The Inner City: a place where community color came from the graffiti-colored cement and sidewalks scattered with narcotics paraphernalia. Unfortunately, this was my new residenceâ€”a calm summer of research turned public health demonstration left me alone in the slums of Queens, armed with a clipboard and a decaying sense of self-confidence. Each day, I pursued responses to my script of questions, walking from one under-served individual to the next: â€śWhat would you pay for this medication? If I was to sell you some new shoes, how much would you be willing to spend?â€ť
The results were appalling, to say the least; based on a grand total of 139 responses, I effectively concluded that more than half of the members of Queens would spend more on a new pair of Jordans than a fundamental prescription. Thatâ€™s when I made a life changing realization: these individuals, largely immigrants, have no background of budgeting. Even if theyâ€™re able to hold a job and earn some supplemental income, they have no means of managing it.
Unfortunately, Queens doesnâ€™t stand alone in regard to its financially illiterate populace; over 70% of immigrants lack basic knowledge of personal finance. After all, immigrants are routinely faced with the obstacle of not only adjusting to a countryâ€™s cultural and social norms, but also its disparate financial system.
Donâ€™t worry, thereâ€™s hope! With these quick 3 financial moves, immigrants can place themselves in a commendable fiscal position to obtain long-term
1.) Open a Bank Account
Remember, opening a bank account may be challenging for undocumented immigrants, as they need an valid ID. However, if you live in NYC, there is a solution even for the undocumented folks. Check out the NYC ID program and its benefits here: https://www1.nyc.gov/site/idnyc/benefits/benefits.page
Though seemingly common sense, over 40% of immigrants, per the Pew Research Center, have conceded to a sense of fear when opening a bank account due to the corrupt image of such institutions in their native land. However, rest assured here: in the U.S., immigrants can feel pretty safe about money they have in a savings account if the bank is â€śFDICâ€ť insuredâ€”through the Federal Deposit Insurance Corporation (FDIC). In other words, this single certification means that in the event of an economic downfall or some other tragedy, the government guarantees each individualâ€™s money back (for up to $250,000 of money that is put into a single account with an FDIC-insured bank). So, new immigrants: donâ€™t keep too much cash on hand, and trust a bank to secure your savings!
2.) Determine Fixed Monthly Expenses
Fixed monthly expenses are characterized as any costs that an individual must pay at the end of a monthâ€”regardless of fluctuations in income. For example, fixed monthly costs are inclusive of rent, groceries for food, utility bills for electricity and any other baseline survival need.
Quantifying these expenses is extremely important for two main reasons:
- First, if youâ€™re cognizant of your monthly expenses, youâ€™ll know exactly how much money you need to find a way to earn each month in order to survive. Of course, with immigrants working thousands of overtime hours across the U.S., such knowledge is critical in assisting them to find a balance between tough labor and financial stability.
- Second, knowing your fixed monthly expenses is crucial because it helps you manage your extra incomeâ€”given each monthâ€™s varying financials. While you can put the additional money towards your goals or a mere savings account, knowing the amount beforehand ensures that extra money serves you, instead of just getting spent with no purpose.
3.) Create an Emergency Fund
Also known as a rainy day fund, supplemental money stored by immigrants when they have extra income on hand can be instrumental to guide their lives in tough fiscal times. Personal finance experts generally recommend having an emergency fund amount equal to about six months of expenses. So, for instance, if an immigrant and his/her family need $2,500 a month to survive, their goal should be to have $15,000 stashed away in a bank account for emergencies.
Encompassing recovery in their very existence, emergency funds allow immigrants who god-forbid lose their job sustain themselves for an extra six months while searching for a new source of employment.
Yes, putting away hard-earned money certainly isnâ€™t fun. But, itâ€™s a mere stepping stone to the eventual success immigrants will find through following these basic money management tips!
BY: Aditya Desai, MRC Volunteer, February 2020
Migration Resource Center provides affordable immigration legal services and education.
Call us: 646-609-8805
Visit our Website: https://www.migrationusa.org/contact/
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