2024-02-28T17:18:02-05:00Dec 21, 2020|

How to plan your finances and prepare for life in Canada: Tips for newcomers

Moving to a multicultural and well-developed country like Canada and starting a new life is an exciting prospect. To ensure your transition and settlement in Canada progresses smoothly, it is important to be informed and prepared. Finding employment after moving is often one of the high-priority action items for many newcomers. While job-hunting, it is essential to have sufficient financial support to sustain yourself and your family for a few months.

In this article, we will share some insights on key expense categories for newcomers in Canada so you’ll know what to expect and can thus plan your finances better. We will also help you understand credit and provide tips on saving and budgeting so you can live a financially-stable life after moving to Canada. 

What are the major monthly expenses in Canada?

In Canada, the living costs can vary from one city to another and are likely to be very different from what you are accustomed to in your home country. Having a fair and realistic idea of these costs, especially as you plan your move to Canada, can help you with budgeting and managing your expenses better.

1. Accommodation cost is likely to be the majority component of your monthly expenses

Newcomers usually rent accommodation during their initial months in Canada. The cost of renting a similar-sized apartment or condo can vary widely between cities. According to data published by CMHC in January 2020, Toronto remains the most expensive place to rent in Canada, with the average cost of a two-bedroom apartment reaching $2,476 CAD per month. The same size dwelling in Vancouver averages approximately $2,045 CAD, while one in Winnipeg costs $1,412 CAD. A casual search on websites like ViewIt and Condos.ca or apps like Zumper and Padmapper will give you a fair idea of what to expect.

Depending on which city you’re renting in, you may be required to pay a security deposit. In some provinces like Ontario, it’s a common practice for renters to pay first and last month’s rent prior to moving in. It is common practice (and entirely legal) for landlords to require a credit report from potential tenants. Most newcomers to Canada do not have a credit history and are therefore not able to provide this. In the absence of a credit report and employment letter, you may offer to pay the landlord a few more months of rent upfront – this can be an incentive for the landlord to accept your application over another. Remember, the landlord cannot legally ask you for any additional amount beyond the specified norms. 

Tenant (or renters’) insurance is another cost that you need to factor in when renting. Compare quotes by different providers before deciding; insurance providers such as SquareOne and Sonnet offer competitive rates. If you plan on getting a car, remember that parking space can cost extra too. 


  • Don’t forget to budget for furniture and other household items, which can be a substantial one-time cost.
  • Remember that your total spend per month on accommodation will be more than just the rent as you will have to factor in utility bills (hydro, heat, AC, internet, home phone, cable TV) and things like parking, insurance, and transit passes. So what may initially seem like an affordable unit may actually turn out to be expensive.

“Like many other newcomers, my first priority was to rent an apartment. It didn’t take me long to figure out that having a bank account was essential in order to be able to rent an apartment – something I came to realize whilst I was already mid-apartment search. Being unaware of the various financial products, service charges, and fees led me to spend more money than I ever needed to in that first experience. In hindsight, I wish I had gathered more details around financial wellbeing before I moved, or knew where to seek out accurate information.”

Lucas, moved to Canada in 2017

Open an RBC newcomer account even before you arrive in Canada

Banking in Canada may be different from what you’re used to. RBC can help you understand how it works here so that you’re prepared when you arrive. Book an appointment now to speak to an RBC Advisor and learn more about how to open a bank account.

Speak to a newcomer financial advisor

2. Utilities can quickly add up to your monthly expenses

Air Conditioning (AC) and heat are a majority of the cost component, hydro (electricity) bills average to $50-80 CAD per month, while water can be about $20-40 CAD per month. Internet and cable TV, combined, will cost additional – upwards of $100 CAD per month. Depending on the type of accommodation, there may also be additional charges for garbage removal and waste management. Personal phone plans are also expensive in Canada and cost between $50-100 CAD per month.

Tip: Use Arrive’s Cost of Living Calculator for better planning and budgeting. It takes into account a variety of factors such as the city you plan to live in, family size, type of housing, and transportation you intend to use.

3. Food and groceries: Compare prices before buying to avail maximum savings

A good way to calculate your food and grocery expenses is to browse local grocery stores online. Since many stores these days offer online shopping and home delivery options, you can add items to your cart and view the total cost. In addition to various local regional and ethnic stores and big names like Walmart and Costco, Canadian retail chains such as Loblaws, Metro, T&T Supermarket, and Sobeys are very popular. 

Tip: Most grocery stores have a website and list out the prices of all items so you can research and budget for your food and grocery expenses while still in your home country!

It might be helpful to know that prices could differ – depending on which store you shop at. Apps like Flipp and SaleWhale are price comparison apps and are useful in finding deals. Many grocery stores even offer price matches, where they will match a lower price offered by a competitor, which can help save money and the effort of going to the store that offers the same product at a lower price.

“Flyers change every week, usually on Thursday, and some stores do price matching. So, if you show that another store has an item on sale for less than their special price, they’ll match it. Flipp, the flyer and coupon app, is your best friend when it comes to grocery shopping. When I first moved here, everything that was in my shopping cart was on sale. I saved a lot of money that way.”

Tuni, moved to Canada in 2018

4. Plan for travel-related expenses

Depending on where you choose to live, you may have to travel to the city centre for work, shopping, etc. In large cities in Canada, public transit is the transportation of choice for most people to get around, especially since it’s a cheaper alternative. In Toronto, for instance, the public transit system (commonly referred to as TTC) operates buses, subways, streetcars and light rail transit (LRT). The Presto card is the preferred way to pay for public transit in Toronto and the surrounding area. The card works on all local transit systems and can be topped up with money online, at the station, or in certain stores.

