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Financial Advice

Managing Your Finances

by Karn Bagri

Transitioning to a new country by yourself is a big step in one’s life. Within the transition, there are a lot of different factors you have to consider like housing, finding a job, and managing your finances. Managing your finances includes converting foreign money, making a bank account, and paying your taxes.

A survey conducted about the transition to Canada for international students showed that the majority of respondents rated the difficulty an 8 with 10 being very hard (Survey, 2019) The transition can be extremely hard and frustrating, however, with the right guidance and support the transition can go from hard to easy and fun. At first, it’s a lot of info to wrap your head around but the main objective of this chapter is giving new students crucial information that will help ease their transition to Canada.

Making A Bank Account

When you first arrive in Canada one of the first things, you’re going to want to do is make a bank account. This step has a lot of options, you have full control on who you decide to make a bank account with. Some of the more common banks are TD and RBC however, there are still plenty more for you to choose from. Your choice will depend on what benefits you would like and what bank has the cheapest fees that you willing to pay. Once you have chosen a bank you will be provided with a lot of important documents and a debit card. One of the documents being a direct deposit page, which has many different usages. Its most common use is for employees to provide this page to their employer so that they get paid using direct deposit. Once your bank account is fully setup up your are free to purchase whatever you like using your new debit card and once you turn 19 you can apply for a credit card that comes with a lot of extra bonuses. Additional info for these banks can be found at these links.

https://www.td.com/ca/en/personal-banking/products/bank-accounts/ (TD)

 

https://www.rbcroyalbank.com/personal.html (RBC)

 

Paycheque & Taxes

 

In terms of your paycheque, one thing you will notice right away is the money getting deducted due to taxes. Unfortunately, taxes are unavoidable and that every individual, domestic or international, must pay taxes on their income. Taxes such as Federal Tax, Employment Insurance, and Canada Pension Plan will take a portion of every paycheque. The specific taxes deducted from your paycheque vary depending on your job.

Every year around March-April we have tax season where you are responsible for filing your taxes to the government. Depending on your income, the government calculates whether or not they owe you money or if it’s the other way around. It is extremely important that you correctly file your taxes because there are serious punishments if you do them incorrectly, even if it’s by mistake. We recommend going to a specialist that will correctly file your taxes for a fee that could range from $30-80. Ensuring your taxes are filled correctly is extremely important and the consequences for not completing your taxes correctly shouldn’t be taken lightly. You could face huge fines and possibly jail time for tax fraud.

Link to a BC government site that provides more info on filing taxes:

https://www2.gov.bc.ca/gov/content/taxes/income-taxes/personal/report-pay

 

Budget Plan

 

A problem almost every student will face whether they are domestic or international is spending their money wisely. Moving to a new country comes with a lot of stress and one of the biggest stress causers is not knowing if you have enough money to last until your next payday. A survey conducted by CMNS 1140 found that the majority of respondents said that 30-40% of their income was going to rent while a big portion said that nearly 70-80% of their income was going to rent. (Survey, 2019) Anyone can have financial issues and for a student to go through financial issues is very common.

However, there are simple yet effective steps that you could follow that will help you stay in control of your money. One of the easiest methods is creating a budget plan; a budget plan is designed to lay out all the data you need such as your income, guaranteed expenses, and other miscellaneous expenses. By doing this you have a clear image of how much money you have coming in. According to one financial expert “making a budget gives you a clear picture of the money you have coming in, and where your money goes.” (Hill, 2015, p.1) A simple step like creating a budget can go a long way. Constantly keeping an eye on how much money you have and knowing what expenses you still have to pay for will help you make those decisions on whether you actually need that product or simply just want it.

Pictured below is a free Excel template called “Personal Budget” that anyone can use to visually show their cash inflow and outflow. This template separates multiple income streams and divides up all the expenses to clearly see where your money is going. Another simple way to track your money is using a budget planner app on your smartphone. This way you can always have access to your spending habits.

Screencap of an Excel budget. It features a breakdown of the student's expenses and a pie chart of their finances.
This Excel spreadsheet helps you manage your budget.

References

 

CMNS 1140. “How International Students Find Accommodation.” Survey. Google Forms. Web. 2019

 

Hill, N. (2015). Tips from the Money Advice Service on managing your money. Veterinary Nursing               

Journal, 30(12), 341-342.https://doiorg.ezproxy.kpu.ca:2433/10.1080/17415349.2015.1099489

 

This Excel spreadsheet helps you manage your budget.   

License

International Student Survival Guide Copyright © by arley. All Rights Reserved.

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