4 Financial Challenges Unique to Immigrant Families


Learn about the most common financial challenges facing immigrant families and possible solutions

Apr 16, 2020


Families all over the world face financial challenges. It’s the nature of having more people dependent on earnings than people who are earning money.

Those problems are more difficult when families move to a new country and are faced with finding housing, jobs, banks, and additional costs. Here are four of the most common financial challenges facing immigrant families.

1. Building Credit In a New Country

3D illustration of a conceptual gauge with needle pointing to excellent.

Although you can use a credit card issued in your home country all around the globe, your credit rating is not transferred across the world. A credit score from Canada helps little with earning credit in the USA, let alone a credit score earned in far-flung regions.

One solution to this challenge is immigrants can use credit issued in other countries. For example, you can tap into a line of credit from your home nation — but this is an additional expense. Plus, it doesn’t help with local credit checks for things like apartment applications, car loans, or even getting a cell phone. Immigrants must start building credit without the safety net and leverage an adult credit rating provides.

What TO Do About It

Use resources like this to learn how to build a U.S. credit score. Meanwhile, leverage credit available to you in your home country to keep your finances in order.

2. Language-Related Barriers and Expenses

An immigrant takes an online English language course

If you’ve never spent an extended amount of time in a region where you don’t speak the local language, you have no idea how much of a hardship it can be. Beyond the simple fatigue and hassle of the situation, it can also make many things more expensive. For example:

  • Hiring a translator or interpreter for simple government or business transactions
  • Failing to understand the costs (especially hidden costs) of a transaction
  • Greater dependency on a single source of information (such as a local friend who speaks the language) for financial decisions
  • More vulnerability to scams and bad actors

A language barrier also makes it more difficult to get good deals or negotiate prices.

What to Do About It

The bad news here is learning the language is the only long-term, reliable solution to this problem. Learning English in the United States is a little easier because you’ll hear people speaking English daily. Be sure to access local and regional translation services.

3. Retraining and Beginning Again

An immigrant doctor holds a clipboard.

Although some immigrants arrive in the United States on job visas that specifically include their experience and training overseas, many do not. A surprising number of PhDs and even qualified medical doctors come to America and work as janitors, store clerks, and receptionists.

Sometimes this is the result of racism and xenophobia — highly qualified candidates get repeatedly passed over for less qualified applicants who speak the language better and hail from locales closer by.

More often, though, it’s a matter of certification and licensure. Like a credit rating, the professional qualifications to work as a doctor or lawyer, for example, are regional or national. They must be applied anew and often require high fees and even retraining. In many cases, that includes a licensing exam taken in English.

What to Do About It

There is no easy solution to this problem. If you are planning to immigrate, begin applying to work in the United States before you move, setting yourself up for the best chances of success upon arrival.

4. Banking and Payment Problems

Immigrant woman deposits cash at a bank.

A substantial number of immigrant families don’t use banks. Rather, they exist solely within a cash economy. Households speaking only a foreign language are five times less likely to use a bank.

That makes it expensive — in terms of time and money — to make most payments in modern society. Take, for example, a simple utility bill. Where a native-born resident can make an electronic payment from their checking account (probably automatically), an immigrant family with no bank would need to either make a cash payment in person or purchase a money order. Multiply this by the dozens of similar transactions you make every day.

Also, staying out of the banking system further exacerbates the credit problem mentioned above. It slows the accumulation of credit, making loans more difficult to attain and more expensive to carry.

What to Do About It

This is the simplest item on this list to fix: set up a bank account as soon as possible upon arrival. If you have time before leaving your home country, establish an account with an international bank such as HSBC or DKB. Once you arrive in the United States, use that existing relationship to create a U.S. account.

Final Thought

These financial hardships come on top of other challenges to the prosperity and happiness of immigrants and their families. There is no simple and easy solution to any of these problems, but they’re not insurmountable. The best solution for all of them is to know they exist, develop a plan as far in advance as possible, and execute that plan effectively upon arriving in the United States.

Joseph Jacobs is a freelance writer in Texas who writes about finance and other subjects.


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