7 Financial Habits of Immigrants

By Stew

I recently heard someone refer to a multi-family living arrangement as, “that’s what Mexican’s do”. I think that the comment was intended as a slight. Even if it was not, it was clear that the speaker thought a particular life choice was something that he would not consider. What he did not realize is that in a world drowning in debt, many Hispanics have figured out some of the secrets to achieving financial freedom without credit.

His statement jump started a few thoughts and a little research on my part into how immigrants order their lives financially. Before I get too far into this, let me state that these financial strategies are not confined to Latino’s or Hispanics or Mexican immigrants. I actually think that most first generation American immigrants – Asian, European, African or Antarctican – survive and thrive using these techniques. At some point, all of us are descended from immigrants and there is a good chance that someone in your heritage used some form of these techniques.

Successful first generation Americans or immigrants have learned to achieve financial stability without debt. Here are some of the ways that they do it:

  1. Focus on other people. What is the point of your life? A nice house? A nice car? Cool vacations? Immigrants tend to focus on making a better life for their families – be it a father back in the old country or their grandchildren in the new country. Therefore, immigrants will make more sacrifices when it comes to spending money, the more luxuries and conveniences that they deny themselves, the more cash they have to give to family. This focus proves to be highly motivating in spending money frugally and avoiding risky debt.
  2. Use your network for help. Whenever I come up against a financial issue or a problem that needs to be solved, I have an Italian friend who always says in his best New York-Italian-mafia voice, “I know a guy . . . ” The saying has become a little bit of a joke between us, but the fact is that John has developed relationships with all kinds of people who can help him out at a reduced cost. Family, church members, neighbors are all resources who can help immigrants avoid high costs – of course, you need to be willing to be a “resource” yourself. If you do not have a lot of money, try doing favors like helping people move, shoveling driveways and giving trips to the airport.
  3. Combine resources. Most 3rd and 4th generation Americans would never consider living with the family of a brother or sister under the same roof – yet this is what immigrant families have done for decades. Most Americans are too aloof, ornery, too proud or individualistic to consider combining resources in this manner. However, think about how much better your financial picture would be if you could split the rent or mortgage payment! Yes, there would be some tension when living with family, but if both entities had the same convictions about avoiding debt, couldn’t you find a way to get a long? There are all kinds of ways were combining resources with family and neighbors can save you all kinds of money.
  4. Diversify. Immigrant families are good at finding many different ways to make a living. They do not depend on one means of generating income and everyone has some responsibility toward the common “pot”. Children and teenagers do odd jobs, not just for spending money, but so that they can help support the entire family. The father will often have more than one job and even if the mother is a full-time homemaker, she finds a way to bring in a few extra dollars.
  5. Sacrifice for education. For many immigrant families, when one of their off-spring graduated from college it meant that they had achieved a significant financial milestone. A college degree meant that their children were in the best possible place to care for themselves and possibly their parents in the future. They scrimped and saved and worked to get those first few kids through those four years. Many times, the entire family contributes toward the college costs for one or two individuals.
  6. Do it yourself. Unfortunately, modern technology has placed car repairs and electronics repairs far beyond the reach of the average person. However, most of us can still change our own oil, cook our own food and do most home repairs. Can you imagine an immigrant hiring someone to wash his windows or mow the lawn? Me either. Do it yourself and save some cash.
  7. Think long-term. In ten years when you have no debt and a nice sized nest egg, will it matter that you drove a 15 year old car and never when out to eat today? Immigrants are good at focusing on the big picture and making small sacrifices in the immediate in order to accomplish their larger goals in the future.

Learn to live like an immigrant and just maybe you will start to see some light at the end of your financial tunnel.


6 Responses (including trackbacks) to “7 Financial Habits of Immigrants”

  1. dramon Says:

    This honestly is not an immigrant thing (or maybe it is in some minds). I remember growning up, we had other people living with us all the time. It was often relatives that needed a hand up getting started. We did it for a short period of time while saving for a down payment on a house.

  2. snow_drops Says:

    Maybe it’s a mindset/culture thing. The Western people that I know would live with their family for a while, while working toward having their own home. They will move out as soon as they are able to.

    The immigrants are content to be living with their family. They will move out if the house is too small for everyone to be under the same roof. But they are okay with this arrangement to be a long-term (or even permanent) one.

    Of course this is generalization, but most my friends are like that (Western and Immigrants alike).

  3. Donna Says:

    Good article. When I was growing up my father worked fulltime in a factory and farmed at night after dinner. My grandmother lived in a house on the farm as did my great uncle. We supported them along with ourselves. There was no food stamps or welfare. My dad did it because it was the right thing to do. Currently, people will watch family struggle when they could easily help (unless they are not wise with their money). I think it is sad the way society has gone. Things before people instead of people before things.

  4. Kathleen Says:

    Great article! I live and work with a large urban Latino population and have observed the positive impact that Latinos’ relational and familial focus has on their finances (and in other aspects of their lives as well).

  5. Anonymous Coward Says:

    Immigrant Status/Culture has nothing to do with this. I know plenty of “Non-White” people who can’t manage their money and frown upon many of the things you suggested. Most of them are second generation immigrants, who had a lot of benefits (like education) provided by their parents.

    It’s about self-perception. If someone thinks that they are better/rich, they feel these things are beneath them . It just so happens that most immigrants come here without much education/wealth and so start lower in the economic ladder. But their children have all the advantages and so cannot relate to what their parents do.

  6. Kika Says:

    I have observed the same habits amongst the majority of first generation immigrants that I know/ have known. Second generation changes everything. I thought this was an interesting post and often discuss this idea with my husband (a first generation immigrant, by the way).

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