It’s not easy to learn how things work in Canada as a newcomer, particularly in the financial sector! Here are six things to think about when making a financial plan for your family in Canada:
- Managing Cash Flow
Keep track of how much you spend per month. If you don’t track your money, it can be difficult to remember where it goes. You can keep track of your expenditures with the aid of a notebook or budget board. It’s also a good idea to make a list of what you’ll need before going shopping.
- Debt Reduction
Building your credit history in Canada is a good idea, but you should try to pay off your debts as soon as possible. Let’s say you owe $10,000 on your credit card today and are still making minimum payments. If your credit card has a 20% interest rate, you’ll owe about $20,000 in four years (double the amount).Unfortunately, many Canadian families are in debt, so it’s important to budget ahead of time and avoid spending more than you can afford.
- Have an emergency fund
If you need to pay for something unforeseen, such as car repairs or a new phone, you should have some money set aside.
- Adequate Security
This is often ignored, but as an immigrant to Canada, the ability to make a living is critical to you and your family’s well-being. What will happen to your family if you were disabled or died? Life insurance and disability insurance will give you and your family peace of mind by protecting your family’s lifestyle.
- Wealth Creation
In Canada, you must consider the impact of taxes on your savings. You can save and expand your money in a tax-advantaged world in a variety of ways. There are the following:
- Tax-Free Savings Account (TFSA)
- Registered Retirement Savings Plan (RRSP)
- Registered Education Savings Plan (RESP)
- Registered Disability Savings Plan (RDSP)
- Universal Life Insurance
- Keeping Your Assets Secure
Keeping your assets in your family takes some preparation, but it’s worth it because you might lose a significant portion of them when you die due to taxes. To figure out your estate plan, you can write a will and consult with an estate planner, accountant, and financial advisor.