‘A lot of our parents were paid by the hour’: a first-gen money coach’s blueprint for wealth | Life and style

Maria Melchor remembers her first paycheck: $1,414. Fresh out of college and into a paralegal job at the Legal Aid Society in New York City. With student loans still in their grace period, for the first time, she had more than she needed.

“It felt like a lot of money,” said Melchor, now 30. Melchor was born in Mexico and immigrated to the US at nine years old. She grew up undocumented in Connecticut, watching her parents struggle to make ends meet.

When Melchor’s own income presented a chance to think beyond living paycheck to paycheck, she wanted to make the most of the opportunity. But most of the financial advice out there seemed tailored for people who grew up with money – and whose goals were limited to their own personal wealth.

“First-generation professionals carry responsibility to our families with us,” Melchor said.

Without advice that resonated, Melchor researched on her own, blending traditional advice with her lived experience as a first-generation professional, and charted a middle ground between financial independence and the collectivist finances she grew up with. She began sharing her reflections on Instagram, developing a following of 194,000, on everything from protecting your assets if you’re undocumented to scrutinizing government spending on immigration enforcement.

Now a money coach, Melchor’s second book, Always Have Enough: How to Build Wealth When You Don’t Come From Money, comes out in September.

The Guardian spoke with Melchor about first-gen guilt, how undocumented people can protect their assets and why personal finance is political.

You share advice tailored to first-generation immigrants like yourself. What are the biggest concerns that traditional financial advice overlooks?

Many of us carry what I call “first-gen guilt”. A lot of our parents were just paid by the hour in cash. [They] don’t have 401(k)s or aren’t even eligible for social security if they aren’t US citizens. We’re not only learning the ropes of a higher income bracket than our families, but navigating a newfound social mobility that can bring feelings of guilt and the fear of leaving family behind.

A lot of us who grew up without money also have this lingering scarcity mindset, [which] can end up influencing the decisions we make. A big part of working with my clients is helping them think not just in terms of what they need this week or this month, but what they need in the long term.

What advice can you offer to undocumented people and mixed-status families like yours about protecting their US assets in a climate that’s increasingly hostile to immigrants?

Your assets and money belong to you, no matter your immigration status. No one’s going to take your assets away from you, but it does get more complicated if you’re in detention or are deported and can’t immediately access your assets. If you do have loved ones who depend on you, it might be easier to transfer ownership to them through a limited power of attorney, or by adding them as a joint account holder or a designated beneficiary, so they can access your accounts if you are detained or sent back to your home country.

Many undocumented people avoid opening bank accounts because they fear it could expose them. What are the risks versus rewards of using US financial institutions?

There’s no federal law requiring legal status to open accounts. Any restrictions are discretionary and vary from bank to bank. To open an account, you need a name, a permanent address and a tax ID, which you can get by reporting your taxable income and paying taxes. A lot of undocumented immigrants are encouraged by lawyers to file their taxes with an individual taxpayer identification number (Itin), because it shows that you are not only a good-standing member of your community, but how long you’ve been working here and paying taxes.

[Historically], the IRS was not allowed to give information to federal immigration services, but the administration is encouraging the IRS to make changes that would force people to share their immigration status. Under this administration, it’s up to each individual whether they want to take the risk of making themselves known to the IRS if they’re undocumented.

Editor’s note: Melchor cannot give legal advice, and recommends that anyone weighing these questions consult with an immigration attorney.

In spite of those risks, do you trust these systems and advise engaging with them?

Do I think that our financial institutions and capitalism are the best systems for helping people find financial stability and prosperity? No. But I know that there are rules and regulations in place to keep consumers protected. I’m wary of them, but engaging with these institutions to build wealth might be necessary in spite of their imperfections. The price to pay if you opt out of these systems is staying in survival mode and living month-to-month indefinitely, without access to financial services that help you plan for the medium term and the long term.

How does the idea of “generational wealth” differ for children of immigrants? How does this inform how you talk to your parents about money?

