Ever heard the saying “Money makes the world go around” – well in the US, that might just be true. America is a land of opportunity but it is also a land of great difference between the rich and the poor. Most new immigrants realize that the opportunity will take a while to become worthwhile and historically it has been true that first generation immigrants tend to work hard but remain poor. Their children though often have better opportunity and that is why many of us are motivated to move here – for our children.
However, no matter how much or how little money you have, some sensible money management habits will help you make sure you don’t get overwhelmed and in trouble through money worries. So – I wanted to explain some pointers about how to avoid getting into debt and also how to manage your credit profile (which is important whether you need to borrow or not.
First lets address some advice to those that may be coming on a limited/small budget.
- First of all, try and have a realistic plan about how you will support yourself here. Find out the cost of living in the area you are moving to and work out how long you can support yourself without a job. It might take several weeks before you get your SSN and then get a job here. So, especially if you don’t have contacts here, you need some money – plenty of it!
- Most low income jobs are paid weekly or bi-weekly (fortnightly). So, once you get a job you have to support yourself until payday also.
- Never ever, not ever, (and even not then) take a “Pay Day loan”. There are companies that will loan you small amounts of money on the understanding you will repay it from your next pay check. The interest rates, fees and so on are ridiculous, their plan is to bleed you dry. So – don’t use those companies. As new immigrants you are easy prey for those scumbags.
- Be careful with credit in general. Once you have a credit history you will be offered credit everywhere. Credit is fine for certain things (mortgage for a house being the best example), but otherwise always consider whether you should just wait to buy whatever it is. Just save up your money and if you can’t afford to buy something now, wait until you can afford it. Many Americans are drowning in credit – don’t buy in to that part of the American Deam!
- Pay all your bills on time every time. As soon as you start not paying bills, you are hit with additional charges so it starts a cycle of worries. When you get a bill, pay it the same day. You have spent that money already – so don’t “pay bills at the end of the month” – you will just be kidding yourself that you have more available cash than you really do.
- Live simply and within YOUR budget. There is no need to spend money to have fun here. It is a great country – there are things that are free or cost peanuts. If you have a family, plan your weekends to take advantage of some of the wonderful things like free family concerts, public parks and so on. I’m taking my wife and kid to a free outdoor movie night tonight. If you are religious, churches are great at organizing those sort of events.
- Build up an amount of money as a backup plan. You should aim to have a minimum of 2 months living expenses put aside – so treat that as a priority above splashing out on fancy meals, sending money home or even giving at your Church. Once YOU are comfortable you can help others.
- Don’t try and keep up with others you see spending money like water. They may be very fortunate or they may simply be spending their way into debt. So – don’t be embarrassed to drive an older car you own rather than buying new one owned by the bank.If you do these things you will get ahead of the game.
Once you have money you’ll be amazed how money is no longer an issue/problem and also you will learn that money makes money. America is a place where you can change your circumstances for the better or worse – a sensible approach to money matters will help ensure you avoid the worse.
Finally, just remember – it isn’t important to have a lot of money – happiness is found by making sure you have enough money – and n America – you get to decide how much is enough.