Saving money in your first year in the US: A Colombian newcomer's guide

Your first year in the U.S. is full of firsts: your first apartment, your first paycheck in dollars, maybe the first time anyone has asked about your credit score. The bills tend to show up fast too, and sometimes they arrive before that first paycheck does.

Year one is also when your money habits take shape. The decisions you make early on about rent, banking and credit can make the following years a lot easier, or a lot harder.

Below you’ll find practical steps to keep more of every dollar you earn, from your first budget to your first credit card. If you’re still planning the move, you can start with our financial checklist for moving to the US from Colombia.

Saving money in the US starts with a dollar budget

One habit trips up a lot of newcomers: converting every price back into your home currency. A $6 coffee can look enormous once you convert it, and a $1,500 rent looks impossible. The mental math is exhausting, and it doesn’t help you plan, because you earn and spend in dollars now.

Build your budget in dollars from the start. Before your first paycheck, list the costs you already know about:

• Rent and the security deposit

• Utilities, such as electricity, water, gas and internet

• Phone plan

• Transportation, whether that’s a transit pass, gas or car insurance

• Groceries and household basics

• Money you plan to send home each month

• A small amount for savings, even if it’s only $20

A simple split works as a starting point. Many people use the 50/30/20 approach:

• About 50% of your income for needs

• About 30% for wants

• About 20% for savings or paying down debt

In your first year, “wants” may be closer to zero, and that’s fine. The point is knowing where each dollar goes.

Supporting family back home while you get settled? With Ria you can send money to Colombia to a bank account, a mobile wallet or a cash pickup location, online or in our app.

Open a bank account early

Keeping cash at home or paying to cash your checks gets expensive. Check-cashing stores charge a fee every time, and over a year those fees add up. A bank or credit union account gives you a safe place for your money, direct deposit from your employer and a record of your finances that can help later on.

You’ll likely have more choices than you expect. Large national banks, such as Bank of America, Chase, Wells Fargo, Citibank and TD Bank, often accept an ITIN and a foreign passport for basic checking accounts, although policies can vary by branch. Local credit unions and community banks are another low-cost option worth comparing.

No Social Security number yet?

Some banks and credit unions accept an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. The IRS issues ITINs to people who need to file U.S. taxes but aren’t eligible for a Social Security number. You can find out who qualifies and how to apply on the IRS ITIN page. Requirements vary from bank to bank, so call ahead and ask which documents they accept, such as a foreign passport or a consular ID.

Not sure which number applies to you? Our guide to ITIN vs SSN explains the difference and which one you need.

Look for low-fee accounts

Monthly maintenance fees and overdraft fees can quietly drain your balance. Before you sign up, ask about:

• Monthly fees and how to avoid them

• Minimum balance requirements

• Overdraft fees and whether you can turn overdraft off

• ATM fees, including out-of-network ATMs

Bank On certified accounts are designed to be low cost, with no overdraft fees, and many banks and credit unions offer them. Also check that your bank is FDIC insured (or NCUA insured, for credit unions), which protects your deposits up to the legal limit. The FDIC explains how deposit insurance works on its website.

Keep housing costs under control

Rent is usually the biggest expense in your first year, and it’s where many newcomers stretch too far. A few ideas that help:

• Share an apartment or pick a cheaper one. Renting a room or splitting a place with roommates can cut your housing cost a lot while you get established. A studio, an older building or a place without extras like a gym or pool also usually rents for less, and those savings add up every month.

• Look a little farther out. Neighborhoods a few transit stops away from the city center often cost less.

• Read the lease carefully. Check the length of the contract, what the deposit covers and who pays for utilities.

• Ask your community. Facebook groups for people from your home country, churches and community organizations often share room listings and roommate leads. In Miami, for example, you can check groups like “Colombianos en Miami” on Facebook, ask at your parish or reach out to the Colombian American Service Association (CASA), which offers housing and family support services for immigrants.

If you’re heading to South Florida, our guide to moving to Miami as a Colombian immigrant covers neighborhoods and housing in more detail.

Cut everyday costs: Food, phone and transportation

Small daily expenses add up faster than people expect. These are the areas where you can usually save the most without feeling like you’re missing out.

