Household Expenses

More than half of a person's take-home pay will go to household expenses, which include:

• Housing
• Heating and utilities
• Food
• Clothing
• Health Insurance
• Transportation
• Car Insurance

Housing, Heating and Utilities

In Canada, you can expect to spend 35% to 50% of your income on housing as mentioned above. This includes the cost of electricity, heating, telephone service, and water.

Many newcomers choose to rent an apartment on a monthly basis. Rental costs vary across cities and across Canada. You can expect to pay between $350 a month to rent a room and up to $2,000 a month to rent a luxury apartment or a large house. Housing may cost less outside large cities. An immigrant-serving organization in the area where you plan to settle can help you find housing that you can afford.

If you want to buy a house, you will probably need to get a long-term loan called a ‘mortgage’. Banks and other financial institutions provide mortgage loans. They decide whether the borrower has enough income, more assets than debts, and a good credit rating. Most will ask you to pay at least 10% of the cost of the house from your own money. In addition to your mortgage payments, you will also have to pay for property tax and household insurance. If you plan to purchase a condominium (condo), there are maintenance fees that you must also consider.

Food

Food costs make up about one-eighth of your take-home pay. This can double if you often eat in restaurants, buy expensive treats, or include alcohol and cigarettes as part of your food budget. Alcohol and cigarettes are very expensive in Canada because they are heavily taxed.

Clothing

Clothing is also a basic expense. Clothing expenses may be under 10% of your take-home pay. Some people shop at re-sale shops. These shops sell used clothing and furniture at very low cost.

Health Insurance

Some provincial and territorial health programs may not cover some newcomers for the first three months they are in Canada. Immigrants are advised to approach the province or territory to see if you will need to buy an additional health program.

Transportation

Many Canadian families own one or more cars. Canadians buy their cars new or used or they lease them. Make sure you consider all of the costs before you decide to buy or lease a car.

• When you own a car you will have to pay for the car's maintenance, gas, monthly loan payments, registration, and insurance.
• When you lease a car you will sign a contract to have the car for a set period of time. You will pay the same costs as you do in owning a car.

Car Insurance

It is the law that all cars must be insured and registered with the provincial or territorial motor vehicle licensing agency where you live. Car insurance can be expensive, but it protects you and other drivers in case of an accident. In most provinces, you can obtain more information by calling the Insurance Bureau of Canada. Occasional Important Expenses

Occasional Important Expenses

Occasional important expenses are bills that do not need to be paid regularly, but are still important. Some examples are buying prescription medicine for a family member (not covered by health insurance), school expenses, and long-distance calls to friends and family in your home country.