It’s not just about us and who comes after us. Generational wealth is also about going back to the generation that came before us, and the generations that are with us, like our siblings and cousins, and spreading the prosperity and financial literacy across your family.

With my parents, helping them financially looks like me saying, “Hey, this is something I think about, and I want you to think about this too, and tell me what you’re doing.” So my dad will run things by me, like when he was refinancing their home, he asked me to look at offers, and my mom asked me for help finding the best banks and credit cards to use, and they’ve asked me to help them start investing. They’re young, in their 50s, and their plan ultimately is to retire in Mexico, where they have a house. Hopefully, between now and then, they’ll have more savings, and if I or my siblings need to pitch in, we will.

A lot of people I work with are worried about supporting their parents in their retirement, often while also thinking about saving for themselves and their future kids. Your parents’ retirement is ultimately their goal, but if you want to help, you have to sit down and say, “Hey, this is your goal, and I’m really worried about it. Can you tell me what you already have?” Then you can think about how you might contribute. You’ve just got to address the elephant in the room.

How do you incorporate your family members’ dreams and financial goals into your planning?

My overarching mentality is that you have to put on your oxygen mask first, before helping others. I’ve had clients who, when they started working, had their checks deposited into their parents’ accounts because it was seen as family money. What’s wrong with that scenario is that there are no financial boundaries built in.

This may seem obvious to Americans, but you should have your own financial accounts and know how to manage your own money. Even though we love our families, having access to each other’s money in only one account is much riskier. And if only one family member has access to all the money, what happens if your values no longer align? If you want to share money, transfer it to their accounts or Venmo or Cash App them.

I use a system with my clients called the Mine, Yours and Ours system. I ask my clients to start by naming the goals that are exclusively and almost selfishly theirs. Maybe that’s to have an emergency fund or to save for a trip to Paris. Then we talk about goals that include another person, maybe a parent, a romantic partner, a friend, or a sibling. Maybe you and your parents have been talking about going to visit family in your home country, and you’re wondering who’s going to pay for the flights. If you look at a trip like that as an “ours” goal, you can start communicating about it early, and openly talk to your family about how you’re going to break up expenses. Just make sure that all parties are involved in the planning.

You’ve talked to your followers about investing in the stock market instead of in property. Why take that approach?

For immigrants, especially people coming from Latin America, property is seen as the stable investment in our home countries. You buy it and own it, and it’s a place for you and your family to live, potentially for generations.

However, in the US, investing in the stock market is more accessible than owning property. You can start investing in index funds with as little as $1, and now with robo-advising, you don’t have to know much to or pay a lot to get started, whereas owning property requires a stable income, strong credit and a down payment. The stock market can be volatile, but your strategy can be more conservative and thus more stable over the long term, depending on your risk tolerance.

Your book has a chapter about accessing unemployment benefits, food stamps and other public assistance programs. Why?

Many of us are the children of people still experiencing poverty and [we] want to learn how to maximize what we do have to bring some wealth into these communities.

We all might get laid off at some point, so we have to know how to access unemployment income. Or maybe your budget is tight, and you only have enough for yourself, but your mom or friend is asking for help. This chapter can help you connect them with these resources. A lot of us in the immigrant community don’t know about these benefits because our parents were never eligible for them, and so I wanted to make sure that information is out there.

You frequently visited the White House during the Biden administration and recently posted a reel on public finances with New York City Mayor Zohran Mamdani. How does public policy relate to personal finance?

There’s only so much personal finance can help you with before you start running into systemic problems, and so it’s always been important for me to make the connection between the personal and the political. I loved Zohran’s campaign and its emphasis on affordability, so when he announced the city budget, I saw an opportunity to connect personal finances to city finances. Personal finance is part of how to get wealthy, but the other part is getting as much as you can from your government, who is supposed to be helping you, instead of helping corporations or billionaires.

Building wealth and achieving financial stability takes teamwork, and that team should consist of yourself, your community and your government. There’s value in focusing on what you can do as an individual, but I also want to make sure that people are not forgetting how important it is to also focus on the system that either enables or prevents the individual from maximizing their resources.