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Toronto— When it comes to setting money aside, Chinese and South Asian newcomers to Canada place a much greater emphasis on savings than residents who were born in Canada, according to new research from RBC. Half (50 percent) of those who have lived in Canada for five years or less say they save more than 10 percent of their income, compared with 19 percent of those born in Canada. Only two percent of newcomers said they save less than one percent of their income, whereas 28 percent of those born in Canada make this claim. The research is based on poll respondents who reside in British Columbia or Ontario, two provinces that attract many newcomers. Also Read - FBI Adds Hindus and Sikhs to Hate Crime Data, Recognizes Violence Against NRI Community
“Newcomers have a healthy approach to saving, and regardless of income, seem to have a greater focus on putting money away,” says Christine Shisler, Director, Client Strategy, RBC. “While balancing a new life in Canada, newcomers place a priority on savings and financial planning – a solid start to their journey in a new country.”
According to the research, newcomers and those who are Canadian-born share common financial goals for the next five years, such as having enough money to cover daily expenses (77 percent of newcomers, 75 percent of Canadian-born) and saving for retirement (67 percent and 59 percent respectively). Both groups also aim to pay down non-mortgage debt (52 percent versus 54 percent).
Not only do newcomers save more of their income, but they also have very different savings goals. Newcomers are more likely to place a priority on starting a small business (41 percent) and education for their children (61 percent) than Canadian-born respondents (nine percent and 21 percent respectively).
There are also marked differences around planning for the future: 54 percent of newcomers are saving in the event of illness or death in the family (compared with 31 percent of Canadian-born respondents).
“Newcomers have similar long-term goals as those born in Canada, but may have a different perspective or specific needs relating to settling in a new home country,” said Shisler. “With a solid propensity to save, we want to ensure that newcomers are taking advantage of the many Canadian resources and tools available to grow their savings and realize their financial goals more quickly.”
Ms. Shisler offers the following savings tips:
- Understand your full financial picture: Sit down with a professional to take stock of all of your expenses and income to determine how much you can save each month. Take an objective look at your overall expenses and see how those compare to your income. It’s important to be realistic about the amount you can put away to ensure that you actually stick with your plan. Take advantage of online tools and calculators to help create a budget or visit a branch to speak with an RBC advisor.
- Set your goals and understand the savings and investment vehicles to help you reach them: Think about your financial goals and what kind of savings and investments you’ll need to get there. A good financial plan should have a mix of short-term and long-term savings goals, matched with the savings/investment vehicle that is most appropriate for those goals. For instance, a high-interest savings account can support a short-term goal; a Tax-Free Savings Account (TFSA) can support both short- and long-term goals; a Registered Retirement Savings Plan (RRSP) can support long-term goals.
- Make your savings automatic: One of the easiest ways to put money away is to put it on auto-pilot. For example, open a high-interest savings account and set up regular contributions that are directly withdrawn from your main banking account.
- Re-evaluate: Review your financial plan at least once a year to ensure that you’re on track with your original plan. Be prepared to make adjustments if you encounter unexpected expenses or life changes.
This story originally appeared on The Weekly Voice.