My Financial Journey as an Immigrant to Canada
When my family and I moved to Toronto in January of 2016, we had high hopes for a fresh start—and felt a bit anxious about what life would be like in a new country. We wanted to pay off debts from the Philippines, start saving, and build wealth in what we saw as a land of opportunity. But as we settled in, a friend who’d been here for over 30 years shared an odd piece of advice: “Don’t worry about debt; it’s totally normal here!”
This was my first wake-up call about finances in Canada: debt was considered “normal.” Yet, I was determined to pay off our debts back home. With a $1,500 limit on my first-ever credit card, no job yet, and only a few connections, the same friend even suggested I invest in a networking business—on credit! I felt uneasy and began to question our decision to move. The cost of living was higher than expected, and the financial pressure was already becoming overwhelming.
The “Aha” Moment
In searching for help, I came across Dave Ramsey’s The Total Money Makeover, and it was like finding a lifeline. The book provided a clear, Bible-based roadmap for budgeting, getting debt-free, saving, and building wealth. It was the first time I’d heard someone say that living a DEBT-FREE life was possible and financial independence is attainable – even on a modest income.
Learning to Be “Weird” About Debt
Armed with this new perspective, I quickly realized my friend was right: in Canada, debt was indeed the norm. But I didn’t want “normal”; I wanted financial freedom.
6 Steps that helped me transform my finances—and became debt-free!
1. Budget Like a Boss!
Let’s be real—saving money and achieving financial independence would’ve been just dreams without a budget. My first attempt at budgeting shocked me: expenses piled up fast, and I finally understood where we were leaking money. This was my turning point.
The budgeting method that worked best for me is the Zero-Based Budget. Here’s how it works: every dollar gets a job—whether it’s for bills, savings, or debt repayment. It’s not just tracking; it’s making sure each dollar works toward a goal! By reallocating money from unnecessary expenses, like pricey coffee and unused subscriptions, I made real progress. Having a plan for every dollar gave me confidence and control, and seeing it balance out to zero at month’s end meant I was truly steering our finances.
2. “Starter” Emergency Fund – at least $1,000
Before diving into debt repayment, I set aside $1,000 as a “starter” emergency fund (“starter” because it’s not done yet – it’s still to be continued). It may seem like a small amount, but it’s a powerful first step. Here’s why: unexpected expenses are a given, and having this fund meant I could cover minor surprises without reaching for a credit card and accumulating more debt.
This fund isn’t about saving big—it’s about protecting yourself and staying focused on debt repayment. While a fully funded emergency fund (3–6 months of expenses) is the long-term goal, starting with $1,000 lets you quickly create a safety net and tackle debt faster. Once you’re debt-free, growing your emergency fund becomes a lot easier without interest payments weighing you down. Hitting this first goal will boost your confidence!
3. The Debt Snowball Method
The Debt Snowball Method was a game-changer for me. Here’s how it works: list debts from smallest to largest, ignore interest rates, and focus on paying off the smallest first. Each time I knocked out a smaller debt, it was a win—and that keeps me motivated to keep going.
For example, if you have debts of $500, $1,500, and $5,000, you focus on the $500 debt first, then roll that payment into the next one. Each small victory added momentum, building the discipline and financial habits to reach your goals.
This method taught me that paying off debt is about progress, not perfection. It’s a marathon, not a sprint—and with each step, my financial future looked brighter.
4. Fully Funded Emergency Fund
After becoming debt-free (cue drumroll!), it was time to kick it up a notch and fully fund that Emergency Fund! This means saving enough to cover at least 3 to 6 months of your household expenses.
Why 3 to 6 months, you ask? Life is full of surprises, and not all of them are good. Whether it’s a job loss, unexpected medical expenses, or major car repairs, having an Emergency Fund provides a solid safety net that ensures you can weather any storm without falling back into debt. It’s all about financial security!
Where to stash it? A high-interest savings account (HISA) is a great choice for growth and easy access when you need it most. Just keep it separate from your regular bank account!
5. Taking Advantage of Government-Registered Savings Accounts
Canada has some powerful tools to help build wealth, such as the RRSP (Registered Retirement Savings Plan), TFSA (Tax-Free Savings Account), and RESP (Registered Education Savings Plan). These accounts weren’t familiar to me at first, but learning about them took my savings skills to a new level.
TFSA: Don’t be misled by the ‘Savings’ label—this account is ideal for investing. It’s tax free and offers flexible, penalty-free withdrawals, making it perfect for short- to mid-term goals like vacations or buying a car. I initially parked my TFSA in a basic savings account, but later discovered it could be invested in mutual funds, ETFs, and stocks, unlocking much better growth potential.
RESP: If you have kids, the RESP can be a lifesaver. I set up one early, and now, nearly nine years later, I can rest easy knowing our eldest can attend university without loans. It’s a long-term gift way better than pricey toys or clothes, and every little sacrifice made years ago has paid off. Plus, the government matches 20% of your contributions—free money!
RRSP: Perfect for retirement, the RRSP is tax-deductible, which reduces your taxable income and it grows tax free until retirement, when you’re likely in a lower tax bracket. It’s a strategic way to save for your future while lowering taxes now.
6. Living Below Our Means and Staying Focused on Our Goals
The consumerism in Canada is intense, and it’s easy to get swept up in spending. But by living below our means and not keeping up with the Joneses, we avoided debt and built up our emergency fund. Sticking to our budget meant saying no to some splurges but saying yes to future security. By contributing consistently to our RRSPs, TFSAs, and our kids’ RESPs means I’m confident we won’t have to rely on our children for support in our retirement years and they don’t have to start life with financial baggage.
Financial Independence isn’t just about numbers; it’s about freedom from financial stress and the ability to live on our terms. And here’s a crucial step: before diving into investments, make sure you’re debt-free and have an emergency fund in place. Even the best investments can’t out-earn the interest on debt, so get that snowball rolling first!
Almost 9 Years Later…
Looking back, I’m incredibly grateful I didn’t jump on the “normal” debt bandwagon. Living debt-free has given me peace and freedom that no temporary splurge could ever match. If you’re new to Canada and feeling the pressure to fit into the financial “norm”—remember, you don’t have to follow the crowd. Living within your means, setting a budget, and staying focused on your goals will bring true security and fulfillment.
If you’re feeling overwhelmed by the financial expectations here, know this: blending in isn’t necessary for success. Achieving financial independence might seem “weird” to some, but it’s worth every effort, I promise. And who knows? Maybe one day, we “weird” folks will redefine what “normal” looks like in Canada!
