Starting your life in a new country can be expensive. You need to rent (or buy) a new home, furniture, appliances and other things. It is easy to fall into debt just a few months upon arriving here. Remember these eight tips to prevent this from happening:

1. Don’t be in a rush

   Save instead of taking out a loan. Take your time. Don’t pressure yourself into buying a new house, car or appliances if you can’t afford them. It is easy to use your credit card to get a loan but getting out of debt will be hard.

2. Set a budget

   Live within your means. Don’t spend more than you earn. Know your priorities and keep track of spending. Watch this video from about making small changes in your spending habits. It will help you learn how to set a budget:

   
   Video from the Financial Consumer Agency of Canada (FCAC)

3. Use your credit card wisely

   • Pay your credit card balance in full. Don’t just pay the minimum balance each month. It will take you years to pay off your debt because of the interest.
   • Don’t get a cash advance. Cash advances have a bigger interest and added fees. They will cost more.
   • Don’t get too many credit cards. Too many credit cards will make you lose control of your spending. It will also affect your credit score. Limit it to one or two.
   • Don’t charge things you can’t afford. Ask yourself: Can I afford this if I paid in cash? Don’t buy it if the answer is no.

4. Make a list of your spending

   Be careful when going to Black Friday, Christmas Sale and Boxing Day sales. Make a list of what you need to buy. You can lose track of your spending. Don’t be distracted by other items on sale. Remember that it’s not a good buy unless you need it.

5. Avoid “buy now, pay later” plans

   A buy now, pay later plan lets you pay for items in installments. It offers low to 0% interest when you buy. Some plans give you six months to one year before you start paying. It can be a good plan if you need something urgently (if you need to replace a broken refrigerator for example) and if you can pay on time. Before using a buy now pay later plan, know that the late payment penalty can be big. The interest rate can go as high as 29% if you miss payments. There can also be hidden fees for delivery, administration, or environmental fees.

6. Make an emergency fund

   Save money for situations that you do not expect. These are emergencies like a leaky roof or accidents and illness in the family. Read Do I really need an emergency fund? for more tips on saving for emergencies.

7. Buy second-hand

   Get good second-hand items at a lesser cost. Examples are exercise equipment, some electrical goods, clothing, textbooks and furniture. Go to garage sales in the summer and fall. Join buy and sell groups on Facebook or register with Kijiji. Remember to inspect items carefully before you buy. Make sure that they are working and are pest-free. Read Looking forward to garage sale season for more tips. If you need a safe place to meet a seller or buyer, go to a Winnipeg Police Buy and Sell Exchange Zone.

8. Invest

   Get a Tax Free Savings Account and other Registered Savings Plans to make your money grow. Ask your bank or credit union for investment options.

 
Article updated April 1, 2020.
 
Sources: Five financial tips for newcomers, Dianne Nice, Globe and Mail; Holiday debt: Here’s how Winnipeg shoppers can avoid it, Alison MacKinnon, Global News; Survey:1 in 3 Canadians are afraid to see their credit card bill after the holidays – but are they prepared to pay it off?, Hyder Owainati, Ratehub; and How to shop Black Friday sales without overspending, Rubina Ahmed-Haq, CBC News. Retrieved November 23, 2018.