Moving to a new country presents numerous challenges, like adapting to your new culture, learning a new language or finding work. If you’ve immigrated to the United States, managing your finances should take priority.
Up Next: 5 Ways To Pick Your Next Investment, According to Experts
For You: 9 Easiest Ways To Maximize Your Savings in 2024
You may not feel too comfortable discussing money with others, but making the right financial moves from the start can make the difference between struggling and feeling a sense of security. Below are six financial steps to take if this is your case.
Choose the Right Financial Institution
According to Angelo Crocco, CPA, CGMA, and owner of AC Accounting, selecting the right financial institution is not just about where you keep your money; it’s about building a relationship that supports your financial journey.
“I strongly encourage newcomers to look beyond traditional banks. Credit unions and community banks often provide more personalized services and lower fees,” he said.
He explained that many of these institutions have programs specifically designed for immigrants, including financial literacy workshops that can be invaluable.
“For example, I have witnessed firsthand how these workshops can equip newcomers with essential skills such as budgeting, saving, and understanding credit, making a significant difference in their financial management.”
Find Out: 7 Reasons a Financial Advisor Can Grow Your Wealth in 2024
Utilize International Banking Relationships
“As an immigrant, you hold the power to manage your money efficiently by opening and holding accounts in both your native country and in America,” said Scott Waters, payment expert and founder of Process Payments Now.
He explained that many immigrants overlook the advantage of seeking U.S. banks with international affiliations. “This empowerment allows you to send and receive money, convert currency, or open an account in a foreign country at a lower cost.”
He recommended looking for institutions that offer global accounts or reduce remittance charges to foreign countries. “This can save you hundreds of dollars annually, giving you more control over your finances.”
Choose Remittance Services That Are Transparent
“One thing most families with undocumented members spend money on monthly is remittances, or payments sent to loved ones back in their home country,” said Yanely Espinal, director of educational outreach at Next Gen Personal Finance and author of “Mind Your Money.”
However, she noted there’s no real national attention on remittances. “Sadly this has led to a lack of transparency in the space, costing families billions in hidden fees.”
One tip, she advised, is to choose a remittance service that’s transparent about all fees, like Wise, rather than going with convenient options that all too often sneak in mid-exchange rate markups that reduce the amount of money received by your loved ones in the end.
“Always compare the amount received at the end of the transaction instead of comparing the costs and fees associated with sending your remittance payment,” she said. “This may not sound like a big deal, but it is!”
Espinal observed that remittances from the U.S. to low/middle income countries reached hundreds of billions of dollars in 2023, according to the World Bank, and recent research that found Americans lost nearly $6 billion to hidden exchange rate markups.
“Those funds could’ve been used for necessary items like groceries, transportation, school supplies, and more.”
Utilize Alternative Credit Scoring
One of the challenges many newcomers face is establishing credit in a new country. According to Crocco, traditional credit scoring models often overlook the full picture of an individual’s financial reliability.
“I recommend exploring alternative credit scoring systems like Experian Boost. This innovative tool can incorporate utility and phone payment histories, allowing newcomers to establish a credit profile more quickly,” he said.
By leveraging their consistent payment history, he said individuals can improve their credit scores and access better financial products, ultimately facilitating their financial integration into the U.S. economy.
Explore Public Benefits and Tax Credits
Many newcomers may not be aware that they qualify for various public benefits that can alleviate financial pressure during the initial adjustment period.
“Programs such as the Supplemental Nutrition Assistance Program (SNAP) and the Earned Income Tax Credit (EITC) can provide essential financial relief,” said Crocco. “For instance, I have seen clients significantly reduce their living expenses through SNAP, allowing them to allocate more funds toward savings and essential investments.”
Additionally, he said understanding and accessing tax credits can offer substantial financial support, which is crucial for those starting anew.
Waters emphasized the same in regards to optimizing tax credits and deductions. “Another less popular perk of immigration is the opportunity to claim some tax credits and deductions that reduce one’s tax liability.”
He encouraged immigrants to check the Child Tax Credit for support towards their children. “Those with jobs should take advantage of the Earned Income Tax Credit. In other cases, such as those paying for relatives in different countries, you may also claim them as your dependents for specific IRS provisions.”
For those new to the U.S., Waters recommended you learn about taxation or seize the opportunity to use a tax consultant as soon as possible for your benefit in the long run.
Learn About Non-Profit Resources
“There are numerous non-profit organizations dedicated to supporting immigrants that I often refer my clients to,” said Crocco. “These organizations, such as the National Council of La Raza and local immigrant resource centers, provide free financial counseling and tailored assistance.”
They offer invaluable resources, including workshops on budgeting, credit building, and financial literacy.
“I’ve seen firsthand how participating in these programs can transform the financial outlook of newcomers, equipping them with the tools and knowledge necessary to thrive in their new environment,” he added.
Waters agreed that you should take advantage of financial literacy resources for immigrants. “Various nonprofit institutions and community organizations across the United States provide or offer affordable financial literacy classes tailored to immigrants.”
He said these programs not only limit themselves to teaching the basics of budgeting, but also include skills like utilizing the American banking system, getting credit and planning finances in the long run.
“Immigrants should look into these programs early to minimize the chances of making costly mistakes and enhance their financial well-being faster. This step is often overlooked, yet such steps can accelerate your quest to settle into the center of the American economy.”
More From GOBankingRates
- 7 Best Items To Buy at Five Below Before This Winter
- Florida's Retirees Are Fleeing: Experts Predict These 5 States Will Be Top Retirement Spots in 10 Years
- Here's How To Become a Real Estate Investor for Just $1K Using This Bezos-Backed Startup
- 3 Things You Must Do When Your Savings Reach $50,000
This article originally appeared on GOBankingRates.com: 6 Financial Steps To Take If You’ve Immigrated to the US
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
