Managing Your $$

 

Selecting a bank and opening a checking account is the first step to managing your money while in the United States. While I cannot recommend any particular bank, I do have some tips for choosing a bank. Most host families autodraft their au pair’s weekly stipend from their own account online. It is easier to set up this autodraft if the au pair is using the same bank as the host family (although not necessary). The most important thing to consider when choosing a bank is it’s proximity to where you live. Is there an ATM available? Prior to opening an account, ask what fees are associated with the account. Most student checking accounts do not charge fees. Au pairs are eligible to open a student checking account as they posess a J-1 visa. Contact you bank prior to opening an account to find out what documents you will need to bring. Most banks require your passport, your I-94, your DS-2019, a second form of photo identification (Driver’s License), as well as your proof of residency (mail addressed to you at your host family’s residence).

While most banking is done online, it is still extremely important that you keep track of your account in your own checkbook register. Keeping track of your account should help you avoid overdrafts. All banks charge overdraft fees. Overdrafts can result in exorbitant charges from the bank, and in more extreme cases, severe punishment. Some banks allow you to link your savings account to help avoid overdraft fees. However, you must have sufficient funds in your savings account in order for this to work. Your debit card is not a credit card. You are not borrowing money. You are simply accessing your money that you have held in your checking or savings account. You can use your debit/ATM card like a “credit” card in stores, but bear in mind that the money is withdrawn from your account immediately. There may also be fees associated with such transactions, so be sure to check with your bank. When in doubt, use the “debit” function when using your debit card to make purchases. In order to use “debit” function, you will need to set up a PIN number. Follow the instructions from your bank or on your card to acivate and set up your PIN.

It is a good practice to set some money aside in a savings account. Savings accounts are free and can be established when you open a checking account. Unplanned expenses can happen to anyone. A speeding ticket will cost you around $200. A visit to the doctor and prescribed medication will cost you $50-$70 (with health insurance). Sometimes the unplanned expense is accompanying friends on a last minute trip.

While you are shopping in the United States, you will be frequently asked if you would like to open a store account or if you would like to apply for store credit. Most often than not, you are being asked to apply and open a credit card. Personally, I do not recommend opening a credit card while you are in the United States. Many people “abuse” credit cards and find themselves overwhelmed in debt. Debt follows you wherever you go…even back to Germany (or wherever). A credit card enables you to borrow an amount of money for a specific amount of time before the credit company (bank) charges you interest on the amount you borrowed. This period is usually 30 days. Interest rates for credit cards vary depending on your credit history. If you have no credit history or limited credit history you can assume to pay 24.99% on the dollar. For example, you use a credit card to pay for your flight to San Francisco at $500. If you do not pay off your credit card ($500) before the next billing statement (30 days) you will now owe $625 (24.99% interest rate on the dollar). Scary? Avoid a nightmare and do not open a credit card.

  • When it comes to spending your money, try do so wisely. Do not purchase more stuff than you can reasonably get home. Airlines charge extra for overweight and additonal luggage ($$$ of dollars).
  • You can save money by eating at home with your host family.
  • When traveling, travel with a group to help split the costs of transportation and lodging.
  • Many stores have reward cards that give you currents sales promotions as well as discounts for spending X amount of dollars. These often fit on your key chain.
  • Check out GROUPON for discounts on all kinds of things from skydiving to haircut.
  • Avoid giving money to door to door sales people (solicitors), especially if they ask for payment before you receive the item.
  • If using Craigslist, please only do so locally. Again, do not provide payment until item is in your possession.

 

 

 

 

 

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