When you’re building a life in a new country, few things are as important as creating a solid financial footing for yourself or your family.
We asked financial advisor Anna Sergunina to draw on her experience as an immigrant to offer some personal finance tips for newcomers, including advice about saving and budgeting.
What kind of mindset can lead to financial success?
My family immigrated to the United States in the mid-1990s from the former Soviet Union. I was 15. Of course, I had no idea what budgeting was. All I knew was that I wanted to work and make my own money!
Here is what I wish someone told me when I was 15:
Learn: There is plenty of opportunity to earn money in this country, so a key first step is learning the ropes of how the personal finance system works here and how successful people do it. Newly arrived immigrants should read books and take courses on basic personal finance if possible. And never stop learning!
Save: Savings is the key to financial stability. Americans love to borrow money, but immigrants (along with everyone else) should be careful with accumulating debt. Saving should be your No. 1 priority.
I understand what it’s like to be just starting out as an immigrant and getting a little bit of money — you want to enjoy it. That time will come! But in the early years, treat the weekly or monthly act of putting money aside just like any other bill you have to pay — as a must. Emergencies will come up, and having a cushion will make your life much easier.
» MORE: Tips on saving money
What should immigrants keep in mind when setting up a budget?
Understand where you spend your money. I am not talking about tracking every penny you spend, but having a good idea of your monthly expenses in two major areas:
Fixed expenses: This includes things like rent or mortgage payments, utilities, [your] cell phone bill, monthly savings, insurance, auto loan[s] — any money that you must allocate to specific purposes month after month or quarter, no matter what.
Variable expenses: This includes groceries, eating out, clothing, shoes, entertainment — discretionary expenses that you have a lot more flexibility to adjust if funds are getting low at the end of the month. You don’t have to go out every weekend!
Once you get a handle on these two areas of your spending, then you can start building a system for yourself where the majority of your energy is spent on managing variable expenses.
What should immigrants know about transferring money to family overseas?
Be aware of fees (the cost of transferring funds to a foreign country). Look for a reputable provider and evaluate them based on what services they offer. How fast do you want funds to be delivered? Are you paying with cash, credit card or bank account? How secure is the transfer — can you rely 100% on your funds being delivered?
Also keep the exchange rate in mind. Do the math and determine if it is better for your relatives to receive transferred funds in dollars or in the local currency.
Anna Sergunina is a financial advisor based in Burlingame, California. You can get more information about her online personal finance course, the Money Flow System.