4 Money Tips for New Americans

As a daughter of immigrants, I feel so lucky that I get to get to live in the United States and pursue the American Dream. But an implication of the American Dream is that it is exactly that—a dream; meaning, there’s some work to do before that dream can become a reality. And like most kinds of work, money is involved.

But I am living proof that anyone can come to the United States, learn the financial game, and dare I say, win. Today, I’m going to share the financial advice I wish someone had told my family when they immigrated to America. If you’re new to the U.S., here are four things you need to know about the finances of the American Dream:

1: Your credit score is your financial report card.

In America, your credit score will play a huge role in your financial life. But this isn’t the case in every corner of the world. For example, in Japan, there is no formal system for assigning a “score” to your credit worthiness. According to Matthew Hague (a financial planner with expertise on the Japanese financial system), whether or not you get a loan in Japan will likely depend on your job; specifically, how long you’ve been with your company and how much you’re making there.

In the U.S., employment and salary have nothing to do with your credit score, and overall, the system of evaluating credit is much more formal. Your credit score is mostly determined on whether you pay your bills on time and how much debt you have. So if you’re new to the U.S. and trying to build credit, the biggest mistake you can make is owing too much— either through putting too many expenses on a credit card, or taking out big loans.

2: You should keep your money in the bank.

This one hits home for me because I lived it. Growing up, my parents told me that instead of keeping my money in a bank, I should keep all my cash in a safe at home.

In the U.S., financial institutions are the best places to keep the majority of your money. Sure, keep a little cash stash at home, but only a couple hundred bucks. I do not want to see you keeping any significant amount of your net worth in a safe, a piggy bank, or for the love of god, under a mattress.

Not only is your money more safe in the bank, it also has more opportunity. If you keep your money in the bank, you have the opportunity to collect interest; if you keep your money under a mattress, you only have an opportunity to collect dust.

3. The calendar may look a little different.

In ‘merica, we write the date starting with the month, then the day, then the year. If you’re not born in the U.S., this probably drives you crazy. It’s my understanding that we are the only country in the world that writes the date in this way.

Let’s take my birthday for example. I’m sure I don’t have to remind you, but it’s March 7th. In the U.S., when you write me my next birthday card (yes, when), you’d date it 3-7-2022. But if you were living in Colombia, you’d date that birthday card 7-3-2022.

If you sent me a birthday card dated 7-3-2022, as an American, I’d assume that you thought my birthday was July 3rd. I’d say better late than never, but…

Anyway, you can see how this can get confusing, and potentially even problematic if you’re filling in the date on an important document— like a check, a lease, or an employment contract.

4: With a price tag, what you see might not be what you get.

If you’re from across the pond in the U.K., you’re used to seeing price tags that include sales taxes. In the U.S., not so much.

In the U.S., sales tax varies depending on what you’re buying and which state you’re in. So, it’s easy to consider sales tax “the fine print” of a purchase and do what you do with all fine print: ignore it.

I think for most of us Americans, when we’re shopping and looking at a price tag, we’ll say to ourselves: "Oh! A $25 shirt… so I’ll pay a little more than $25 at check out. Cool, sounds good."

Many other countries put the total price on a price tag— the price of goods, plus any additional tax costs. So if you’re not used to the American system, when you’re out shopping you’ll say: "Oh! A $25 shirt… so I’ll pay $25 at check out. Cool, sounds good.” and you'll be shocked when the cashier then asks you to fork over more at check out. If you’re not American, it may feel like a major plot-twist if you have exactly $25 dollars to spend on a shirt with a $25 price tag on it, and you actually don’t have enough money to make the purchase.

xo,