Many immigrants who move to the United States have family and friends in their home countries to whom they send money, and the prevalence of this practice – known as remittance payments – as well as challenges around the money transfers themselves, can lead to considerable financial and emotional stress.
To put the practice in perspective, money sent home by immigrants surpasses international aid as one of the biggest financial inflows to developing nations. Globally, around one billion people – approximately one in seven – are involved with remittances, either by sending or receiving them. The United States has by far the largest remittance outflow. In 2017 alone, residents of the U.S. sent $148 billion overseas in remittances.
Life in America as seen from abroad
Bright Musuamba, program coordinator at ProsperityME, has personal experience with sending money abroad. “Many of us have responsibilities back home that require us to send money, whether that’s for a sick loved one, or to support people we have left behind who don’t have the same resources and opportunities we now have.
“And sometimes people back home assume that life in America is all sunshine and rainbows, and that money grows on trees,” she added. In reality, Musuamba explained, this couldn’t be further from the truth. When people first migrate to America, they usually start work earning the minimum wage – after they have received their work papers – and struggle just to support themselves and their families. “You have so many bills to pay. Rent, food, transportation…. And what little you have left over (if anything), you might want to put it in a savings account for a rainy day.”
Musuamba talked about the pressure many immigrants feel coming their way from their loved ones in their countries of origin. This pressure may be direct or more subtle. “Sometimes, when they call, you know why they’re calling, even if they don’t openly state [the reason],” she said. “It’s a silent presumption that you’re living better off than they are, so they’re expecting you to help them now that you’ve ‘made it.’ There’s also the expectations that you put on yourself. You think that you’re more fortunate than your relatives back home, so you feel guilty and obligated to help them however you can. It’s like a game of tug of war between your different responsibilities.”
Divine Selengbe, small business coordinator at ProsperityME, said, “It’s important to take care of your family back home and not forget where you come from, and help people who don’t have the same privileges as you do. But a lot of times people feel entitled to remittance payments, and you feel compelled to send the money. It can be very overwhelming because sometimes there’s this assumption that if you’re in America, you’re living this grand life, and you have all the money in the world because you have opportunities.”
People living in lower income countries often have a glamorized view of life in America, Selengbe said. “It’s hard to explain that sometimes I can’t send money because something came up. Maybe I had to go to the hospital, or my car broke down…. But then I wonder if I’m being selfish for not sending money. I wonder if I’m keeping them from eating or going to the doctor. So, it’s hard to balance out when it’s the time to send money and how it can affect them if you don’t.”
Challenges associated with sending money home
The financial and emotional strain of remittance payments, along with many other migration-related challenges, can contribute to mental health problems. “We don’t come from individualistic societies. We come from social communities where the well-being of those around us affects our well-being, too, and we need to care for each other,” Musuamba explained. “When we migrate here, that doesn’t change. I can’t just think about myself – I have to worry about every single other person that’s important to me, and make sure they’re all right. It’s something that’s not talked about a lot. I can’t imagine talking to a therapist here, and having them understand these struggles, because they haven’t grown up in that environment. So, I think we often feel misunderstood.”
And sending money abroad is expensive and often stressful. The most common method is through providers such as Western Union and MoneyGram, but even though this is much cheaper than transferring money from one bank account to another, fees still add up. The international average cost for currency conversions and fees is 7% of the total amount sent. Undocumented immigrants who want to send money back home face additional challenges, and often have to rely on friends and acquaintances to send money on their behalf, because the providers require identification documents.
Money transfers, particularly international transfers, are often vulnerable to fraud and scams. Wire transfer is by far the most susceptible to fraud, compared to other payment methods. In 2019, the value of fraud loss in the United States was $439 million. Globally, wire fraud is estimated to annually cost $30 to $50 billion.
“I don’t send money as frequently as I used to because scams have increased in recent years,” said Musuamba. “These scammers are getting more and more intelligent in the way they swindle you out of money. To avoid getting scammed, I never send money to someone I don’t know, and I always want to know the reason I’m sending money to someone.”
Many immigrants worry that the government is watching their every move. “We always have to think about how our actions affect every single aspect of our lives, particularly our immigration status,” said Musuamba. “We wonder how making these transfers is going to affect us in the future, whether it’s going to come back to bite us. It’s especially true for people who don’t have their paperwork yet. But we still send the money because the well-being of our families is a greater concern than what the American government thinks of us.”
Research shows that remittances relieve poverty in lower- and middle-income nations, improve nutrition, and are linked to increased expenditure on education and a decrease in child labor.
About 800 million people worldwide– or one in nine – are recipients. In 2018, more than 200 million immigrants sent $689 billion to remittance-reliant nations, $529 billion of which flowed to developing countries. For many lower-income nations, remittances constitute a substantial portion of their economies, often amounting to more than 10% of their GDP. The average monthly remittance of $200 to $300 that each migrant sends home frequently makes up about 60% of the family’s household income.
Even so, Musuamba and Selengbe both emphasized the importance of taking care of oneself. Musuamba had some advice: “I always tell people not to kill themselves trying to do things they’re not able to do. At the end of the day, if you lose your job, if something happens and you don’t have that income, not only are they losing out, but most importantly, you’re losing out and you’re the one who is going to suffer the most. Do the things that are responsible for your well-being first and with whatever you have left – and only if you’re able to spare it – send that home.”