How to survive the economic crisis

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By Claudio Munoz

This article is not about the causes of the crisis, it’s about dealing with it and moving forward. We – as always – want you to succeed in Canada, so instead of worrying, let’s get to work and come up with ways to deal with it.

Light shines brighter in the darkness

Analysts and media in general use unemployment rates to illustrate the health of the economy. When the economy is strong, the unemployment rate tends to be low and a person who wants a job is likely to experience little trouble finding one. But when the economy is in bad shape or in a recession, unemployment tends to be higher and getting a job is more difficult.

Canada’s unemployment rate in January 2009 was 7.2 percent – now higher than during the economic downturns of the 1980s’ and 1990s’. At the peak of the Great Depression in Canada (1933) the unemployment rate was 27 percent.

Even during good times, newcomers can find themselves struggling for job. “It doesn’t matter whether we’re in a bad economy or not, recruitment and hiring is always a human driven process,” Karl Espiritu, Diversity Careers’ director says. “Available jobs are fewer and more competitive than ever and it is important to be creative and flexible. Keep an open mind about other job opportunities even if they are on a contract or temporary basis until you find something better.”

He offers these job hunting tips:

  • Smile: Stay optimistic. “Your personality and well-being reflects your approach in job searching.”
  • Stick to the plan: “Make sure you stay on the radar and make people aware of your skill sets and collect the information on the people you meet.”
  • Use specialists: Post your résumé on specialty-niche job sites and ensure that your profile is up-to-date. The advantage of niche career sites is that employers/recruiters target jobseekers, like newcomers, belonging to a certain diverse group and with particular backgrounds.
  • Move your limits: This is hard, but if you accept pay that is lower than what you are searching for, you can prove yourself as a part of the solution and a valuable team member.
  • Crisis = opportunity: Use the economic meltdown to your advantage by doing some ground work on your targeted company that you want to apply for. Find out what they need, what they’re going through, what jobs need to be filled and how you think you can add value to the company. Knowledge is the key when you are trying to make first impressions.
  • Look at the big picture: Don’t just focus your search in one industry. Try other opportunities where you can gain new experience and develop from there.
  • All for one: When attending job fairs or networking events, bringing a buddy or a fellow newcomer can give you more confidence when speaking to people and create more of an opportunity to start a conversation. Always send thank you notes after meeting someone from a job fair or networking event.

If you’re employed…well, be the best worker!

Now, if you are working, the idea is to keep doing it. The survival of the company you work for can mean your own survival, so be ready to wear the company’s T-shirt.
Espiritu explains that “in order to keep your job, you must first be open to accepting additional responsibilities that are outside your comfort zone. Talk to your boss about cross training and taking additional courses. “Assist other colleagues in their workload. Be a team player!”

Managing your money: keep an eye on your wallet

Now, let’s talk finance. Forget all those stock losses and company bankruptcies. You still need to buy food, clothes, and even movie tickets once in a while.

Like it or not, though, you need to control your expenses and debt. Period. That’s rule number one when it comes to spending your money (even when there’s no crisis).

Laurel Ostfield, a Capital One spokesperson, suggests that you, “Develop a budget and stick to it. Not just what you’re spending money on, but how much money is coming in. People need to figure out where the money is going and where it is coming from. Keep track of your daily purchases. Definitely pay more than the minimum every month on your bills. And pay attention to any late payment recall if you are getting letters from credit agencies… these could be signs that your credit history is in jeopardy.”

More important than getting or using credit is using it wisely. A credit history is key to your financial success. “In Canada you may need a credit history just to rent a house, or even a car,” Ostfield explains.

Capital One just launched a website called “Road to better credit” ( to help people build their credit. “It’s for people who have damaged credit or no credit and don’t know how to build it”, Ostfield explains. “There’s a section called build your credit on that website that is great for new Canadians.”

The website uses simple terminology; there’s a glossary of terms and it’s really interactive. You can find information on what you need to do and how to do it. “You can even send a question to Credit Canada, which is non-profit credit counselling company,” she explained. The institution also provides newcomers with a guaranteed Master Card for newcomers. No matter what your history of credit, you can get one – for an amount to be determined by the institution – that would allow you to start building your credit. Even in times of crisis.

Rania Llewellyn, Scotiabank Vice President of Multicultural Banking suggests, “Shop for the right [credit card]. Look at the interest rate and compare. Look at the different types of cards: loyalty programs, reward, cash back – you can collect points or get money back. Focus on the level of interest you pay…and make sure you pay on time.”

Just keep it under control. “Tear down your high interest debt,” Llewellyn recommends. “Some credit cards, department stores credit cards, would be the first thing to make sure you pay down first.”

And if you need help, ask for it. There are some really great credit counselling agencies all across Canada where people are willing to help.

Saving Money: Tax Free Saving Accounts

Now may be a good time to save some money, and a good way of doing so is to take full advantage of your tax savings. “Be aware of what tax credit options are available and apply if your income allows,” suggest Llewellyn. (For more information on RRSPs and RESPs see Canadian Newcomer Magazine #24, “Investing in your Future”, by Gilda Spitz.) Llewellyn explains that Tax Free Savings Accounts (TFSA) are now available.
“Your savings will grow tax free for your lifetime. There are no restrictions to get one – any newcomer is invited – as long as you’re a permanent resident.”

A report from CIBC’s Managing Director of Tax and Estate Planning, Jamie Golombek, described the tax-planning advantages of TFSAs. According to his report, these accounts could be an attractive opportunity: individuals can name surviving spouses and partners as “successor account holders” – ensuring the tax-free status of a TFSA will continue after death – and those who leave Canada can still hold a TFSA and continue to benefit from some of its tax exemptions as non-residents, among many other benefits.

“With increased choice comes the increased need for solid advice and planning, making now the perfect time to meet with a financial advisor,” Golombek recommend. So go to your bank and talk with an advisor. They can help you manage your money.

In case of emergency, insurance can be important. “If you have a credit card or a mortgage with a bank you should consider paying extra for insurance. So if anything happens you know that your credit card or mortgage is being taking care of,” Llewellyn says.

Scotiabank has two particular savings programs that caught our attention. Start Right is a special program for new immigrants that includes chequing and saving accounts, Western Union money transfer services, mortgage programs and so on. Check their website, and click on “Program for New Canadians” in the menu. Bank the Rest is a savings account attached to your chequing account. “Every time you use your ATM card, every time you sweep it to buy something, a percentage of it goes to the Bank the Rest. “It’s like a virtual penny jar,” explains Llewellyn. “It’s saving while you spend.”

The end of the tunnel

Like everything in life, the crisis will end. And maybe even sooner than you think. The key to make the most out of the crisis is to be prepared.

“Don’t let the market determine your future,” Espiritu says. “Use this to your advantage by not keeping your brain idle. New opportunities will be created soon. Research other industries that are emerging, look of available resources…perhaps taking courses to prepare for a career change. Upgrade your skills; take courses that will supplement your career.”

Be careful with your money, learn to manage it and make the most out of it. In every issue of Canadian Newcomer Magazine, the Financial Consumer Agency of Canada (FCAC) presents tools or tips to manage your money. You can check them here.

Remember that managing your money is a life-time activity.

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