How Much Money You Can Really Save in America?

I made this video to show the reality of saving money in America – Is this how much you an really save in America?

Summary : Saving Money in America

  • American Dream
    • Test Prep
    • Admission
    • Visa
    • Financial Aid
    • High Paying Job
  • Salary – Single – Unmarried
  • Expenses
    • Monthly and Yearly Expenses
    • Taxes
    • Rent
    • Food
    • Auto
    • Insurance
    • Left over Savings After all expenses
  • Additional Expenses
  • Questions to You

So, what do you think?

  • Did you expect to save more?
  • Do you think the expenses and savings listed in the video reflect the actual reality?
  • Can you think of ways to save more money in America?

Share your answers in the comments section. Let’s have a open and honest discussion about America, Personal Income, Finances and Savings.

Income, Expenses and Savings  – Series




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  1. The estimates are right , blunt ,brute and right to the point for the average guy. My few tips are:
    1) Get a used car, unless you can afford a new one, thus lowering the car insurance. Of-course use caution while purchasing a used car.
    2) Drive responsibly. Avoid drinking and driving, thus avoiding accidents, hence damage to the car and hike in car insurance.
    3) Stop expenditures on smoking, drinking and eating out. Start cooking in home and carry lunches.
    4) Calculate the rent considering facilities such as free cable/ internet, in house laundry, gym, distance from workplace/college, supermarket. Reason is, some rents which seem more will save you more, if you take a bigger picture in consideration.
    5) If you have a full family, always visit dollar-tree kind of stores first. You would get some items , e.g. air freshers, cheaper.
    6) Other things: walk/use bicycle for short distance, avoid using credit cards, use alternative items such as dyson’s hot/cool system instead of burning electric for the entire house, especially if you confine yourself to only one room, when roommates are out.
    At the end, please forgive my grammar here … 🙂

  2. Hi Raghu ,
    such an interesting subject on MONETARY been a reader from past 1 year. you doing a good job man.I am 25 years old(single 🙂 ) have already an masters with 3 years of IT work exp. applying for MIS fall 2014.

    My question is how much one can save approx. assuming he/she is married right after masters, and his/her spouse is not working.At the end of the day how much one saves. Can you shed some light on this, coz most of them have to face these type of financial problems. once they get married. where the real game starts in life … 😉

    I guess it will be helpful for most of the HSB readers.

    Thanks Indeed !!

  3. Hello sir Raghu,btw very nice & practical inofs regarding savings in US.same scenario with me where I use to get $40,000 but my savings was just a $1300 in hand per month.How ever I like the working & treating culture so I moved to canada on PNP,, & in some months I will become P.resident,where I can save a better then sister use to work in texas On H1 (gynecologist MD) ,,but by last 2 years she also moved down to Mumbai where she’s salaried all-most same to US but having lump of saving in her hand.

  4. Hi Rahu,Thanks for the video a must watch to all those GRE/GMAT aspirants. Hope this vid gets viral as WHY THIS KOLAVERI DE !?.
    Before i start commenting i would like to appreciate everytime you say all this is for “Single man/women”. Salute 😛
    $50,000 p.y i guess its the lowest your talking about and not the average salary i guess.Pls check this site for more reference and guess the data are genuinely credible which i cross checked with my friends/relatives in US.
    I would like to add few points to your video as critic/comments whatever suits you.
    1.Any Graduate who is taking a job of 50000$ is either an average who yet surviving from india to us all over again.
    2.If not so then its bad luck.. ofcourse luck plays role or he/she missed the reason he was there as you said, was all these expected.
    3.Any graduate will come to know all these in 2 semesters at least and im sure the same person who has cracked gre and got admit is more capable of “SAVING” more than what your video shows.
    4.I guess getting internship plays an important role and it might help what ever he/she needs in future.Of course im not sure how much this impacts but i hear my friends earning 10 grands in 6 months and more than that which can meet any spending you listed in a conservative way ofcourse.
    I would like to ask few questions to you raghu.
    1.If a person has 2yrs work experience in A Technology what will there be his/her chances to get a grad program outside their experience such as in B or C Technology and what will be the scenario when it comes for jobs for the same reason.
    2.Lets say he/she is getting a job at 25-26 and say its a decent job with 50-60 grand p.y on average what is your take for the below options.
    Clearing their debts in 6-7 and not being concervative and not single or clearing their debts in 3-4 years and being concervative (considering guys getting married at 28 and im not sure about the ladies here).And also considering that he/she is getting a decent appriasal and/or promotions atleast anytime in 2-3 yrs of employability.
    I know i have not put all that runs on my mind but these are atleast the points coming first even after i saw your 2nd video.
    Your comment and answers are most welcome here (email removed)

