Updated: Feb 16
Financial stability is one of the most important things in life. It is important to understand that a lot of people are not financially stable because of the debt they carry. The Kunye team put together these tips and tactics to allow you to manage your debt and set yourself up for financial success down the road.
Get Ahead if It
There are two key things every newcomer to Canada should have in place as soon as possible upon arrival to Canada and, oftentimes, before even setting foot in the country.
The first thing a new immigrant needs to do is to find a job. The second thing is to find an affordable place to live. These two steps will help you manage your debt. Some immigrants struggle with debt because they don't know how to manage their finances properly. The key is to save and budget because overspending will only make their debt worse.
There are some budgeting apps and software that can help new immigrants with managing their debt. There are also some programs that offer financial literacy workshops for newcomers in Canada. These workshops can teach you about how to manage their money and how to avoid getting into debt in the future.
Make A Budget
The first step to managing debt is creating a budget. You should track your income and expenses, figure out what you can afford to pay off each month, and set aside money for emergencies. The second step is to commit to paying off your debt. Start with the smallest balance and work your way up.
Debt consolidation is not always the best solution because it often involves taking on more debt. A better option might be to avoid or consolidate the debt when possible. Debt consolidation is a process in which a person takes out a new loan to pay off all of their debts. This loan is usually at a lower interest rate than the person's previous loans, giving them more money to spend on other things. The new loan is often for the same amount as the total amount of debt owed, but can be for an amount that's greater or lesser than that total.
It may sound tempting to consolidate your debt by taking out a new loan, but you should only do it if you can afford it and if you don't have any other options available. It also might not be worth consolidating your debt if you're going to end up paying more in interest over time.
There are many ways to manage debt, and it all depends on how much you can afford. One option is to use budgeting and saving software, which will help you get a feel for your financial situation and help you manage your spending habits, while another option is to consolidate your debt with a credit card balance transfer or personal loan.
The key takeaway from this section would be that managing debt comes down to what you can afford and what works best for you.
Plan Your Finances
As a newcomer to Canada, you may find yourself in a situation where you need to access funds for an emergency. This can be for any number of reasons, from something as simple as needing to repair your car after an accident or having to pay for unexpected medical expenses.
The first step is to set up your emergency fund. Ideally, this should be enough money so that if you have an unexpected expense, it will cover it and leave some left over. This can be done by setting up a savings account and depositing small amounts until you have saved up a sizeable amount to cover emergency medical or travel expenses.
Having access to these funds will reduce your need to use loans or credits cards to cover unexpected expenses and will ensure you keep your debt manageable.
Connect With Community
There is no better teacher than experience, and you can learn a lot by having conversations with other people who have already gone through the journey you are going through. Look out for opportunities to connect with people and ask what resources they use or recommend to help manage your debt and manage your finances.
Sometimes newly arriving Canadians have friends and family already in the country that can help with getting settled and accustomed to life in the great white north. If you are part of this group, you are fortunate, as these people can be a great resource for advice.
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