Canada is known for its quality of life. As a newcomer to the country, you may be especially eager to start strong. You want to feel financially secure and on the right track as you embrace your new life in Canada. The good news is that there are several excellent ways to save money. Here are some ways you can get started.
Why do I need to save?
Saving money is a critical aspect of financial health and stability[1] for all Canadians, including newcomers. There are several reasons, in fact, why you may want to focus on saving:
- Unexpected expenses: You never know when an unexpected expense may arise. It could be a car repair, a medical emergency, or a job loss. Setting aside money in a savings account[2] can help you cover these expenses.
- Longer-term goals and dreams:[3] You may have dreams like owning a house, buying a car, or planning for retirement. Saving can be a good first step towards making these dreams a reality.
What can I do to save?
There are several ways to save money, but it’s important to start with a plan. Here are some ways that can help you get started.
- Smart buying: There are many ways to save money on your purchases, including taking advantage of newcomer offers[1], and shopping during sales. Keep an eye out for promotions and discounts and use them to your advantage.
- Budgeting and tracking: Budgeting is key to saving money. You should keep track of your expenses and figure out how much you can save each month. There are many budgeting apps and tools available that can help you keep track of your expenses and set a budget, such as the TD MySpend App[2].
- Invest to match your goals: One of the best ways to save money is by choosing the right savings vehicle for you. There are several options that can help you grow your savings and achieve your financial goals. Here are a few options that you can consider:
- Savings Accounts:[3] Savings accounts offer a higher interest rate compared to chequing accounts, which can help you reach your financial goals faster.
- Tax-Free Savings Accounts (TFSAs):[4] TFSAs are registered savings plans that allow you to earn interest and returns on qualified investments tax-free.
- Registered Retirement Savings Plans (RRSPs):[5] RRSPs help you save for retirement on a tax-deferred basis. Based on your contribution amount the government will provide you with a tax credit that you can use to save for the future or to reduce your tax bill in the present.
- First Home Savings Account (FHSA):[6] FHSA’s can help you save for a down payment on your first home. Contributions would be tax-deductible and qualifying withdrawals would be non-taxable. The account allows individuals to contribute up to $8,000 per year, and up to $40,000 during the lifetime contribution limit.
