No matter where we are in the world, each of us has to balance the number of rupees, pesos, or dollars we have against all of the various living expenses in that particular place. In Canada, the costs associated with housing, transportation, food and entertainment can vary from city to city and are likely to be very different from what you are accustomed to at home. To manage these expenses, especially in your early months if you are looking for employment, you’ve got to manage your money by creating and sticking to a budget.


What is a budget? 


Essentially, a budget is a comparison of how much money you have coming in (income) and how much money you have going out (expenses). It allows you to keep track of, plan and balance those two streams, while putting a little aside for the future (savings). A budget doesn’t have to be difficult, and budgeting doesn’t mean you have to sacrifice or give up more than you would normally; it simply allows you to manage and know where your money is, which can also reduce stress.


How to budget for your life in Canada


Like many other aspects of living in a new country, your financial life in Canada will be very different than at home. At the outset, you may need to take a job with a lower salary while you get Canadian experience or upgrade your skills. Even if your salary in Canada is higher than what you earned back home, Canada’s cost of living may be higher than what you are accustomed to.


In Canada, the cost of necessities: home and accommodation, heating and utilities, food and clothing, health insurance, and transportation can consume 35 – 50% of your take-home pay.

Here are 5 key items to account for in your budget:

1. Renting an apartment


Rental costs vary widely between cities across Canada. Toronto remains the most expensive place to rent, with the cost of a 1 bedroom apartment reaching $2,290.00 per month.

Read more about how to find a good apartment in Toronto

2. Buying a home


To buy a home in Canada you will probably need to get a mortgage. Typically, you will be expected to pay 20% of the purchase price of the house from your own money. 


Additionally, you will have to factor in property taxes and household insurance – if it’s a condo you’re buying, allow for additional costs, like monthly maintenance fees.
You can compare the costs of housing in communities across Canada in the city profiles section of the Canada Mortgage and Housing Corporation (CMHC) website.


3. Transportation

Canadians buy their cars new or used, or lease them (a form of long term rental). There are costs associated with each option that may affect your decision.  It is the law that all vehicles must be insured and registered. Car insurance can be expensive, but it protects you and other drivers in case of an accident. In most provinces, you can find more information by contacting the Insurance Bureau of Canada. Public transportation is an excellent alternative.

4. Health insurance

Some provincial and territorial health programs may not cover some newcomers for the first three months they are in Canada.


Check the ministry of health in your province or territory website to see if you will need to buy extra health insurance.

5. Unexpected Expenses


It is always a good idea to be prepared and put money aside for occasional expenses that may arise unexpectedly, like: Prescription medicine (not covered by health insurance), school supplies or school trips, and long-distance calls to friends or family back home.


Budgeting tip: Whether you pay by cash, cheque, debit, e-transfer or credit card, remember to make a record of everything you spend to help you plan for your future costs.  



How to make a budget in Canada


Use Arrive’s newly launched, cost-of-living calculator to help you estimate and plan for your monthly living expenses in Canada. 



Step 1 – List your income and expenses


Enter the amount of income and expenses into each category of the Budget Calculator. If you’ve collected information for more than one month, take the average


If you have income or expense categories that you don’t see in the Budget Calculator, put them in an “other” category for each section


Step 2 – Review the figures and ask yourself:


  • Did you miss any income or expenses
  • Are there any other income or expense categories missing to reflect your situation
  • Were you able to save any money
  • Did you have to borrow money to pay for your basic expenses


This will help you understand your spending habits. If you need to reduce your spending, your “wants” may be an area to target. Pay down debts or increase your savings with the money you save from cutting back on “wants”. Remember, building a budget early will help you establish that solid financial footing you need and help you plan for the future.

Figuring out your financial life in Canada is more than just finding a bank account, it’s also about finding the right partner to invest in your financial success. RBC is the largest bank in Canada* and here to be your partner in all of your financial needs. 



RBC supports Arrive, and with a 150 year commitment to newcomer success in Canada, RBC goes the extra mile in support and funding to ensure that the Arrive newcomer platform is FREE to all.


This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.