    1. Vignesh – Facebook and google pays 95k for software engineers but most other companies will be around 40 to 60k. Someone i know got a offer for entry level software test engineer for 40k.

    2. Vignesh, I guess the location of your university and your job is a major factor in determining your salary and also your expenses. A life you live in Colorado with 75k per annum salary in Colorado, will need some 95-98k pa in California. That being said, people from my university with similar coursework in MS and similar job profile in their first job get paid 72-85k in CO and 95-103k in CA.

      I will try and attempt you answer your questions to Raghu. Raghu, correct me if am wrong.
      1. Yes, your work exp. will definitely help you. May be you will have to talk about ‘How your work exp. in A technology is going to help your MS in B technology’ for your admit. When it comes to post-MS jobs, I have seen people with work exp. given preference over the MS guys with zero work exp.
      2. From the above salaries I have mentioned (the ones I have seen), I guess your estimates are very con’c’ervative and you can pay back your loan way before the time you have mentioned.

      Bottom-line: Do research about the Job profiles and pay of the graduates from a particular university get, before applying to that university.

      1. Thanks prasanth.. thats exactly what im doing, its just time matters when you work you hardly find time eventhough u cant give an excuse for your carrier and life.Thanks again.m/

  5. I guess its better to study and live in european countries like Germany,France,switzerland or UK. In germany, language is not a big problem in day to day life but still one should learn german,makes life more easier. Here the expenses are bit less, you can save more on transportation as means of public transport are best and if you have a student ID card, you can get discount of 10-30% on almost everything ( including food, mobile bills etc. ) Germany rocks!

  6. hai raghu,
    my name is mounika i wanted to do m.s in one of the top universities how much rank we should gain in gre exam.what would be the fees per semister could i be able to do part time job to run myself by my own there..please give me detail idea of lifestyle in usa.

    1. Lolllzzz,Monica ! if you can crack that GRE exam ! why won’t you try to get CAT or XAT exam in india !!! & try to get in to top IIMs ! I know a guy (can’t name but from shillong IIM) who work with my bro in Accenture consulting,New delhi getting paid 8 lacs( $15,500) a month whooomp salary at 28 of age.So hope you got my point.Which can never imagine even after working bunch of years in US !!! well Its just my suggestions,It’s all depends when it comes to you in real.for your info where I work they have all time openings for us on L1 & H1B ,,,,will you believe me ,,, no one’s gets interested exclude less salaried bulls !!!

      1. Hi Prashake,
        First try and get the name of the person who you are talking to right, then you can correct them… It is good to hear that your brother’s friend is getting 8L per month, can I know more info about his work? What is his job profile? Also, if you can tell us more about yourself… What are you doing now and what are your future aspirations?

      2. Hi Prashake,
        First try and get the name of the person who you are talking to right, then you can correct them… It is good to hear that your brother’s friend is getting 8L per month, can I know more info about his work? What is his job profile? Also, if you can tell us more about yourself… What are you doing now and what are your future aspirations?

      3. so what buddy !!! My father is ”A” Grade Electro Pilot ( Train driver)
        in Surat-mumbai route at Indian railway, He earns all-most near to 3.lacs INR per month including his TA & OT etc.I know a section engineer in Railways earns more what you describe here,Yes more than 8 lcs but He can’t show it legally,Hope you get my Point buddy.

  7. The video was great and easy to understand.
    I wanted to ask if MS in CS is done then how much money can one expect as a fresher?
    And the range?
    I think rather than saving money one should focus on earning more money.

  8. Hey Raghu,
    This video is great, i dunno frankly what I had expected but yes did not expect that we would be able to save like 50% of the salary. I am going for Masters in Cell and Mol bio, biotech at UoA. What could I expect as salary?

