Moving to a new country is exciting in more ways than one. The move also comes with many challenges, one of them being managing money in a new currency. If you have questions about this, you've come to the right place.
A few handy tips on managing your money once you move to the U.S.
The cost of living in the U.S. ranges from person to person. It depends on their standard of living, state or city of residence, responsibilities or financial liabilities, saving habits, etc. You can stay on top of your expenses by following these money management practices:
Assess your current financial situation
Begin your financial management journey by taking stock of your current financial position. Measure existing streams of income and recurring expenses such as rent, utilities, transportation, and debt. This exercise will give you a clear picture of where you are with your finances.
Once you have taken stock of the present, start planning for a future. Envision a financial goal and develop a practical roadmap to achieve it. This goal can be a short-term one like treating yourself or your loved one to a fancy dinner or a long-term one like buying a house.
Prepare a personal budget (and stick to it)
This is the most challenging part. For many individuals, budgeting might seem excessive and unnecessary. It's time and energy-consuming, and number crunching might not be your thing.
However, budgeting gives you significant insights into how good (or bad) you are with money, and you can use it as the north star for all your money decisions.
Use an Expense Tracking App
Modern-day budgeting is more exciting than accounting books and ledgers. Expense tracking apps allow you to log all transactions on the go. These applications come with attractive functionalities such as spend visualizer, personalized financial guidance, digital assistants, payment reminders, and more. Many of these apps are available for free, while some come at a small price. Even if you plan to stick to a basic Excel sheet to keep a tab of your money, you will still see great results.
Prioritize savings and investments
Setting aside a fixed percentage of your salary as soon as you receive it can be a great way to build financial discipline. You can even set up automatic deductions so that money goes from the checking account to the savings account. This helps reduce your disposable income, which then restricts your non-essential purchases.
You can consider investing in stocks and shares to rake in higher gains if you are more ambitious. But do keep your risk appetite and financial liabilities in mind while doing so. Alternatively, if you are saving up to build a retirement corpus, you can park your money in IRA plans that will also grant tax breaks.
Limit and manage purchases
Let's face the truth - we all love the instant gratification that comes with any purchase. But is that rush worth losing your financial stability? Probably not.
An excellent way to curb impulse buying is to prolong the purchase decision to the point until it becomes evident that the purchase is a "need" and not a "want." Resist the urge to swipe that credit card and deal in cash, as that means using the money you already have and not adding to your debt. Even in the case of big purchases, save up and pay cash upfront instead of paying interest on installments. These seemingly minor changes can snowball into significant savings over time that will improve your financial position.
Rome wasn't built in a day, and nor were your spending habits. It may take some time for you to get used to budgeting and managing your money, and you can use the above pointers are a start point.
Hope we were successful in demystifying personal finances! Go on and get started - you've got this!