Similar to Toronto, cities such as Vancouver, Calgary, Montreal, Ottawa, Winnipeg, Edmonton, and more provide guides to the local transit options available on the city website, which should help you in estimating the travel expenses. 

If you plan to buy, lease, or rent a car, do take into account all the associated costs such as gas, car loan monthly installments, registration, and insurance.

5. Depending on your family size, clothing and footwear can add to your expenses

Canada is cold for almost six to eight months of the year. During winter, many regions experience temperatures well below freezing (sometimes as low as -40 degrees Celsius). Therefore, being prepared with the right clothing and footwear is essential to survival. You should budget a few hundred dollars per person for fall-winter wear. The silver lining is that this isn’t a recurring cost each month but rather a one-time investment. A good way to arrive at an estimate is to check costs on retailer websites. Some of this gear can also be bought second-hand in local thrift shops or Facebook marketplace for a fraction of what it would cost as new. Just be sure to inspect it thoroughly for any damage or issues before you buy. 

Tip: See How to dress for Canadian winter: Tips for newcomers for detailed insights into what to buy.

“Move to Canada with more money than you think you’ll need; you never know what kind of emergencies you might have. And even if you don’t have an emergency, treat your money like emergency money. Only buy what you need. You have the rest of your life here to buy that cool video game, and prices don’t change that much from one year to the next. Be responsible, make a budget and don’t buy on impulse. When buying something expensive, track the price for several weeks before buying it, so you know when an offer is really good. My apartment had the bare minimum, and I only bought things that I needed when I needed them.”

Tuni, moved to Canada in 2018


  • Buy only what you need; make a budget, and stick to it. 
  • Set aside some emergency funds for a rainy day.
  • It is always a good idea to be prepared and save for occasional unexpected expenses such as buying prescription medicines or hospitalization costs that are not covered by health insurance.

What is credit?

North American countries such as the U.S.A and Canada are known to be credit-based economies – this may be different from your home country. This essentially means that people use their credit cards to make purchases and then repay the amount owed either at the end of their credit card billing cycle or in installments. In simple words, it’s like borrowing funds from the bank to pay for your expenses. Once you receive a credit card, get started by making payments for small expenses such as phone bills or groceries, and make sure you pay the balance in full by the end of the billing cycle. This will ensure you gradually build your credit history.

Tip: Keep in mind that credit cards have limits and do not offer free money. They can carry very high-interest rates, so your balance should be managed and paid down promptly – this will help you maintain a good credit rating.

What is a credit score or credit rating?

Having a credit rating or a credit score is essential for life in Canada. A credit score is a way for financial institutions to measure your ability to repay loans. While renting, landlords may ask for a credit report from prospective tenants. Sometimes, a credit report may also be required while applying to certain jobs. A good credit score can ensure you qualify for better interest rates on mortgages and other loans down the line. Having and using a credit card is essential to get started with building your credit history.

Learn more about credit cards, credit scores, and credit ratings through these resources:

Obtaining a credit report:

It takes at least a few weeks to a month for newcomers to receive their first Canadian credit card and a few additional months of credit transactions to generate a credit history. EQUIFAX and TransUnion are the two major credit rating organizations in Canada, and you can choose either one to get your credit report. 

Familiarize yourself with savings plans and investments in Canada

Investing smartly ensures present and long-term financial security for you and your family. As you start your new life in Canada, it helps to define your goals (such as buying a house or a car, planning for your kid’s education, retirement savings, etc.) and plan your finances to realize them. Being familiar with popular investment options in Canada will help you save and grow your money. So, it’s important to get started early.  

Here are some popular savings and investment options you should know:

  • High-Interest Savings Account (HISA): Offers a comparatively higher interest rate on the money you put in. Not all HISAs are the same, and the rates could differ from one financial institution to another, depending on the service provided. 
  • Tax-Free Savings Account (TFSA): Allows you to easily save for your short-term and intermediate goals (an emergency fund, a car, home renovation, retirement, etc.). It is a registered savings plan where the investment income and withdrawals are tax-free. It can also hold other investment products such as cash, Guaranteed Investment Certificates (GICs), mutual funds, savings deposits, stocks, bonds, Exchange-Traded Funds (ETFs) and more. 
  • First Home Savings Account (FHSA): Allows you to save and grow your money, tax free, for an eligible first home purchase in Canada.
  • Registered Retirement Savings Plan (RRSP): A plan where investment earnings are tax-deferred until retirement and contributions are tax-deductible, so they reduce your taxable income. When you decide to withdraw the money, withdrawals are added to taxable income the year the money is withdrawn. Similar to the TFSA, an RRSP can also hold other investment products such as cash, GICs, mutual funds, savings deposits, stocks, bonds, Exchange-Traded Funds (ETFs) and more.
  • Registered Education Savings Plan (RESP): A tax-sheltered plan to help you save for your child’s post-secondary education. Enables receipt of contributions from the Canadian government. 

Tip: Once you sign up for any investment or savings plans, you can set up periodic automatic money transfers from your bank account, so you’re not tempted to spend what you intended to save.

Learning about the financial ecosystem and banking products in a new country can be overwhelming. You should speak with a financial advisor to better understand which options or plans may be right for your unique situation. With professional advice and the right resources, you’ll be better prepared to achieve your financial goals and have a secure financial future in Canada.