    To save some more, if you really dont require a car, dont buy one just because you want one. And go on fewer trips i guess.

  9. Hey, I just wanted to know where PhD students stand in the whole scenario? Raghu would you be kind enough to make a similar video for PhD students or at least you can comment here. Even that would be great.

  10. Hi Raghu,
    I am a guy having more than 8 yrs of experience in IT.After working for few years I wanted to work in USA and I thought of landing a job over there based on my experience.I never got an onsite opportunity and I think if you get one then you are lucky.I am earning a descent salary in India.This year I got through some universities but I had to defer the admission due to personal reason. Most of the guys dream of staying in USA for sometime and then returning back to India.I don’t know whether I should go for the MS program in future .

      1. Hi Raghu,
        I know it is never too late to attend the colleges but shall I look into the ROI after studying over there.I would be doing the same kind of work over there also.Have you come across people getting their MS degree after having good amount of experience.

  11. hi raghu
    what is the salary package we can expect after completion of masters from a b graded university

  12. Hi Ragbu,
    In reality, your estimates were frugal and would apply to low cost cities only. There are two sides to this issue. In US, the population is dominated by middle class and over the cost of time, one can invest in one’s home country, say India, and retire afterwards. On the other hand, leaving in India may not afford you the opportunities you have in the USA. It is true your compatriots may earn more in India to the USA, but are you sure you would have had such opportunities if you were in India? It’s hypothetical to assume that you will instantly get a high paying job in India. Another advantage of leaving in the USA is the opportunity it affords your kids and it’s because we want similar or same opportunities that we came to the USA anyway. The reality is that there are pros and cons. What you want totally depends on you and your plans. Yet, there are foreigners in the USA who would NEVER have made it had they ventured out in their home country. This is just to keep it real. Thanks guys.

    1. That’s the reason I said this is conservative estimate. Just by adding one more major expense will put a big dent in your savings.

  13. No offense to the person who created this video – These expenses will fit for someone who doesn’t live in California or New York. I currently live in San Francisco (may be an expensive city according to you), and I feel the expenses that is shown here, doesn’t make any sense to me. Are you kidding – Rent and food expenses are much more than they are shown here.

    1. Did you even listen to what I said in the video?

      Last but one I talk about expenses in California, New York which will be more than what’s listed in this slide.

      But you ate right. It gets expensive in major cities.

  14. so total saving is 20000 dollars ,with current exchange rate= 20k * 60=12 lakhs.

    In india after ms one gets avergae salasry of 5 lakhs after expenditure in rent,daily needs,etc.. saves 2 lakhs per annum

    so by earning in US are earning 6 times more then india…

    save money by working in US for 10 years and invest in real estate in india in very first year.

    at the end of 10 years or so return to india and live a lavish life.

    1. Provided your expense remains the same. Cost if sending kids to day care per month is about $1000.

    2. Really!!! Is it really possible to live in USA for 10 years and then come back? What about the taxes you pay, what about the increase in expenses within 10 years, who knows your ofamily ever wishes to come back if you get wife and kids. Not so practical…

    3. There are many scenarios and your expenses will skyrocket in USA. Imagine your tooth having pain and you need to visit a dentist. Imagine paying 1000 dollars to mechanic for car repair of Transmission.

  15. Item Note Total Savings
    Joining Bonus (After Tax) I didn’t even consider tax return 15000 15000
    Salary (After Tax) I didn’t even consider tax return 72000 87000
    Apartment -12000 75000
    Transportation Don’t need a car and Employer
    provides free bus pass.
    Public Trans is pretty good 0 75000
    Educational Loan (remainder)Payed at once with signing bonus -10000 65000
    Phone -480 64520
    Calling Card -100 64420
    Health Insurance -264 64156
    Food + Personal -12000 52156
    Utilities -1200 50956
    Trip to India -400 50556
    Tax Return No State Tax (Wild guess of the return) 4000 54556

    Sorry for being anonymous. Employer policy does not allow disclosure of compensation.

    1. absolute BS. You dont have car. It is difficult to imagine life in USA without car and then add car payment, Gasoline, Car insurance. and 400 dollars for your India trip if your employer is paying your ticket. What abt your utilities-100 dollars per month and you managed Cable TV, electricity, water, internet in 100 dollars.what abt social security, medicare cuts?

