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By Devin Partida
Special to Financial Independence Hub
Every day, the United States welcomes people worldwide who epitomize the American dream. After settling into their new country, many buy homes, launch businesses, become outstanding citizens and live prosperous lives.
However, moving to another country often presents financial challenges. Those new to the U.S. should remember these tips when setting up and managing their assets after immigrating.
1. Open a Spending Account
A spending account will allow you to store your money and make everyday transactions safely, such as clothing or groceries. It may help to see if your bank in your native country has international branches. In that case, you could likely open an account in the U.S. without changing institutions.
TD Bank and RBC Bank are just some of the Canadian financial institutions with U.S. branch offices. If not, many banking institutions simplify opening a new spending account and may even offer some perks.
2. Ask Questions
There is much to know about financial management in a new country. The best way to learn is to reach out for support. Some experts — bankers, accountants and financial advisors — specialize in helping immigrants and will offer guidance on taxes, investing, and other benefits.
Likewise, seeking community organizations or local government agencies to bring yourself up to speed is a good idea. Community groups in particular are an excellent way to connect with other immigrants, and learn with and from one another.
3. Build Credit
Building credit will allow you ample opportunities in your new country: a daunting feat if you’ve established excellent credit in your native country and must start over. Fortunately, some apps allow you to import your previous credit.
Like any U.S. borrower, establishing legal residency and maintaining good credit is crucial for loan eligibility. Lenders require at least two to three years of credit history to qualify. With excellent credit, newcomers can take out a loan to purchase a home, refinance or take out a second mortgage. You can use a second mortgage to pay off credit cards or fund home projects.
4. Set a Budget
Immigrating to the United States can be expensive, with international relocation costs totalling anywhere between $2,000 USD and $10,000 USD. With these and the various expenses that follow, it’s important to create a budget for your relocation.
U.S. goods may cost less or more than your native country. Once you arrive, you’ll have a much better idea of what to expect from your monthly spending. Items you may not consider at first are car and health insurance, or the fees to obtain a driver’s license. Creating a budget by categorizing your spending — food, medical, housing and transportation — will help you determine how much you’ll need to set aside from your paycheck.
Those still unemployed should use whatever money they have already saved and modify their budget once they find work. In the meantime, Bank of America, Chase and Wells Fargo offer built-in budgeting tools to help you.
5. Create an Emergency Fund
Nearly 36% of adults cannot afford a $400 emergency expense. Therefore, setting up an emergency fund within your bank account is best to cover unforeseen costs.
An emergency fund will help you afford essential goods, auto repairs, medical events or rent if you lose your job, so set aside part of your paycheck for one. You can always increase your contribution as you build up your savings. Try using various savings tools to move money into your account each month automatically.
6. Embrace Technology
Banking tools have made your money more accessible than ever and provide better personal control over finances. Mobile banking in particular increased from 15.1% to 43.5% from 2017 to 2021.
Managing money with a smartphone allows you to access funds and check your balance with the push of a button. You can also transfer money to different savings accounts or send it to people you know.
Online banking also has its benefits, such as lower fees. Due to the rise in online banking, many traditional banks — such as Citibank and PNC Bank — have eliminated or decreased overdraft fees.
Money Management is a Learning Curve after Immigrating
Aside from understanding the conversion rates and different payment forms, setting up a banking account and building credit is critical when you immigrate somewhere new. Utilize all resources and support available to get your finances under control. Managing your money is the first step to a financially secure, successful life.
Devin Partida is the Editor-in-Chief of ReHack.com, and a personal finance writer. Though she is interested in all kinds of topics, she has steadily increased her knowledge of the intersection of finance and technology. Devin’s work has been featured on Entrepreneur, Due and Nasdaq.
