Being a first-generation American often comes with unique financial challenges. From setting goals and building credit to planning for retirement, the journey can feel overwhelming without inherited financial knowledge or support.
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GOBankingRates spoke with financial experts who shared six key considerations to help first-generation Americans navigate and thrive in the U.S. financial system.
1. Navigating Unfamiliar Financial Systems
One of the first challenges is learning how to navigate a completely new financial system. Without parent guidance, even basic tasks like opening a bank account or understanding interest rates can feel intimidating or overwhelming.
Start by searching for free online resources and looking into local community programs or nonprofits that offer financial literacy workshops. Many cities have support centers that provide tools for budgeting, building credit and planning for the future.
2. Building Credit From Scratch
Andrew Lokenauth, money expert and founder of Be Fluent in Finance, said his parents arrived in the U.S. from Guyana with just $20 in their pockets. Their experience taught him some unique lessons about building wealth from scratch.
Lokenauth said starting his credit journey was rough. His parents never had credit cards — they operated strictly in cash.
“I remember getting rejected for my first card application and feeling completely lost,” Lokenauth said. “Started with a secured card with a tiny $300 limit. It took me about two years of careful management to build up to a 750+ score. Now I help other first-gen folks navigate this process.”
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3. Balancing Personal Financial Goals With Family Obligations
Lokenauth said he understands the emotional and financial pressure of supporting family back home while also trying to balance your own personal financial goals.
“Every month, I’d send about 15% of my income to help relatives overseas,” he said. “I found a balance by setting up a separate ‘family support’ account and being upfront about what I could realistically give. I had to learn to say no sometimes — something many first-gen Americans struggle with.”
4. Understanding Tax Implications
U.S. tax rules are notoriously complex, especially if you’re managing international remittances or trying to claim dependents abroad.
“The U.S. tax system might as well be rocket science when your parents can’t help,” Lokenauth said. “I made some expensive mistakes early on. Now I understand how to maximize deductions for sending money overseas and when it’s possible to claim foreign relatives as dependents.”
It’s a good idea to work with a tax professional familiar with international tax issues, especially if you support family members abroad or receive gifts from foreign relatives.
5. Building Generational Wealth
When it comes to building generational wealth, passing along knowledge is just as important as any investment you can make.
“Being first-gen means we can blend the best of our parents’ financial wisdom, like living below our means, with modern wealth-building strategies,” Lokenauth said. “We’re creating our own playbook that honors our roots while building a stronger financial future.”
6. Planning for Retirement Without Inherited Financial Knowledge or Support
Many first-gen Americans didn’t grow up hearing about 401(k)s, pensions or retirement savings. That makes the idea of planning for retirement even more daunting.
“Get as close as you can to maxing out your employer retirement plan, especially if it offers automatic enrollment,” said Dennis Shirshikov, head of growth and engineering at Growthlimit.com and an adjunct finance professor at CUNY. “Increase your contributions by 1% each year until you get to 15%.”
He also recommends exploring tools that make retirement planning more accessible.
“One nontraditional tool is a subscription-based financial coaching app that connects you to a certified coach for a flat monthly fee, making personalized retirement planning accessible to those who might not otherwise be able to afford professional advice,” Shirshikov said.
Bottom Line
First-generation Americans face distinct financial hurdles, but with the right knowledge and a little planning, those challenges can become building blocks for long-term success. Staying informed, setting clear goals and boundaries, and taking steady steps forward can help create lasting financial security — for you and future generations.
Looking to build a legacy? Check out our Life to Legacy guide for expert advice and smart moves you can make today.
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This article originally appeared on GOBankingRates.com: 6 Unique Money Challenges First-Generation Americans Face — and How To Overcome Them
