10 Financial Mistakes To Avoid When Moving To Canada
Moving to a new home for business or pleasure is a great way to reinvigorate your life and take hold of the things that matter to you. However, making a big move can shake up your finances. A move to another country can do this tenfold.
Preparation is critical when you’re undergoing a significant lifestyle change like this.
If you’re planning on moving to Canada soon, be aware of these common errors people make. Knowing what to look out for can help you to avoid making these mistakes and suffering the consequences.
1) Committing to a Transfer with a Bad Exchange Rate
If you are moving to another country, you’ll want to transfer your assets. These can include moving financial investments and other monetary exchanges that need to occur. One huge mistake that people tend to make is not researching enough to find the best deal on an international money transfer. You can read reviews of the top services on MoverFocus.
It is vital to find a reasonable exchange rate and low fees. This is so that you don’t end up losing half of what you intend to transfer.
2) Not Budgeting Properly for International Moving Costs
Another under-researched category that could end up costing you thousands, if not more, is moving costs.
Moving nationally is one thing while moving internationally is an entirely different ball game. There are dozens of expenses to consider, including:
- Packaging/boxing
- Shipping
- Insurance
- Duty
- Taxes
- Visa Fees
- Unpacking
- And more.
There are two ways that you can prepare for these ever-increasing costs. The first thing you should do is research around to find the best deals. The second thing is to be sure to have expendable, liquid finances that you can use to help cover any unforeseen costs.
Set your budget, and be prepared for hidden fees with extra money just in case. This way, you’ll never be in a tight spot without the ability to handle yourself.
3) Not Taking Time to Learn Local/National Law Basics
A significant aspect of moving to a new country has to do with whether you are a citizen or not. If you are not a citizen of Canada, moving there will be slightly more complicated for your finances. Many individuals end up in a difficult spot and have to spend thousands of dollars paying tickets and fines for laws they didn’t even know they were breaking. Be sure that you understand how airports operate, the types of items you are allowed to ship, and other essential law details before moving.
Know what gets taxed and what doesn’t. Research the type of visa you have, and how long that visa grants you access to the country. Also, know the rights you are granted with that visa. Healthcare, emergencies, and other events can end up leaving you in the lurch with your finances if you don’t know what you are entitled to and what you have to cover yourself.
4) Not Insuring Your Move
Things break during moves. It is almost inevitable that something will show up late or even go missing, especially when moving internationally. This is why insurance is so important. Without insurance, you could end up losing valuable and sentimental belongings in the move and being forced to replace them out of your pocket. Insuring your move means you aren’t liable for these types of mishaps. You are entitled to receive monetary damages for any lost or damaged items.
5) Forgetting to Plan for the Worst
When shipping a lot of items, as well as flying yourself to a new location, timing is everything. Sometimes shipping is unpredictable, though, and packages have been known to arrive early or late. Items arriving early is usually a good thing, but not when you aren’t there to receive them yet. Be sure to have storage ready and available to hold your belongings if they arrive before you do. Without storage, your items can be sent back, and you will have to pay shipping a second time. Postage can take a significant financial toll, especially for large items.
6) Neglecting Your Credit Score
Your credit score is what helps you to get a good deal on the house. Without good credit, you can be stuck with a sizeable down payment and poor interest rate. This means you are paying more than others would have for a home upfront. If you don’t want to be stuck with this huge financial responsibility, try to build your credit before moving. This way, you’ll get a better deal on your down payment as well as the interest rate.
7) Choosing a Moving Company Without Proper Research
Moving companies can easily take advantage of people, but they don’t always do it outright. When you are embarking on a significant move like this, you may not be used to standard prices, and so can’t be sure who is overpricing and who is pricing reasonably. The quickest way to be sure you are avoiding a company that is overcharging is to check for hidden fees.
It is common for a moving company to list a price as an initial quote, and then tack on dozens of additional charges for the final payment. These charges can double or even triple your initial cost. The tough thing about this is that moving companies can withhold belongings in some places if the amount is left unpaid. Obtain a contract that stipulates the exact pricing model you agree to before signing off on a company and handing over your entire life to them.
Other than that, do tons of research. Speak with several moving companies about:
- Pricing
- Hidden fees
- Time frame
- History
- Portfolio.
Speak to prior clients and check their satisfaction with the job. Also, look at the Better Business Bureau to check the company’s standing. These are all sources of essential information that can help you choose the right moving company and avoid a major financial burden.
8) Tying Up Too Much Of Your Money With Little Liquid Capital
The biggest thing about moving is that it is often unpredictable. As much as you plan and budget, there are almost always unintended costs that have to be paid. If you have all your money tied up in the property you are about to move to and the property you are trying to sell, you won’t have enough liquid capital to handle these kinds of emergencies, and you’ll be in a real pinch. When you move, make sure you have easy access to some of your money in case of these types of emergencies.
9) Missing Your Tax Deadlines
When you move to a new country, like Canada, tax laws, deadlines, and rates are different. Brief yourself on this new system, or you could end up having to pay some hefty fines for late or incorrect taxes. Your type of visa also impacts this information. This type of penalty is 100% avoidable with a little bit of research before moving.
10) Forgetting to Adjust the Budget for a New Economy
Remember that Canada’s economy is different from others. You’ll need to convert to the currency and establish yourself with the country’s banks. That process in itself can end up putting you over budget if you set your budget based on your current country of residence.
The Bottom Line
Keep these tips in mind, and you’ll be able to avoid making these major financial mistakes. With the right research, your move to Canada can be simple and on-budget.
