Moving abroad to Canada

How to manage your finances after you’ve settled in Canada

In 2003 the world seemed to be giving everything to me on a silver platter and life couldn’t be better! I was graduating from college. I just bought my first home with my fiancé. We celebrated by taking an all-inclusive trip to Cancun, Mexico. I was taking it easy one afternoon, since I no longer had to do homework every weekend. My fiancé came in the room, and said this words, “I don’t think I want to get married.” It was quite an unexpected blow. We settled it up over pancakes at IHOP, because when life hands you bad news, pancakes can always make you feel better! As we sorted out our lives and learning how to separate, I got this wild idea. I am going to immigrate to Canada and start all over!

Starting the immigration process to move to Canada, I was able to do it all online. While reading through the information I saw that one of the things that Canadians look for is how an immigrant would earn a living in their country. I was lucky and was able to say I had just completed my degree, which gave me better options for getting a job there.

After completing my online documentation, there was to be a call from immigration services. Just to show how long ago that was, the call came through on my landline! My now ’ex- fiancé’ answered the phone call. I was not home. He took a message and left a note. We were cordial because we still had to live in the same house, until we could sort some things out. However, the note he left me on the fridge said, “Why the Crap is Canadian Immigration Calling You…??

Well long story short, I did not immigrate to Canada, but I have spent time there. Montreal is beautiful and if I could, I would move to Canada! But owning several small businesses makes it hard to pack up and move to the North Land. One day my maple leaf country friend, one day.

I have learned a lot about our dear friends to the north, some things I would have learned right away if I have actually made my move back in 2004. Although getting approval may have been a task, as it was for one gentlemen noted in TorontoLife.com. I think that since I wasn’t a felon, had no bad debts, and had a finance degree that could have helped me land that first job. Though most employers probably would still try to hire Canadians first, I would expect nothing less!

Differences between US and Canada

Obviously there are some major differences between the US and Canada, so I want to just go over a few. Let’s start with mortgages. I have bought 4 houses in the last 10 years. Obviously with decent credit you can get approved for a home loan even when you do not have 20% down on a home in the US, or I would still be living in an apartment. Applying for a mortgage in Canada appears to be a less intrusive process than it is here in the States. Here are some of the major differences between the two countries standard mortgage structures and processes as found on TheGlobeandMail.com:

Canada United States
Time to obtain a mortgage 3-5 Days 45-60 Days
Documents Required 5 10+
Mortgage Fees 1.5%-4% 5%-7%
Mortgage Interest Compounded Semi-Annually Compounded Monthly
Down Payments 5% 20%
Standard Terms 1-5 Year Mortgage 30 Years Mortgage

Lets talk about money

1 US dollar note

How far would your US dollars go in Canada? For 1 US dollar you will get 1.25 Canadian dollars. If you are taking Canadian dollars back to the US you will only get $0.80 US for every $1 CAN. So your money will not go as far in the US as it will in Canada. Between the two countries, their inflation rates almost parallel each other over the last ten years. Keeping the cost of living between the two countries and employment salaries about the same distance apart. Cost of living varies according to which city you live in for each country, but on average the United States has a higher cost of living, when it comes to consumer prices, rent, groceries, and restaurants, per www.numbeo.com. Finding a job would also be about the same between the US and Canada. Both countries experienced a higher unemployment rate 2008-2009 and the unemployment rate has steadily been coming down in both countries. Although now, writing for a living I can do that anywhere! So the job probably wouldn’t be part of the problem moving to Canada. This days you can easily and cheaply send money abroad, from the comfort of your couch by spending a few seconds on your phone.

Speaking of being able to work anywhere, how about bank anywhere? Not having to go inside a bank and being able to bank completely online is a blessing from the financial industry! A few banks in Canada that have awesome online services are: Scotiabank, Tangerine, PCFiancial, EQBank, and ZagBank, just to name a few. Being able to open a bank account and set up online bill pay will save your time and energy. Depending on your status in Canada will depend on how you can open an account to get your financial future started. If you are immigrating to Canada, you will need your temporary or permanent residency card, or immigration papers and a valid passport. If you are a citizen you can open your account much easier than if you are going through the immigration process.

After you have your bank account set up, you may want to consider planning for your Canadian financial future and retirement! If you don’t want to spend a ton of time learning the ins and outs of investments while you learning about your new country. You might want to consider signing up for a robo advisor, or robos. Canada offers a robo advisor, which is an online financial advice and automatic investment strategies for the tech savy but not investment savy investor.

If you want to know exactly how much you are going to pay on your investment you can use the calculator at autoinvest.ca. While retirement might be decades away, starting to invest now is ideal.

Canadian Healthcare

You also want to protect your new life and home in Canada. Wonderful enough, Canada has free healthcare. By free, I don’t mean no one pays for it, that’s a misconception because nothing is ‘free’. Canada has healthcare for all, you can go into the doctor and be seen and not pay a fee for visiting. Healthcare is covered through taxes and run as a single payer option by the Canadian government. This means you can’t go bankrupt from healthcare costs, like many Americans can and do.

Buying a Home and Keeping it Safe

When you first move to the great white north, you may think it is best to rent until you learn more about your new city. This is a great idea! I moved to Kansas City in 2008 and my job and friends ended up being over 40 minutes away from the house we purchased. We wished we had rented the first year to find out where we wanted to be, before settling in and buying a home.

When you do buy a home, you should consider the different insurance policies that are available for your home and what they cover. Make sure your home insurance will cover replacement of your home if damaged and your replacement of your possessions. I work at home, so my home is also my place of business and having insurance to include my business is also important.

Ending Summary

So many things need to be considered when moving abroad, luckily moving from the United States to Canada does not necessarily mean you must learn an entire new language on top of all of these other life changes! Moving is one of the most stressful things a person can do, and moving to another country would just multiply the stress of moving! So be sure to think through the little things to make your transition as smooth as possible. You may be able to open a bank account before you move to Canada. Renting is a smart move until you get settled in your new city. Having a bank that is easy to access online is great, when you don’t know your way around town. Investing in your future is always a plus and protecting your investments is only logical. Learning to like hockey would also be a big plus!

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