On July 4 each year in naturalization ceremonies across the United States, tens of thousands of foreign-born individuals will pledge their allegiance to the flag for the first time as Americans. It’s a proud and patriotic moment for them and for our country.
But we also know that becoming an involved U.S. citizen takes more than passing a civics test or applying for a dark blue passport. Taking full advantage of the rights and privileges Americans may enjoy — including our unique and often complicated financial systems — requires becoming financially naturalized as well.
It’s important for all Americans to obtain credit in their name, establish a credit history, and build their savings. At the same time, immigrants face the unique challenge of straddling their old and new ways of life. Many new Americans are still supporting family and assets in their home countries. And that can make getting financial footing in this country a slower and more difficult process.
But if there’s one thing that new Americans have in abundance, it’s a vision for a better future. They have personal goals — many of them financial — that have been powerful motivators in their quest for citizenship. This is a necessary first step in the financial planning process.
What’s needed next are some tips to help them move closer to their vision.
Get established with a bank or credit union. Having a local, regulated institution hold your money has numerous advantages. You’ll have records and a history of the flow of your money, which in turn leads to better financial management. You’ll be able to safely save and build up a reserve. You’ll have access to ready liquidity through a bankcard or checks.
Get educated about the costs of education. Many new Americans come with the dream of their children getting a degree from a U.S. college or university. The benefits can be great -- but often so are the costs. Without careful planning and savings, an American education can either become unaffordable, or else lost in a mountain of debt. New Americans should begin to save regularly for higher education, using tax-advantaged accounts such as 529 plans or custodial accounts. They should become familiar with the steps to qualify for federal aid, and learn as much as they can about scholarships, grants and work-study programs that can be used to finance their children’s education.
Take advantage of workplace benefits. Often in the United States, the employer, rather than the government, provides key benefits to workers such as health care coverage, access to tax-advantaged retirement plans, and disability income coverage. Unfortunately, this means that the level and type of employee benefits provided can vary widely from firm to firm, and may come at a cost to the employee. But it also means that your choice of employer—and understanding of the benefits provided — can make a big difference in your financial stability and long-term security.
Invest in yourself. America has always been the land of opportunity for those who work hard and are willing to invest in the future. This includes investing in yourself – in training, education and experience. As an American, you are eligible for low-cost loans to finance a college education. And as a taxpayer, you can get credits for those education costs.
Welcome to your future as American citizens! We’re glad you’re here.