Setting up your finances in the USA
Introduction
Your personal and business financing is very different in the US from what most South Africans are used to. The success of the US as a financial power nation can partly be attributed to is its efficient money markets.
Banks
The first thing you would want to to when arriving in the USA is to open a bank account with a well recognized bank. This is essential in order to start building your credit, obtain your personal checks, deposit salary etc.
You may encounter some difficulties in open a bank account without first getting your Social Security Number (SSN#), since the rules have been tightened up as a result of the terror attacks on US soil.
You should compare the terms and rates with the banks in your area, but these are some of the larger saving banks in the US: Bank Of America, Washington Mutual, and Wells Fargo.
Insurance
Insurances in the US may appear expensive, but it can cost you even more to ignore them. If you are looking to rent a car upon your arrival, you should know that it is not uncommon in some cities to pay more for the daily insurance than the actual cost of the rental car. It is illegal to drive without car insurance in the US, and knowing how sue-happy some Americans can be, it is advisable to ensure that you have adequate coverage. Progressive offers comparison quotes and insurances for automobiles. If you have been a member of AA in South Africa, you can request credit for your membership and get a more affordable auto insurance in the US.
Health insurance is provided by most employers as part of your benefits package. If you are unemployed, self-employed or work for a small company that does not offer corporate health plans, you need to apply for an individual health plan. eHealthinsurance offers an online service to compare and buy health insurance. Expect to pay between $100 and $250 per person, depending on your current health status.
Home insurance is recommended even if you are only renting an apartment. If you decide to purchase a house, a homeowner's insurance is often required to obtain a loan, since they own the title until the loan is fully paid off. Again, comparison sites like Netquote or Insure offer excellent tools to compare rates and get the best deal on home insurance
Taxes
Every employee in the US is paying state and federal taxes. Deductions are made on your weekly, bi-monthly or monthly salary and you will file your income taxes annually. You can file completely online, using Turbo Tax by Quicken, the most popular and widely used tool. You will receive any money owed to you within five weeks.
If you intend to bring your business over to the US, however, it is a different ballgame. Tax rules are complicated and most small businesses will require assistance in understanding and filing their taxes. If you are looking for more than simply an accountant to file your annual taxes, Inkorpa can assist your business with financial planning, tax strategy, corporate registration (your choice of company form may have severe tax implications), as well as all required and recommended tax filings with the city, county, state and federal government.
Credit
The US economy is to a great extent based on credit, and the average household owes financial institutions more than $15,000, mostly in credit card debt. Each individual with a Social Security Number is given a Credit Score, based on earnings, debt, history, timely payments etc. If you default a payment, your credit score will be knocked down a few notches, and it will take you time to build it back up. The credit score ranges between 650 and 900. In order to qualify for a base home loan, you need a credit score of at least 700.
Consequently, it is important for immigrants to play by the book to quickly build a good credit. Start off by getting a Secure Credit Card with your bank and an in-store credit card with Sears, Mobil, Best Buy etc. Be timely in your payments, and always pay more than the minimum required payment. Within a year or so, your credit should be good enough to qualify for regular credit cards and equity based loans. You can obtain a copy of your credit score at FreeCreditReport.
If you have a question that has not been answered in this section then please ask the community in our relocation forums:
