. But summers in Ottawa can be extremely hot and humid, 35C is quite common.

  6. Lot’s of useful things in this entry for a future immigrant! The cell phone costs made me sweat. Coming from the third cheapest country on the list makes me wonder why people don’t protest by using stationary phones instead. Or is that even more expensive? For some reason I thought that both the US and Canada are countries where most things are very cheap, but looking into it I realize that living in Europe is cheaper. Yes, we pay 30% tax here in Sweden, like in Canada, but we get a lot for those money. Yes, we pay 20 dollars when we go to see the doctor (until we’ve paid 250, and then it’s free for the rest of the year. Same with meds) but we don’t have any monthly medical fee. Food in the schools are free, and also going to university. I think it’s the same system in the rest of Europe too. This makes me think that I need a higher salary than I thought and maybe I even need to work extra too, which I’m not used to. Thanks for giving me a headache 😉
    .-= Rosita´s last blog ..Success stories – and others =-.

  7. @Rosita – Sorry foe giving you a headache! 😉

    I have never been to Sweden but I was in Finland a couple of years ago, and I’ve been told the standard of living is quite similar to Sweden. To me, Finland was extremely expensive, probably the most expensive country I’ve been to actually! I noticed just about everyone had a cellphone in Finland, in fact we couldn’t even find a public phone booth – they don’t exist anymore. In Canada, cellphones are common yet not as widespread as in Europe. Calling from a public phone is only 50 cents for unlimited local calls, so people still use them. Landlines are pretty cheap.

    I do find life in North America much cheaper than in France where I’m from, especially when it comes to food, clothes and accommodation.

    I think I like the health system best in Canada. There are issues of course, but we don’t pay anything up front to see a doctor. Although you do have to pay for drugs unless you are covered by a private insurance plan.

    University was cheaper (well, free almost) in France, that’s true.

    Generally speaking, I do think life is cheaper here than in France.

  8. that is all good advice, zhu.
    there are some very smart people trying to separate you from your money. they have budgets dedicated to knowing everything about you: what you like to do, where you live, what you buy, even what you stop to look at (and the pages you view on the internet).
    it’s unfair, almost like “taking candy from a baby” when you stop to think about it. it’s sad but true.
    .-= Seraphine´s last blog ..There Are Never Enough Good Excuses =-.

  9. I pay 599kr/moth for my iPhone (6 months contract) then you can change how much you want to pay (299 or 399 kr).

  10. Amen! I spent so much money when I moved here. I don’t think people realize how quickly it disappears when you are moving, especially to a new country. And yes, I fell into that credit card trap as well.
    .-= angela´s last blog ..Who Knew? =-.

  11. Depending where you live in Canada your Cell phone is just a paper weight. I know alot of my travels in Western Canada the only time I really had reliable reception has been in Alberta. Even then I worked in one town within in a couple clicks of the town I would almost lose my reception and this we were located right next to major hwy.

  12. Zhu, you should immigrate to the Philippines…it is much cheaper here… always hot… great seafood…nice beaches… friendly and smiling people… 🙂
    .-= Sidney´s last blog .. =-.

  13. Hi Zhu Zhu :D!

    Oh my Lord…it is expensive to live in Canada!

    Public transportation in Portugal is getting expensive due to the rise in gas prices, but our monthly pass is more or less €30 (with access to every public transportation of any company: boats, subway, buses, trains). And the price I am giving you is a regular one (giving you access to half the line in Sintra and half the line in Cascais), because you have cheaper passes (for Lisbon area only) and more expensive ones (for Lisbon + suburban areas). I heard in Porto they are cheaper though.

    Cell phones: we only pay for the calls we make (it was proposed by the EU that Europeans countries would pay for incoming calls, but it was rejected by everybody – it is a rip off). Voicemail is for free. Emergency numbers are free. Our rates are now much much lower than, let’s say, 10 years ago (although I despise cell phones, I have been dealing with them since 1990). Our mainland line calls are now free for every mainland line numbers. But international calls are expensive.

    Utilities Bill: expensive in Portugal, period. We even pay VAT of the VAT…it’s a rip off.

    Credit Cards: I prefer debit cards. Credit cards only when I travel abroad.

    Excellent post!!!!

    Have a great weekend, girl!
    .-= Max Coutinho´s last blog ..Graffiti is against Political Correctness =-.

  14. Hi Zhu Zhu !
    You forgot to mention the internet, that is quite expensive as well. However, what I find more annoying than the price it´s the Bandwidth limit. Here in Montreal I´m paying Bell 40$ each month for only 20gb.

    Have a good weekend!!

  15. @Seraphine – I agree. There are so many temptations out there… I think common-sense goes a lot way. We do live in a consumer society!

    @Bluefish – How much is that in Canadian dollars, roughly?

    @angela – A lot of people do fell in the credit card trap. What matters is getting out of it! And yes, immigrating is expensive for so many reasons…

    @dobbes – You are right! Even right outside Ottawa, the network is very patchy. I still rely on phone booths quite a lot. Cell phone coverage and fees should really be improved. Thanks for your input!

    @Sidney – I must admit when you put it this way, I just wanna move there!

    @Max Coutinho – It’s not that bad. The things are mentioned are the things that surprised me when I first came because they are cheaper in Europe. Now food, clothes, real estate (rent or buy) etc. are much cheaper on this side of the Atlantic Ocean. At least for me. I do believe Portugal is cheaper than France still.

    @Juan Terosso – I know, this is a huge pain! Internet was cheaper and fast in France. I believe Canada doesn’t rank well globally in terms of speed and price of the Internet.

    @Agnes – Eh, why not? 🙂

  16. Transportation can really add up. And when you own a car, it always needs fixing, not to mention the gas…

    I try and ride my bike as often as possible. Nonetheless, it is nice having a car to help me out 😉 especially when I am delivering boxes and such things.
    .-= Seb´s last blog ..World Really Does Revolve Around Me. =-.

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