Fairlane moved to California a little less than six years ago. She wants others who immigrate to have an easier time.
Don't wait until you get to $60,000 annual before you start thinking about saving for your future. Remember that time is more expensive that money. Every year you put off saving for your future, you double the amount you need to put away to secure your retirement.
Take this as an example:
If you start saving for retirement when you are 25 years old, you only need to contribute $150/monthly to your 401K or IRA to get $3,000 monthly when you retire at 65
If you start saving for retirement when you are 40 years old, you will need to contribute $2,000/monthly to your 401K or IRA to get $3,000 monthly when you retire at 65.
Waiting until you get to a certain salary is a mistake. Start now.
I personally use these strategies to achieve two objectives:
- Make sure I send money back home consistently
- Make sure that I am covered both for emergencies and also for my future when I retire at 60
#1- Get Side Jobs
I knew that regardless of how good my professional experience is in the Philippines, it really wouldn’t matter here because I am not in a technical field. I had to start from the bottom and that means minimum wage. I started with $10 an hour and that wasn’t going to be enough.
The other thing I had to consider was career path. I knew I just had to get a job fast and I would take the first job that I can get but what are the chances it would put me on track the career I really really want to pursue? Not a whole lot.
I had to get a second job. That will accomplish three things:
- supplement my income
- develop my network, and
- give me some experience in other fields, either an alternative career or the actual one I want to pursue
I took second and third jobs. I wasn't picky. As long as it fits my hours and it pays decent.
#2- Credit Card
If you're new in the US, credit score was one of the trickiest things to navigate but it I needed it for future investments like a house, car, and my own business. So, I got a credit card as soon as I can.
You will most likely get a really shitty credit card with high interest rate but you need to bite the bullet and do it because you need to start building your credit score as soon as possible. Two banks have a good program for those starting to build their credit score or rebuilding their credit score:
- Bank of America
- Capital One
For Bank of America, however, they had me go on a secure credit card first. It’s like a debit card. I had to deposit money in the card and that’s the maximum amount of purchase I can make. After six months, they upgraded me to an actual credit card.
#3- Credit Card with Rewards
Once you get an actual credit card, numerous credit card companies will approach you. Choose the one with a good rewards program. I like cash rewards or travel rewards. I can use a cash reward on anything and I like travelling but always feels bad about spending because it’s a luxury.
Some credit cards with good rewards program:
- Chase Sapphire
- Bank of America Cash Rewards
I know there are many who will argue that it is better to get a card to fit your needs. Everyone needs cash. So, instead of getting a lot of credit cards, I decided to settle for two and charge everything to my card, from rent to coffee. After a year, I got three times the amount of annual fee as rewards points.
As soon as I got an offer from AMEX, I applied. I started with Amex Blue Cash with a $2,000 limit. After six months, they upgraded me. The downside is the high annual fee but the benefits outweigh it. AMEX provide travel insurance, emergency assistance, and others. If you funnel all your expenses to select cards, you get more rewards points.
#4- Get Two Bank Accounts
The problem with liquidated assets is that it behaves like liquid. It flows out of your and on to things beyond your control.
It is best to set up a bank account not easily accessible to you.
Set up two bank accounts:
- Where you paycheck gets deposited
- Where your savings gets deposited
For your savings account, choose one you can easily access. I personally used Amex High Yield Savings because it doesn’t give me an ATM card and transferring the money out from it takes several days to complete. They don’t make it easy for me to get the money and also give one of the highest interest rate but still isn’t much.
#5- Auto Transfer your Savings
Depending on when you usually get your paycheck, you may auto transfer a specific amount to your savings account. This “forces” you to work with what you have left.
I used the bank account where my paycheck gets deposited to pay my bills which are all charged to my card.
After several months, I checked my savings account and was surprised to see the amount got twice the amount I couldn’t raise in a year. It pumped me and decided to increase the amount of my savings and kept on doing so. I also made it a point to deposit at least a quarter of any other income I get, whether it is from side jobs or my part time work. After a year, I realized that if I keep on going for a year or two more, I would most likely be able to save enough for a downpayment for a house here or use it to invest on something else.
#6- Get a retirement Plan… and a Life Plan
I had to think about retirement. I didn’t want to continue working beyond 60. I want to retire when I get to 50 if I can and just continue writing or doing things I love doing instead of working for someone full-time. I also wanted a life plan so that I have the security of knowing that the people I love will get a pay out if something happens to me.
A retirement plan is the key. I started with a straight up retirement savings account with Primerica because it was the only one I could afford. Once I saved enough in there, I took the money out and started with Fidelity and Vanguard. Both companies will give you the option to do a straight up retirement plan or explore other ways to grow your money.
I decided to do a straight up investment plan and only recently started playing with the market.
The retirement plan secured me. I knew I was saving something for my retirement. I knew that even if I send everything I have left back home, I am also securing my own retirement. When the time comes when I can’t work anymore, I won’t be at the mercy of other people. I have money to take care of myself.
It made me feel better about giving. I didn’t feel like I was giving everything away and I have nothing. I give much much more freely.
#7- Spend but…
I cannot deprive myself. I can't bring myself to work like a dog and not be able to do the things I want. I need to buy what I want to buy and go where I want to go. I bought that expensive coffee when I wanted to, bought the phone I wanted and the iMac I wanted. I took trips and ate in restaurants I wanted to try out. Besides, saving $10 won’t make rich.
So I spent but whenever I want to spend on something, I take away from my other luxuries and not from my savings. If there is a pair of shoes I wanted to buy, I will cut down on my Starbucks coffee purchase until I am pool the unspent Starbucks money to buy the shoes I wanted.
Eat, shop, travel… spend don’t take away from your savings, take away from your other
#8- Invest on Yourself
I cannot get stuck working in a small company forever. I want to experience more and do more and it wasn’t going to happen unless I keep up.
I had to invest on my growth. Getting a second job is one of the ways I can do that but I also wanted to learn new skills or improve on my new one and pursue further studies. I graduated from the Philippines and having a degree in America will increase my value in any other part of the world including America itself.
I decided to take a post-graduate degree. If pursuing a higher degree isn’t your cup of tea, you can do other things like taking short courses, learning a technical skill, or attending worships and conferences.
Heck, even attending the gym is an investment on you.
#9- Long Term Investment a.k.a. Stocks
I stated that I didn’t actually do active investment recently because learning the stock market needed time which I didn’t have when I was starting. I still don’t but I had to start somewhere. I decided to do long-term investment. Whenever I raise $500, I buy stocks and leave it there. Stocks, historically, don’t lose. It will go up and down but long term investment yields gains as long as the company you invested on doesn’t shut down.
Start with two or three stocks and leave it for several years. Observe and see where that will take you. If you are still in your 20s, leaving it for 10 years will make a big difference. The best part is that you don’t have to do anything. You can go on with your regular job and your money grows by itself.
#10- Don’t Go for Loose Change
Working two jobs and working 14 hours a day sounds great but only while you have the energy for it. Also, it isn’t much if you are the kind who wants to live to the fullest in experience and material things. You need to go for the big money. You need a job that will go 6 digits so you can “have a life”.
Don’t be content to being a clerk forever. Aim to be a boss. Do your best with your current job and aim for a promotion but always be open and always look for better opportunities. Fix your LinkedIn profile, update your resume, network.
It sounds like a lot and it may be is but it is better to make the sacrifices now and reap the benefits in five years than wake up after a decade and find yourself still living hand to mouth.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.