As a daughter of immigrants, I feel so lucky to get to live in America. But another implication of the American Dream is that it is exactly that – a dream; meaning, there’s some work to do before that dream can become a reality. And like most kinds of work, money is involved. But, I am living proof that anyone can come to the United States, learn the financial game, and dare I say, win. Today, I’m going to show you what I wish someone had told my family when we moved to America. So if you’re new to the US, here are five things you need to know about the finances of the American dream:
Your Credit Score is your Financial Report Card
If you’re American, your credit score is also American. Even if you have a perfect 850 credit score, your stellar score won’t mean much to the rest of the world. In fact, some countries look at completely different metrics to determine your financial dependability. In the U.S., employment and salary has nothing to do with your credit score. The overall system of evaluating credit is much more formal. In the U.S., your credit score is mostly determined on whether you pay your bills on time and how much debt you have. The biggest mistake you can make is owing too much – either through putting too many expenses on a credit card, or taking out big loans you don’t diligently pay down.
The US calendar may look a little different
The U.S. is the only country in the world that writes the date starting with the day, then the month, then the year. Let’s say you’re living in Colombia, you’d date that birthday card 7-3-2022. But, if you sent me a birthday card dated 7-3-2022, I would get it, well, late. You can see how this can get confusing and potentially even problematic. Do a little practice writing dates in month, day, year format. Start by writing down all the upcoming important dates in your life and keeping that next to your computer. This will help you get in the swing of writing dates the Americanized way.
You should keep your money in the bank
In some countries, there’s a strong culture of mistrusting the banking system. Even though American banks do have their fair share of issues (looking at you, Wells Fargo), in the US, financial institutions are the best places to keep the majority of your money. Sure, keep a little cash stash at home, but only a couple hundred bucks. I do not want to see you keeping any significant amount of your net worth in a safe, or a piggy bank, or God forbid, under a mattress. Not only is your money safer in banks, it also has more opportunity to collect interest.
It’s expected that you tip 20%
Compared to other countries, the US has some of the priciest norms around tipping workers in service industries, like restaurant work, transportation, hospitality or manual labor. In other countries, service industries aren’t designed for workers’ compensation to depend on tips. So if you grew up in another part of the world, you may assume that when you’re out to brunch, your waiter is making a good hourly wage, so, you rationalize that you can leave just a dollar or two when you’re leaving the table. Wrong. In America, if you leave less than a 20% tip, it indicates to the worker that you consider their service less-than satisfactory.
With a price tag, what you see might not be what you get
If you’re from across the pond in the U.K., you’re used to seeing price tags that include sales taxes. In the U.S., not so much. In the US, sales tax varies depending on what you’re buying and which state you’re in. So, it’s easy to consider sales tax “the fine print” of a purchase and do what you do with all fine print, likely ignore it. If you’re not American, it may feel like a major plot-twist if you have exactly $25 dollars to spend on a shirt with a $25 price tag on it and you actually don’t have enough money to make the purchase.
One of the best things to do if you’ve recently moved to the United States is just to get to know our money the old-fashioned way, by holding it in your hand. When you have a little extra time, go to the bank and get some dollar bills – ones, fives, tens, twenties. In the U.S., unlike many other countries, paper bills are all the same size and color. If the U.S. dollar is new to you, it’s a good idea to get familiar with it before you get overwhelmed at a cash register, fumbling through your cash trying to find the right change at check out.
A version of this article was originally published on Forbes.