By: Gerelyn Terzo of Sharemoney
With inflation running amuck in the global economy, it’s difficult for many people to save money these days. However, this can be an incredibly daunting challenge for immigrants in the United States looking to save money for themselves or send cash remittances back to their families abroad. Prices on essential items such as food and fuel have been soaring, leaving Americans, including new residents, to stretch their dollars further.
For U.S. migrants, high inflation in the economy cuts both ways, both locally and abroad. That’s because it is common for U.S. migrants to send cash back home to their families to help with everyday expenses. This is why many immigrants leave their home country in the first place.
It can be challenging for immigrants to save money, considering that whatever they have left over is often used to support their families abroad. And consumer prices may inflict even more damage, with the IMF predicting global inflation will peak at 9.5% in 2022 while climbing even higher in developing nations.
Fortunately, the United States has no shortage of opportunities to help immigrants save and earn money, whether to cover a short-term expense or to hold onto it for the long term. Below we will explore ways for immigrants to save money as new residents of the United States. It comes down to two strategies: cutting back on spending plus working harder and smarter.
One way for immigrants to begin saving money is to tweak their budgets. However, before you can do this effectively, be sure and examine your monthly expenses, such as groceries, rent, electricity, transportation, etc. These costs are fixed and generally won’t change much monthly. But they should serve as a basis to allow you to make other changes that can lead to savings.
Often immigrants are no strangers to sacrifice because that is usually what it takes to support their families back home. Saving more money might require additional sacrifices, starting with diet. This could mean skipping fruits at the grocery store or replacing pricey steak with chicken or whatever is on sale, at least until inflation eases in the economy and prices come down.
Some grocery stores offer digital coupons on their mobile apps, which is an easy way to save money at the cash register. Consider shopping at second-hand stores such as Goodwill, which are prevalent across U.S. states. You can turn to them for items like clothing or household goods. Many times, these products are of good quality and were donated and can be purchased at a discount by others.
No doubt immigrants are some of the hardest-working people on the planet. However, with so much at stake, you might need to kick things up a notch to save money in the United States. Depending on your situation and talents, this could mean different things to different people.
Sometimes you must be willing to learn a new trade to generate an additional income stream. For example, you could pick up a skill such as painting and market your skills to your local neighborhood. Be willing to work outside the scope of the typical business day, such as evenings or weekends, so that you can continue working your day job in the meantime.
If you are a professional driver or enjoy the open road, consider picking up some Uber or Lyft shifts in the evenings or on weekends for extra cash. Or see if you can moonlight as a chauffeur. With gas prices as high as they are, make sure it is a profitable endeavor.
Change Service Providers
In the U.S., there’s no shortage of financial service providers. However, online investment and money apps are more user-friendly than traditional banks. Immigrants sometimes come from countries where their local banks cannot be trusted. This is not the case in the United States, but that doesn’t mean there aren’t any traps to look out for, like fees.
Many fintech offers features such as zero overdraft fees, no account minimums, and early access to direct deposit. By switching from a bank to one of the many financial technology (fintech) apps out there, you could begin to achieve savings right away.
For example, while rising interest rates are making credit more expensive in the United States, you can also use this to your advantage. Some companies are offering higher-yielding savings accounts in an attempt to attract customers. While the average annual percentage yield (APY) is a mere 0.17%, some platforms pay more than 3% on interest. You can explore some high-yield savings account platforms here.
There are also financial apps that can help immigrants save money in the United States through incentives or education. Some of these companies focus on the immigrant community in particular, which helps to remove barriers such as language that could otherwise interfere with financial progress. A few of these platforms include:
Finhabits: Start investing for just $5 each week.
MYRA Wealth: This platform was founded by Sahil Vakil, a first-generation immigrant, and therefore is designed to help other immigrants with their financial needs.
Nova Credit: This platform seeks to help immigrants obtain credit in the United States, which could otherwise be tricky to get.
In other cases, it might be best to cancel some services altogether, such as cable. Instead, go with a cheaper content streaming app, but keep these subscriptions to a minimum, so you don’t wind up dedicating too much of your budget to those.
Lastly, as an immigrant, it is more important than ever to have an emergency fund. Ideally, the funds in this account should be enough to cover your expenses for three-to-six months, even if it doesn’t get there overnight. As you continue socking away money, the fund will grow and give you a greater sense of security as you adjust to becoming a new resident of the United States. Never stop learning about personal finance, and you will increase your chances of increasing your savings along the way.