Money Matters: How to Manage Your Finances as an International Student in Canada
Whether you're pursuing higher education or simply looking for new opportunities, studying abroad can be an exciting and enriching experience. Canada is a popular destination for international students, offering world-class education and a vibrant multicultural environment.
However, managing your finances as an international student can be challenging, especially when you're navigating a new country's banking system and dealing with exchange rates. In this article, and in celebration of the World Financial Planning Day 2023, we will provide you with essential tips on how to effectively manage your finances as an international student in Canada.
Also, a must-have for international students who need to receive money from people back home without having to worry about delivery times, high fees or rates - A Pesa Account. With a Pesa account, you can conveniently manage multiple currencies, seamlessly and instantly convert NGN - CAD, and send money home at no extra cost or hidden fees.
Later in this guide, we will take a look at how Pesa can improve your international money transfer experience. But first, let’s talk about finance management.
Understanding the cost of living in Canada
Before embarking on your journey as an international student in Canada, it's crucial to understand the cost of living in the country. Canada's cost of living can vary depending on the city and province you choose to study in. Major cities like Toronto and Vancouver tend to have higher living expenses compared to smaller cities. It's essential to research and budget accordingly to ensure you can cover your expenses throughout your stay. Let’s take a quick look at some things to note:
- Population - 40,097,761 in July 2023
- Number of international students - Approximately 900,000
- Most popular cities for intl. Students - Ottawa, Toronto, Montreal, Quebec City.
- High paying part-time jobs for intl students - Admin assistant, dog walker, tutor, web developer.
It's important to consider expenses such as accommodation, transportation, groceries, utilities, and healthcare when calculating your budget. Keep in mind that these costs may fluctuate over time, so it's always a good idea to have a buffer in your budget to account for unexpected expenses. Additionally, consider the cost of tuition and any associated fees when planning your financial resources.
Use credit cards responsibly to build a positive credit history
As an international student studying in Canada, the thought of building credit might seem intimidating at first. However, establishing a credit score is essential for various aspects of your life, especially if you intend on living and working in Canada after graduation. Building a good credit score indicates you are a trustworthy candidate and eligible for future loans for renting an apartment, buying a car, or even starting a business. With a little bit of effort and knowledge, you can navigate the Canadian credit system and successfully build credit. One of the first steps in building credit as an international student in Canada is to open a Canadian bank account. This will allow you to have a stable financial base and start building a relationship with a bank. Look for a bank that offers specific services for students like low or no monthly fees and a credit card tailored for students. Use your credit card responsibly by making small purchases and paying off the balance in full each month. This will show lenders that you are reliable and capable of managing your finances.
There are four key factors that can have an impact on your credit score:
1. Credit Limits: When you approach or exceed your credit card limits, it raises concerns for lenders. While paying off your full credit card balances is ideal, it is essential to at least make the minimum payments. It's advisable to use less than 35% of your available credit limit.
2. Duration: The longer your credit history, the more reliable and accurate your credit score will be. If you are new to using credit, your score may be lower initially, but over time, you can build it up. Starting early sets you up for positive borrowing opportunities in the future.
3. Applications: Frequent applications for new credit can signal financial difficulties to lenders. It's important to limit the number of times you apply for credit within a short period. Periodically reviewing a copy of your credit report from Equifax or Trans Union in Canada ensures its accuracy and currency.
4. Credit Report Review: Regularly checking and reviewing your credit report is a good practice to ensure its accuracy and update any incorrect information promptly. Both Equifax and TransUnion are reputable sources for obtaining a copy of your current credit report.
In addition to having a bank account and a credit card, it's crucial to pay your bills on time. This includes rent, utilities, phone bills, and any other monthly expenses. Late payments can negatively impact your credit score, making it difficult to obtain loans or other forms of credit in the future. By consistently paying your bills on time, you will demonstrate financial responsibility and increase your creditworthiness.
Finding part-time jobs and internships for financial support
As an international student studying in Canada, finding part-time jobs and internships can provide you with valuable work experience, financial support, and an opportunity to immerse yourself in Canadian culture. One of the most popular ways for international students to support themselves financially in Canada is by taking on part-time jobs or internships. To work (and get paid) in Canada, you will need to first obtain your Social Insurance Number (SIN). Once you have that, you can begin active job searching. Here are a few places to start your search:
Research job opportunities on campus are also great, as universities often have job postings specifically for students. These positions can include working at the library, administrative roles, or even research assistantships. Additionally, explore off-campus job opportunities in industries such as hospitality, retail, and customer service. Many employers are open to hiring international students and offer flexible schedules to accommodate their studies. Here, we shared some tips to help you navigate the job market and secure part-time employment or internships. You can also find free newcomer services near your local province.
Scholarships and grants for international students
Scholarships and grants are another valuable resource for international students in Canada. Many universities and colleges offer scholarships specifically for international students based on academic merit or other criteria. Research the scholarships available at your institution and submit your applications well in advance. Additionally, explore external scholarship opportunities offered by organizations and foundations in your home country or globally.
Government grants may also be available to international students, depending on your eligibility and program of study. These grants can provide financial assistance for tuition, living expenses, or research projects. Reach out to your institution's financial aid office or international student services for information on available grants and how to apply.
Opening a bank account in Canada
Opening a bank account in Canada is an essential step for managing your finances effectively. Having a local bank account will allow you to receive funds, pay bills, and manage your day-to-day expenses more conveniently. Research the different banks in Canada and compare their services, fees, and accessibility before making a decision.
To open a bank account, you will typically need identification documents, proof of enrolment or acceptance at a Canadian institution, and proof of address. Visit the bank branch in person or explore online account opening options. Many banks offer special accounts tailored to the needs of international students, so be sure to inquire about any available offers or discounts. Also there are alternative platforms like Pesa, a digital finance service provider. The Pesa app is a simple, easy to use app that lets you send and receive money internationally, locally and in multiple currencies on the go. In an instant, you can convert your currencies and seamlessly send and receive money from loved ones abroad.
Understanding taxes and filing requirements
Understanding the Canadian tax system and your filing requirements is crucial to avoid any penalties or issues with the government. As an international student, your tax obligations may vary depending on your residency status and the duration of your stay in Canada.
In most cases, international students are considered residents for tax purposes if they reside in Canada for more than 183 days in a calendar year. As a resident, you will be required to file an income tax return and report any income earned in Canada, including wages from part-time jobs or internships. Familiarize yourself with the tax laws and regulations to ensure compliance and consider consulting a tax professional if needed.
While managing your day-to-day expenses is essential, you’d need to ensure you are getting the most out of your money by using Pesa to send money to and from Canada with zero transfer fees and competitive exchange rates.
Receive and Convert your Money with Pesa
Once in a while you may have your friends or family member send you some money for your birthday, allowance or simply as a gift to help cover your expenses. Using Pesa to receive money from home will save you time and money. Pesa lets you receive and send money with zero charge and no hidden costs. You’ll also get to convert your money from NGN - CAD using the best rates in the market- this gives your extra value for your money. This basically means, unlike regular bank transfers, you get to save on international fees, and never have to worry about delivery times or complicated processes.