Newcomer to Canada? Set yourself up for financial success in 2018

Whether you are new to Canada or have been in the country for many years, having personal and financial goals will help set you up for success in 2018. As you familiarize yourself with banking in Canada, creating short- and long-term goals can help you achieve financial milestones in the year ahead and beyond. Here are three tips to help set you up for financial success in 2018.

Know your options

If you are new to Canada, you may be surprised to learn how many government-supported investment solutions are available for personal investors. One example is the tax-free savings account (TFSA).

The TFSA is one of the most popular financial planning options because of the tax-sheltered savings opportunities. A TFSA is a registered account that allows all of your investment income and capital gains to grow tax-free. It can be used to save for a variety of short-term and long-term goals, such as saving for a car or a home. For more information about TFSAs and to learn more about contribution limits, visit the Government of Canada website or speak with your financial advisor.

Understand your credit

An important part of your financial wellness is to understand your budget, goals, credit history and credit score. Your credit score is a number that reflects your ability and capacity to borrow money while repaying back to the lender accordingly. Your credit score is a key indicator that banks, credit card companies and other institutions use to determine whether you qualify for borrowing credit.

Credit scores are calculated using a mathematical formula called the total debt service ratio (TDSR), which is based on a number of factors including the total amount of credit products you have, your credit product limits, amount owing and the payment behaviour for each. Your credit score can range from 300 to 900 points — 900 being the highest or most favourable score.

As you settle into Canada and begin to acquire a Canadian credit history, be sure to check your credit score regularly throughout the year. Tools such as RBC’s CreditView Dashboard allow online banking clients to view their credit score free of charge (with no impact on your score), and allow you to test scenarios such as adding a credit card or a bank loan, and how that could potentially impact your overall credit score.

Create a financial calendar

Staying on track for financial success is integral to achieving your short- and long-term goals. Having a financial calendar for the year is a great way to anticipate your expenses and better manage your cash flow. One way to stay on track is by keeping records of day-to-day transactions, including bill payments, sales receipts and any upcoming financial obligations that would be coming out of your bank account. Having a financial calendar allows you to feel organized, and helps ensure your funds are properly allocated.

There are many great financial planning tools online that can help you stay on track for financial success. RBC’s NOMI Insights tool is available for mobile banking clients, and helps consumers manage day-to-day finances with timely tips and advice. While you’re busy living your life, NOMI Insights is keeping an eye on your finances, helping you keep track of spending and upcoming expenses, and providing notifications when funds are needed (such as when regular monthly payments are higher than usual).

No matter what your financial goals are for the year, planning ahead will help set you up for financial success for 2018 and beyond.

-CanadianImmigrant