Three Top Financial Goals for Immigrants
There is something magical about the energy of the New country. It feels like you have the opportunity to start a new life, much like what you do in your new country. All of this change can be exciting and overwhelming as you figure out how to find your way in getting a bank account as immigrants.
This is also a great time to set some financial goals for the new year and beyond. Setting goals for your finances can make it easier to manage daily affairs and set you up for future success.
Identifying a few clear goals is the key to making sure you can move forward. If you’re not sure where to start, we’re here to help. These are our picks for the top three financial goals an immigrant should have in 2022.
1. Open a bank account in your new country
Opening a bank account is the most crucial financial step for newcomers to countries like the United States, the United Kingdom, and Canada. A bank account makes it possible to transfer money from your old country, to safely use your new income and to pay bills.
How to open a bank account as an immigrant
Opening a bank account can be quite simple. You can use your social security number (SSN) or your individual taxpayer identification number (ITIN) depending on the bank. In some cases, banks may also require proof of identity such as your passport or other form of photo identification issued in the United States.
Other items you will also need are: money to make a minimum deposit, your current address and phone number.
The Consumer Financial Protection Bureau offers a great checklist when you go to open an account, including questions for the bank representative to help you save money on fees.
2. Choose a smart method to send money home
If you’re like most immigrants, part of your annual budget is dedicated to sending money home to support relatives or finance investments at home.
Sending money abroad using your bank account can work, but it often comes with big fees and big exchange rate hikes.
This year, make it your goal to try out a money transfer app if you haven’t already. Choosing an app like Remitly will often save you money on fees, especially when compared to traditional money agents or wire transfers. Plus, it’s secure, easy to use, and doesn’t require you to go to a physical location to complete your transfer.
3. Track your cash flow
Understanding what you are earning and spending is the foundation for achieving your financial goals. This year, make a plan to track your cash flow. You’ll be surprised how much it helps you manage your money.
For example, if you want to save money to book flights home, you’ll need to know how much you can afford to save. If you find it difficult to pay your rent, having a complete overview of your income and expenses can help you determine your ideal housing budget.
The first step in managing your cash flow is to get a good idea of all the numbers involved in your finances. That means finding out:
Your net salary (what you earn after taxes)
Your fixed expenses (regular bills that are the same amount each month)
Your variable expenses (regular bills that can vary in amount)
Your occasional expenses (less frequent bills, such as car bills)
Understanding what your expenses are will help you pay them. That’s because knowing these exact amounts will help you know how much you need to earn to cover them. Subtract your expenses from your take-home pay, and you’ll be on your way to a budget.
Once you have recorded your income and expenses, take a look at your expenses. It’s related to what you just wrote down, with one important difference.
Tracking your spending means recording every time you spend money. This will help determine if you are using your money wisely and help you change habits.
Don’t worry. There are many great tools to help you do this. Get started with the simple spending tracker from the Consumer Financial Protection Bureau . Try it for two weeks and you’ll be surprised how much you learn.
The final result
Setting goals is to help you achieve your goals and dreams. It took you a lot of work and effort to move here, so pat yourself on the back for that first. But the work is not done – arm yourself with the knowledge you need to move forward.
The more you apply the acquired knowledge towards your goals, the more chances you will have to continue to prosper in your new country.
Learn more: frequently asked questions
How do you choose a bank account?
Before opening a bank account, it is best to research the most popular banks in the area where you are going to live. You can also ask for recommendations from those you trust and search for reviews online.
Make sure you’re choosing a bank that offers you all the features you want. Ask about fees, minimum balance required and your ATM network.
Also, learn about your foreign transaction fees for debit card purchases abroad, interest rates for your savings account, and your online banking options.
How do you know a bank is safe?
Depending on where you have lived before, you may be intimidated by banks or feel untrustworthy. However, in general, banks in the United States, the United Kingdom, and Canada are very safe.
Financial regulations and governing bodies such as the FDIC in the United States, the CDIC in Canada, and the FSCS in the United Kingdom are designed to protect your money. For example, using an FDIC-insured bank in the United States means your deposits are insured up to $250,000. In the event that something happens to the bank, your money will still be there.
In the United States, it is very rare for a bank to not have FDIC insurance, although there are exceptions. The Bank of North Dakota, for example, is backed by the state of North Dakota and not the FDIC.
How to calculate your net salary?
When you start receiving your salary from your employer, you may notice that it is less than your salary. This is because your salary number is based on a gross amount, not the net amount after all taxes and deductions have been taken out.
It is important to calculate your net salary so that you can calculate how much money you have to work with each month. This amount should help you pay for necessities, other non-essential items, and even some savings.
To understand what your take-home pay is, you can check your pay stub or ask your employer – they should provide you with a breakdown. In general, federal, state and local taxes will be withdrawn, in addition to Social Security and Medicare taxes.