Six steps to financial well-being every immigrant woman should master
Learn the basics of healthy finances to set yourself up for success
Written by Anamaria Ferferi
We know that setting yourself up for success in a new country is not a simple fill-in-the-blank form. Establishing yourself is a long process, one that involves making new connections, finding a job, finding housing and building a financial cushion. As an immigrant woman, you may be doing this not just for yourself but also for your family.
Financial stability is a crucial pillar for all immigrants to the US. It can also be an overwhelming topic. Knowing where to start can feel like an impossible puzzle when you see the countless banks, accounts and advice (or lack thereof) coming from every angle.
So we’ve broken down the six basic principles all immigrant women should master in order to set themselves up financially. And if we missed anything or if you have suggestions for future stories on finances, please comment below and let us know!
1. Build a budget
Setting up a budget for your household is a simple, yet powerful way to track money coming in and out. It can help you see which areas you’re spending more or less in, and also help you track your progress in saving money.
There are many free templates for budgets online. This one is recommended by the US Federal Trade Commission: Make a Budget – Worksheet. You can print it out and fill it in by hand if you prefer to work that way. If you’re comfortable using apps to manage your finances, many banks and investment firms offer tools to help you track money in/money out and your financial goals (these are often labeled “personal financial management tools” when searching Google).
If you send money overseas, it’s important to include it in your monthly budget so that you capture all funds going out (even if you don’t consider sending money to family an “expense”).
2. Automate your savings
Building up your savings doesn’t have to be a chore. Most banks and financial apps now offer automated savings features where you can schedule a fixed amount of money to be transferred from your checking account to your savings account at a set frequency. You can just set it and forget it.
If you don’t have a savings account, opening one can make tracking your budget and savings easier. Low-cost or free accounts are available from many institutions nowadays. And many will waive the fee on a basic checking and savings account if you set up a repeating deposit into the account (for more information on opening bank accounts, see the “Additional Resources” section at the end of this post.)
3. Prepare for the unexpected
An emergency fund is an important part of your financial well-being because it helps you be prepared for the unexpected. A temporary loss of income, a health issue, a family member in distress — these situations hit us all at one point or another. You may find yourself needing extra cash in moments like these. So an emergency fund can help you handle these situations without throwing your regular savings plan out of balance.
The US Federal Financial Literacy and Education Commission suggests saving for at least three months’ worth of expenses (for more guidance, see the Commission’s Save and Invest website). It may feel intimidating to think about an emergency fund during the current pandemic, but this situation shows just how important it is to have money set aside for unexpected crises. Even small amounts like $5 or $10 a week can help get you started.
4. Save according to specific goals
In addition to an emergency fund, you may want to set aside specific pots of money for goals like starting a business, traveling, or even a new apartment. It can be very motivational to be reminded of these goals when you check on the progress of your savings.
It can also be helpful to separate your short-term needs from your longer-term goals as you plan your finances. Many banks offer goal-based savings features as part of their regular savings accounts. Explore what your bank or financial institution offers online or with a banker in the branch.
5. Build credit
When you hear people talking about your credit, usually they mean your credit history. Your credit history describes how you use money. How many credit cards do you have? How many loans do you have? Do you pay your bills on time? Businesses want to know if they can lend you money (credit card, auto loan, etc.) and if you can pay them back on time.
Credit history is something you will build over time and you can check your credit report to see how you’re doing. By US law, you are allowed to access your credit report for free every year from the credit reporting agencies. You can do this by:
- calling Annual Credit Report at 1-877-322-8228 or
- going to AnnualCreditReport.com
6. Invest extra funds
We won’t get into details about investing here, as that is something only registered investment advisors should be doing. But we did want to note that, if your employer offers a 401(k) plan and says they will match your contributions (usually this will be up to a % of your monthly salary), that is extra money your employer is willing to give you for investment and is definitely worth considering.
Whew.
That may have been a lot to take in. But it is completely worth investing the time now to set yourself up for financial well-being in the future. It’s not something that can be accomplished overnight — but since you’ve already made the decision to immigrate to the United States, you already know all about hard work and perseverance.
Want to learn more?
We recommend starting with your local community-based organization. If you are not comfortable using English in a financial setting, a community organization that speaks your language can be a great resource for you, explaining what you need to do and the documents you will need to get started on your financial well-being journey.
Your local organization may also have recommendations for services to send money overseas that work particularly well for your home country.
If you aren’t aware of any local groups, the New York State Education Department put together this handy list of organizations dedicated to serving immigrants across New York City.
Additional Resources
Opening bank accounts: You can open checking and savings accounts in a bank branch or online. You will need a form of identification. ID requirements will vary based on the institution and may include your passport or drivers’ license, proof of address, etc. Many banks will accept non-US forms of identification so don’t be discouraged if you don’t have a US-issued form of ID.
Always check that the institution you choose is insured by the FDIC (Federal Deposit Insurance Corporation). This is an independent agency set up by the United States government to ensure that consumer deposits are safely held by banking institutions (up to a certain amount).
More financial education:
There are also plenty of resources on the internet that can help teach you and your family more about financial topics. Some comprehensive, free resources are listed below:
- The US Federal Trade Commission has a great financial education website where you can learn the basics of managing your money, credit, loans and how to spot scams
Smart About Money and Cash Course are completely free to use and are not affiliated with any corporation or government entity. They are both funded by the National Endowment for Financial Education, a non-profit organization.
