Money: Managing Your Finances Is Easy Once You Know How

by FCAC

Some newcomers to Canada have little or no experience managing personal or household finances. The complexity and range of choices of ways to pay – cash, credit cards, debit cards or automatic transfers – can make it harder to keep everything straight. Angus Reid Public Opinion conducted a survey in July of 2010 to learn more about how immigrants view the
Canadian financial system and how they manage their finances. The survey found that access to credit was difficult for some, particularly immigrant women, and that 29 percent of immigrant women reported being victims of financial fraud.

Immigrant women, and other newcomers to Canada, can learn more about the Canadian financial system from the Financial Consumer Agency of Canada (FCAC). An independent federal government organization, FCAC provides free, objective information on financial products and services for consumers and is a great source of information for newcomers to Canada. Whether you want to open a bank account, cash a government cheque, or apply for a credit card or mortgage, FCAC’s online selector tools, tip sheets, publications and video success stories can help you learn about the Canadian banking system and the various products and services offered to consumers. For those who want help creating a budget, the Agency has just launched a new budget calculator.

The budget calculator can help

Most people know how much they earn, but they don’t always know exactly where they spend their money. FCAC’s new online budget calculator helps you manage your money. The calculator is divided into categories that prompt you to identify sources of income, set aside regular savings to help you reach your financial goals and estimate your expenses. It then does the math for you and will even show you if you’re spending too much. Anyone can use it – no matter where you come from or how much experience you have managing money.

The budget calculator is private. You can use it online, or download it as a spreadsheet and save it onto your computer to help you keep a close eye on your finances. The information you enter will only be available to you or to those you choose to share it with. The calculator lets you plan how much you could spend weekly, monthly or yearly and helps you see where you can reduce expenses – you may be surprised at how much money you are spending in certain areas – if you’re trying to pay off debt or save money.

FCAC’s tip sheet Making a Budget and Sticking to It is a great resource to help you better manage your finances and reduce your debt load.

Pick the right bank account

You have the right to open a bank account as long as you have the required identification listed in our publication “Opening a Personal Bank Account.” Finding a high-interest, low-cost or no-fee savings account anywhere in Canada that best meets your needs is easy if you use FCAC’s Banking Package and Savings Account Selector tools. These free Web resources provide details on more than 150 different kinds of savings and chequing accounts.

Avoid extra charges when you pay

With more payment options than ever, consumers can find easy ways to save money, simply by using a different payment method.

Consider cash: Merchants can choose to provide discounts for cash purchases of goods or services. Using cash can also make it easier to stick to your budget. Avoid taking a cash advance on your credit card since interest will be charged on those funds right away.

Debit cards can carry costs: Debit can be a good option, as long as you are not paying extra fees per transaction. Check how many free debit transactions are included with your bank account package. Use an automated bank machine (ABM) owned by your financial institution
– withdrawing from a different ABM could cost more than $8.00 per transaction.

Avoid credit card interest: Credit cards can be a convenient and useful way to pay for purchases and services. Some also offer benefits and rewards. But they can encourage “buy now, pay later” spending habits that may lead to financial trouble. “Carrying a balance on a credit card increases the cost of everything you purchase with the card due to the amount of interest you pay,” says FCAC Commissioner Ursula Menke. Aim to pay off your balance in full every month to avoid interest charges that mean you actually pay more than the price tag.

FCAC’s video success stories include a testimonial from Monica Daga who came to Canada at age 14. She discusses how she accumulated and then paid off her debt, and now helps other newcomers navigate the Canadian financial system. More tips on budgeting and ways to save money on banking and credit card fees are available online at fcac.gc.ca.

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The FCAC is a federal government agency that protects consumers' rights and provides consumers with information about financial products and services.