Money Rehab with Nicole Lapin - Encore: "5 Must-Follow Tips for New Americans"

Episode Date: August 7, 2022

Originally aired Aug 2, 2021. Just like there is no global currency, there is no global financial system. If you’re new to the US, the rules of the financial game are going to be different… and set-up for home-court advantage. Follow Nicole’s five tips to close on the American Dream once and for all.

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player game stop and should i have a 401k because you don't do it no i know you think the whole world revolves around you and your money well it doesn't charge for wasting our time i will take a check you recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin.

As a daughter of immigrants, I feel so lucky to live in America. If you were born here, maybe you take it for granted. But just think about the whole concept of the American dream. And how many other countries have a whole brand around the promise of their country? I mean, have you ever heard of the French dream? It's not a thing unless you count daydreaming about pastries. If so, guilty. But another implication of the American dream is that it's 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. This brings us to today's question from an anonymous listener.

Hey, Nicole, I am going to stay anonymous just to protect the identity of the person that I'm talking about. But I'm a tutor, an English language tutor for immigrants and refugees. And I have this guy that I work with and he's from Japan. He was telling me that he's having a really hard time getting an apartment. And it's because the system of credit scores and credit reports and credit cards in Japan is totally different than it is in the U.S. and there he was telling me that there kind of is no equivalent credit score in Japan and so when he came to the U.S. he was just you know using credit cards all willy-nilly all over the place and he totally destroyed his credit without even knowing

he was doing it. And as a result, he is having a really hard time finding an apartment because he has a really bad credit score. And I work with a couple of people who are in similar spots where they're coming to the US and they're not really sure what they should be doing with their money and just kind of want to do everything the right way. So I was wondering what tips you have for people that might be new to the US and new to the US's financial system. Thanks.

This is such an important point. Just like there is no global currency, there is no global financial system. Depending on where you are in the world, you're going to be using a local currency and the rules of the financial game are going to be set up for home court advantage. But I'm living proof that anyone can come to the United States and learn the financial game and dare I say, win it. Today, I'm going to show you

what I wish someone had told my family when we moved to America. So without further ado, if you're new to the United States, here are five things you need to know about the finances of the American dream. Number one, your credit score is your financial report card. Yes, as today's listener points out, there is no standardized global metric for individual financial health. In other words, if you're American, your credit score is also American. If you have a perfect 850 credit score, your stellar score is not going to mean that much in another country. In fact, some countries look at completely different metrics to determine your financial dependability. Take today's example of Japan. In Japan, there is no formal system for assigning a score to your

credit worthiness. According to Matthew Haig, a financial planner with expertise on the Japanese financial world, whether or not you get a loan in Japan will likely depend on your job, specifically how long you've been with your company and how much you're making there. In the U.S., employment and salary have nothing to do with your credit score. And overall, the system of evaluating credit is much more formal. Also in the U.S., your credit score is mostly determined by whether you pay your bills on time and how much debt you have. So if you're new to the U.S. and you're trying to build credit, the biggest mistake you can make is owing too much money, either through putting too many expenses on a credit card or taking out

biggie loans. If you need some more tips for acing your credit score, check out Money Rehab episode 23, aptly named Don't Get Screwed by Bad Credit. Number two, the U.S. calendar may look a little different. In America, we write the dates starting with the month, of course, then day, then year. If you're not born in the U.S., this probably drives you crazy. It is my understanding that we are the only country in the world that writes the date this way. In other countries, people write the date starting with the day, then the month, of course, then the year. So let's take my birthday, for example. I'm sure I don't have to remind you, but it's March 7th. In the United States, when you write me my next birthday card, yes, I did say when, you date it 3-7-2022. 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 instead of 3-7-2022, as an American, I'd assume you thought my birthday was July 3rd. I guess I'd say better late than never, but that's pretty late. Anyway, you see how this can get confusing and potentially even problematic if you're filling in the date on an important document like a check, a lease, or an employment contract. I'd recommend doing 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 into the swing of writing dates the Americanized way, but you're also more likely to remember important dates if you have them

written down. So after a little practice, you'll have this date convention under your belt and you won't forget your next anniversary with your partner. Win-win. Hold on to your wallets, boys and girls. Money Rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime,

you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. That's Chime.com slash MNN. Chime. enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Now for some more money rehab. Number three, you should keep your money in the bank. This one really hits home for me because I lived

it. Growing up, my parents told me that instead of keeping my money in the bank, I should keep it essentially stashed under my mattress. In some countries, there is a strong culture of mistrusting the banking system. Take Myanmar, for example. In Myanmar, there's an evolving banking crisis following several destabilizing events in the past year, like a military coup and then the pandemic. Currently, there are caps on withdrawals citizens can make, which has prevented many people from accessing their own money. I was just reading about a man in Myanmar who keeps his entire life savings in between pages of his diary that he takes with him everywhere he goes. Even

though American banks do have their fair share of issues, I'm looking at you, Wells Fargo. In the U.S., financial institutions are the best places to keep the majority of your money. Sure, keep a little cash stash at home, but maybe only a couple hundred bucks. I do not want to see you keeping any significant amount of your net worth in a safe, in between a diary, in a piggy bank, or God forbid, under your mattress. Not to say that my pot penny isn't a ferocious beast, but the big Ocean's 11 bank vaults probably do a little bit of a better job protecting my money than my nine pound toy poodle. But not only is your money safer in banks, it also has more opportunity. If you keep your money in the bank, you have the opportunity to collect interest.

If you keep your money under a mattress, you only have the opportunity to collect dust. Number four, it's expected that you tip 20%. Compared to other countries, the U.S. 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 or, in other words, their customers' whims. For example, in many countries, you can work in a restaurant and, breaking news, actually make a living wage without tips. So if you grew up in another part of the world, you may assume that when you go out to brunch, your waiter is making a very good hourly wage. So you rationalize that you can just leave a dollar or two when you are leaving the table.

So you rationalize that you can just leave a dollar or two when you are leaving the table. Wrong go. If you leave less than a 20% tip in the U.S., it indicates to the worker that you consider their service less than satisfactory. So you shouldn't think of leaving a tip as just giving someone bonus money. You should think of skimping on the tip as giving someone a pay cut. Number five. With a price tag, what you see might not be what you get. If you're from across the pond in the UK, you're used to seeing price tags that include sales taxes. In the US, not so much. In the US, sales tax varies depending on what you're

buying and what state you're in. So it's easy to consider sales tax the fine print of a purchase and you do what you do with all fine print. You ignore it. I think for most of us Americans, when we're shopping and looking at a price tag, we'll say to ourselves, oh, a $25 shirt. So I'll pay a little more than $25 at checkout. Cool. Sounds good. Many other countries put the total price on the price tag, the price of the goods plus any tax costs all right there. So if you're not used to the American system and you're out shopping, you'll say, oh shit, a $25 shirt. So I'll pay $25 at checkout. Cool. Sounds good. And you'll be shocked when the cashier is asking you to fork over more at checkout. If you're not American, it may feel like a major

plot twist if you have exactly $25 to spend on a shirt with an exact $25 price tag on it, and you don't exactly have enough money to make the purchase at checkout. don't exactly have enough money to make the purchase at checkout. For today's tip, you can take straight to the U.S. bank. When you have a little extra time, go to a U.S. bank and get some dollar bills. I'd love to see you get some ones and fives and tens and 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 pretty good to get familiar with it before you get overwhelmed at the cash register, fumbling through your cash, trying to find the right change at checkout. Money Rehab is a production of iHeartMedia.

I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikadur and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.