Education? Car ownership? Immigrants and refugees can reach their financial savings goals in Canada. Here are three tips to make it happen.
It’s an expensive time to be a new Canadian.
Canada is currently experiencing record inflation leading to increased cost of living, as well as increasing interest rates to borrow money.
Meanwhile a recent survey by a major Canadian financial institution found over half of Canadians (56 per cent) are cutting back on discretionary spending and some are looking at couponing or switching from brand-name products in an effort to lessen the impact of rising costs for goods and services. Most people (81 per cent) are paying close attention to their finances so they can afford their needs before focusing on their wants.
So, how do you, as an immigrant or refugee, go about reaching your financial savings goals in Canada?
Maybe you’re looking to save money to help you pay for a virtual training course to grow in your career or maybe you need the funds so you can eventually purchase a larger vehicle for your growing family.
Whatever your Canadian dreams look like, there is a path to achieving them.
Windmill Microlending is a Canadian charity that provides financial support to newcomers enabling you to pay for the costs of education, training, certification, professional development or cost of living while you study.
In order to qualify for a Windmill microloan, loan applicants must be:
- an immigrant and a Permanent Resident
- Protected Person
- Convention Refugee
- Province Nominee
- Canadian Citizen, or
- Temporary Foreign Worker with an open work permit
- If you happen to be an international student, live-in caregiver or refugee claimant, you do not qualify for a loan unfortunately
Joyce Wan, a career success coach at Windmill and herself an immigrant, works, every day, with immigrant and refugee clients who aspire to advance in their careers and build their skills and knowledge. For these individuals, paying for their education isn’t just a goal, it’s a necessity.
“For Windmill Microlending clients, setting a goal of completing their professional designation or certification can mean the difference between working in a low-skill job that barely enables them to make ends meet and getting to a high-income career that transforms their lives in Canada,” says Wan.
Wan offers the following financial savings tips to help immigrants and refugees get closer to their Canadian hopes and dreams.
Newcomer savings tip #1: Focus on your savings goals
Identify your savings goals, whether that includes owning a home, buying a car or saving for a professional development course to help grow your career. Use a tool like a financial goal calculator to capture your financial goals and project how long it will take you to reach those goals. As well, make sure to capture all your savings sources and track your progress including monthly balance(s) and monthly contribution(s). Understand how quickly you can access these funds if needed and any penalties for withdrawing funds from certain accounts.
Newcomer savings tip #2: Develop an action plan to grow your income and boost your savings
Want to reach your savings goals, faster? Increasing your income is one strategy to accelerate the process. Wan says Windmill Microlending clients grow their incomes more than three-times (3.5x to be exact) after completing their education or training and paying off their microloan. Equipped with the skills and knowledge to succeed in the Canadian job market, these individuals are more easily able to find higher income work that positions them for career success in their new country. Adds Wan, with Windmill’s new fixed interest rate offering, newcomers can borrow up to $15,000, and have some cost certainty when it comes repaying their loan.
She also advises newcomers manage debt carefully and be aware that mismanaging it can have an impact on your future borrowing. Of note, clients often come to Windmill with little to no credit history in Canada and, despite this, can still be eligible for an affordable loan.
Newcomer savings tip #3: Track your progress
Here, you should consider how you’re going to track your progress toward your financial goal and consider what savings habits you’ll want to institute. For example, setting up automatic transfers to put a small part of each pay cheque into a savings account. Others use a round-up debit card that rounds the amount up on every purchase and automatically transfers the spare change into their savings. As well, you could ask a friend or support person to help you stay on track towards your financial goals.
Wan has observed that many newcomers don’t have experience with monthly budgeting, when they first arrive in Canada, but this is a critical step to effectively growing your financial savings and getting closer to your goals.
“It is easy to overspend and rely on credit cards or personal loans if you do not track monthly expenses. It is only by budgeting that newcomers will see if they are in surplus to invest and save, or in deficit, to review expenses, or seek a job with a better income,” she advises.
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