Groceries

Eating out regularly is one of the fastest ways to overspend in the U.S. Cooking at home, even a few more days a week, makes a real difference.

• Shop at international grocery stores for the staples you cook with at home. Prices are often lower and you’ll find the brands you know.

• Compare the unit price on the shelf label, not just the total price.

• Try store brands, which usually cost less than name brands.

• Plan meals for the week and cook in batches. Your lunch for work is already sorted.

• Remember that sales tax isn’t included. In the U.S., the price on the shelf or menu usually doesn’t include tax, so you’ll pay more at the register. Many states don’t tax most basic groceries, but household items, prepared food and restaurant meals usually are taxed, and in a restaurant you’ll typically add a tip too.

Phone plans

Prepaid plans tend to be cheaper than contracts and don’t require a credit check. Instead of paying for an international calling plan, you can call family back home for free with apps like WhatsApp or FaceTime. Use Wi-Fi whenever you can to save data.

Getting around

If your city has decent public transit, a monthly pass often costs much less than owning a car once you count gas, parking and insurance. If you do need a car, get insurance quotes before you buy. Insurance for a driver with no U.S. driving history can cost more than people expect. The price also depends on the car, so compare quotes for a few models before you choose one.

Start building your US credit history

Your credit history from your home country usually doesn’t carry over. In the U.S. you start from zero, and that affects renting an apartment, getting a phone contract, financing a car and sometimes even job applications.

Ways to get started:

• Get a secured credit card. You put down a deposit, and that deposit usually becomes your credit limit. Used carefully, it helps you build a record.

• Pay the full balance every month. Paying on time is one of the biggest factors in your credit score, and carrying a balance means paying interest.

• Keep your usage low. Try to use only a small part of your available limit.

• Check your credit reports. You can get free reports from the three national credit bureaus at AnnualCreditReport.com.

The Consumer Financial Protection Bureau (CFPB) has plain-language guides on credit reports and scores, including how to build credit from scratch. Steer clear of payday loans and offers that promise to “fix” or “build” your credit for a fee. They can cost far more than they’re worth.

Build an emergency fund, even a small one

Unexpected costs happen: a medical bill, a car repair, a gap between jobs. Without savings, a lot of people end up on high-interest credit cards or loans.

You don’t need a big number to start:

• Open a separate savings account so the money isn’t mixed with your spending money.

• Set up an automatic transfer on payday, even if it’s $10 or $20.

• Aim first for one month of basic expenses, then build toward three.

Send money home without overpaying

For many newcomers, sending money to family is part of the monthly budget from the very beginning. A little planning helps your family get more out of every transfer.

• Set a monthly amount. Treat money for home as a fixed line in your budget, like rent, so it doesn’t compete with surprise expenses.

• Look at the full cost. Compare both the transfer fee and the exchange rate. Together they decide how much money actually arrives.

• Choose the right delivery method. Your family might prefer a bank deposit, a mobile wallet or cash pickup, depending on where they live and how they handle money.

• Think about how often you send. Depending on fees, sending once a month instead of several small amounts may leave more money for your family.

With Ria you can send to major banks such as Bancolombia, Davivienda, Banco de Bogotá and BBVA Colombia, or to mobile wallets like Nequi and DaviPlata. To get started, see how to send money to Bancolombia from the U.S. You can also send through Bre-B, Colombia’s instant payment system. Our guide explains how to receive money from the US via Bre-B.

Use free resources in your community

Plenty of useful help in the U.S. is free if you know where to look:

• Public libraries offer free internet, computer use, English classes, job search help and sometimes free financial literacy workshops.

• 211 connects you with local services for housing, food, utilities and more. Call 211 or visit 211.org.

• Your home country’s consulate can help with documents, IDs and information for citizens living abroad. Find your nearest consulate on the Cancillería de Colombia website.

• Community organizations and churches often run free or low-cost English classes, tax help and legal clinics.

Your first year in the U.S. takes a lot of adjusting, and your money habits are part of that. When you’re ready to send support home, we make it easy to send money to Colombia with Ria, online, in the app or at one of our locations.

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