Supportive social networks are crucial to immigrants’ financial stability

By Tiffany J. Nhan

Immigrants who have supportive social networks are better able to navigate the U.S. financial system and build wealth than immigrants without supportive social networks, according to a new study led by a University at Buffalo School of Social Work researcher. The research showed supportive social networks help immigrants navigate language barriers, discrimination and other obstacles by providing financial resources and information. 

Led by Yunju Nam, PhD, associate professor in the UB School of Social Work, the paper is available online ahead of a forthcoming print edition of the Journal of the Society for Social Work and Research. Nam’s co-authors on the paper were Yingying Zeng, PhD, of the University of Georgia; Margaret S. Sherraden, PhD, of Washington University in St. Louis; Jin Huang, PhD, of Saint Louis University; and Eun Jeong Lee, PhD, founder of the Asian American Resources and Information Network.

Nam and her co-authors interviewed 13 low-income Asian immigrants in Los Angeles to assess the participants’ financial experiences, including access, management and asset-building. After analyzing the interviews, the researchers identified five key themes, including structural barriers immigrants faced integrating into the U.S. economic system, how social networks could help or hinder their financial stability, and when government programs were most helpful.

1. Structural barriers that immigrants face include language barriers and limited knowledge about the U.S financial system. “When I call 1-800 numbers, there are only two options: English and Spanish. I have no idea about where to go or what to do. [I can’t find] documents in Korean,” one participant said.

   Additionally, limited knowledge about the U.S financial system restricted access to financial services and caused significant losses. Some participants struggled with creating bank accounts and taking out loans and reported limited economic opportunity. “Well, there is no money to manage,” one person said. “Within one month after I deposit money, every dollar goes out.”

2. Supportive social networks could help by providing basic information on how to navigate U.S financial systems, open bank accounts, remove institutional barriers and access direct economic benefits. “We opened our own account through a friend of our son who is a bank manager,” one subject shared. “[Without an endorsement they would] ask for many requirements.” 

3. Social networks were not always beneficial, though, as they sometimes depleted financial resources and increased mental distress. Some participants who loaned money to or relied on others to manage household expenses were negatively impacted by their social networks. “A traditional Taiwanese man always lets the wife control the [household] finance,” said a participant. “That’s totally a disaster. My wife spent $2.5 million in 5 years.” 

4. Supportive social networks sometimes negatively impacted participants who were more dependent on their networks, which limited opportunities for financial independence. For example, one participant reported she “knew nothing about money,” but after her husband passed, she began to “learn more about money and manage money.”

   Participants who believed in their ability to control their own life were more likely to find solutions when social networks were unhelpful. These participants were more likely to find external information and resources. One participant reported: “When we were here for the first few months our children wanted giving us money [sic] … but I’m not used to that situation so I told my wife, ‘Let’s find some work because we cannot forever rely on them. These are just temporary help.’” 

5. Government benefits were helpful as a last resort. When facing crises they could not overcome through their social networks or individual efforts, immigrants were able to rely on government programs to assist in income for basic needs, such as housing and food. 

Overall, the study found supportive networks are crucial to immigrants' financial capability because they provide financial information and resources that help immigrants overcome language barriers, discrimination and other obstacles. Immigrants with non-supportive networks drained their limited economic resources. 

The researchers say social workers should advocate for more government programs and funding for vulnerable immigrant populations. 

“U.S. society has done little to support the economic and social integration of immigrants, despite their growing numbers,” Nam says. “We must remember that immigrants have been a driving force behind economic growth and cultural enrichment. It's essential to stand with immigrants and combat xenophobia and prejudice.”