10 Financial Tips for New Immigrants
There are a lot of things to learn and take care of when you're newly arrived in the U.S. With so much to do; it can be hard to know where to begin. But because finances are one of the most important aspects of life in any country, they're a priority. While there is a lot to learn, these 10 financial tips for new immigrants will help provide a solid foundation to build your new life.
Obtain an ITIN
An ITIN (Individual Tax Identification Number) is a number that the IRS uses to identify taxpayers who are not eligible for Social Security numbers when filing tax returns. No particular residency status is required to apply for and obtain an ITIN; undocumented immigrants are eligible.
ITINs have other uses, too, and will make things like opening a bank account, renting an apartment, building credit, and opening a brokerage account to begin investing easier.
2. Open a bank account
A bank account offers several benefits; it's a safe place to keep your cash, a convenient and free place to send and receive money and makes budgeting and saving easier. You do not have to be a U.S. citizen or have any particular immigration status to open a bank account; you must simply be able to prove your identity.
3. Start building credit
You need a credit score in the U.S. A credit score is required for a number of things; opening a credit card, borrowing money, renting an apartment, and in some cases, obtaining a job.
Your credit score is based on your credit history, which presents a problem for new immigrants. Any credit history you may have had in your home country doesn't follow you to the U.S., so you're starting all over.
That's where Upwardli can help! Upwardli was created to help those new to credit build credit quickly, easily, and without the barriers people in that position often face.
4. Investigate the cost of living
The U.S. is an enormous place with a lot of differences from region to region, state to state, and even city to city. One of those differences is the cost of living, the amount of money you need to pay for basic expenses like housing, food, taxes, and healthcare in a particular place and time period.
The lower the cost of living in your area, the easier it will be to achieve your financial goals like debt management, homeownership, retirement planning, and estate planning. In the U.S., the areas with the lowest cost of living are predominately in the Midwest and South.
5. Explore local resources
Again, because the U.S. is so vast, the resources available for new immigrants or anyone vary widely. Resources can mean things like public transit, parks, and bike lanes. And it can mean an already-established immigrant community, free or low-cost medical resources, and local aid organizations.
Typically, larger, more urban areas will offer more resources, and that's something to consider when choosing an area to live in.
6. Create a budget
Budgeting is the cornerstone of a healthy financial life. Expense tracking, cash flow management, a budget gives you critical information. There are many ways to budget, including the old-fashioned pen and paper, but we like Mint.
Mint is a free online budgeting program; it's easy to set up and maintain. As far as a budgeting method, we love the 50/30/20 method because it's straightforward and uncomplicated.
7. Build an emergency fund
Arguably, even more, important than a budget is an emergency fund. Without an emergency fund, you can end up in debt via credit cards or payday loans or in a really bad situation that could threaten your job, health, or home.
An emergency fund is cash saved for an unexpected expense that there is no time to save for, like a vehicle repair, a medical or dental expense, or a period of unemployment.
Ideally, an emergency fund contains enough to pay for six months' worth of essential expenses (housing, groceries, utilities, debt repayment, vehicle payments, etc.), but that is a long-term financial goal for most of us. In the shorter term, aim to amass a $1,000 emergency fund. Many of life's little emergencies clock in at well under $1,000.
8. Find healthcare
Healthcare is costly in the U.S., and non-citizens are typically excluded from discounted health insurance through the Affordable Care Act and programs like Medicare and Medicaid.
Non-citizens can buy private health insurance, but it's prohibitively expensive for most people. The average annual cost of a private health insurance premium for a single person is $7,911; for a family policy, it's $22,463.
However, no one, regardless of their immigration status, can be denied medical treatment in the U.S. If you're ill or injured and come to a hospital, you will be treated. You'll be billed, too, though, so it's best to research free and low-cost healthcare resources before you suffer a health crisis.
The National Association of Free & Charitable Clinics is a great resource.
9. Learn the ropes
Depending on where you immigrated from, the U.S. personal finance system may be very different or very similar to what you know, but either way, it's important to learn the ins and outs of the system you're now a part of.
Upwardli has created dozens of resources to help you learn all about the U.S. personal finance system, from credit to interest to banking and lots more.
10. Beware of scams
All of us are vulnerable to scams because there are so many varieties, and scammers tend to be at least one step ahead of those tasked with catching them. But immigrants can be especially vulnerable. They are typically not entirely familiar with the U.S. personal finance system, and the path to becoming a citizen is long and expensive, and some people prey on those vulnerabilities.
The U.S. Citizenship and Immigration Services (USCIS) has a helpful guide to common scams that target immigrants.