  16. That sounds we save just about 15,000 dollars per year, even if we are frugal in spending. Anyway, glad to hear the reality.
    I am not experienced to speak about more ways to save in the US.

  17. Dear HSB,

    Thanks for the thought provoking video. I think you have presented a fair estimate of day to day expenditure in the US. To answer your question; I don’t think you can save more than ~$20000 by cutting down your expenditure, given the fact that it is a conservative estimate. Only way would be to supplement your income by investing your savings. Stock markets can be ruled out, as they are volatile and risk prone. Risk free investment options such as certificate of deposits (CDs) can be considered. If one thinks the rate of interest (~1% per year) is not sufficient, he/she can invest their savings in India, in the form of fixed deposits which have ~10% growth rate (provided USD conversion rate remains steady).

    P.S. I have been thinking about these options lately. If you have better ideas, please share it with us. Thank you.

  18. I wud follow the following if i were to encounter problems like these

    1.transportation- i wud take public transport for commuting around city may be a train wud reduce my cost and a faster way too than a car ..
    2.housing- i wud stay at a place quite far away from downtown ,cost wud be more if u were to stay in the heart of the city and i wud ensure it has a better transit connection between points

    trips-will reduce the trips to india and will have to reduce the trips to exotic locations ,etc that wud reduce the cost .

    cheap international calls like skype and other international calling cards can reduce the cost in terms of monthly expenses for connections ,etc ……

    will have to buy things in clearance sales and during days like black friday to reduce the cost spent on tech commodities

    i mean all that i mentioned is purely hypothetical ,i mean its my suggestion .

  19. Raghu,

    I think the expenses and savings listed reflect the actual reality and yes I did expect to save more.

    A few bullet points about saving extra money.

    1. Drive fuel efficient cars more miles per gallon definitely helps.
    2. Spend wisely on your needs and not on your wants, for example don’t purchase expensive mobile phones every 6 months.
    3. Reduce eating at restaurants and cook at home. Eating out is expensive and unhealthy.
    4. Travel to India once in 2 years, this is definitely something to consider
    5. Use car pooling or public transportation ( not an option in Texas, so only car pooling works).
    6. If you have an amazon prime account then you can rent movies for a dollar

  20. By finding people to share your apartment with (just like in college), keeping a close tab on your expenses (accounting every cent), carpooling, staying single till at least age 27 (this includes “no-dating”) and last but not the least by becoming a miser (I don’t believe this is possible, but still worth mentioning). These are few ways in which we can reduce our expenses and save more during our first job.

  21. Hi Raghu..That was a great video btw…I personally think that in US, companies see how you can really benefit them with the skill you have..If a student can show a great resume with industry experience like internships, part time jobs etc during the course of the masters you could end up making a little extra bucks……
    If these dont work there are things you could do on the internet that could actually fetch you money. One could be a blogger as mentioned earlier, a freelance writer , a mobile application developer or a programmer. There are an ample number of websites online where you could do all this all from the comfort of your living room… 🙂

  22. Hi Raghu,

    Firstly, I appreciate the information and facts accumulated for this video. Coming to the part about saving money, nothing much can be done for the 1st 2 years of your job. The main thing is to concentrate on getting the loan repaid. Once that is done, you will have a lot less to worry about. And by then, you would have gained a work-experience or 2 years by the end of which, he/she would be eligible for bonuses and salary hikes. So its better not to be penny-wise pound-foolish. Its my personal opinion.

  23. Hi Raghu,

    One way is to try to cut down personal costs and to shop cleverly. As it would be your first job and you still have a long way to go, better not to buy expensive cars and best to find cheaper apartments (but with an acceptable level of living). Whether it’s college life or working life, it all comes down to clever money management!

    1. Shruthi – How much can you save by going to cheaper apartments. If expensive cities, if you try to save on apartments, your travel expenses will increase.

  24. Hi Raghu, Nice and informative video. But except for the tax part I pretty much had a realistic picture of other expenses when I finished applying for MS. My doubt is that do we have any tax exemption in US if we are paying student educational loan that was taken in India or for that matter if we are paying any other loan even in USA? Thank you.

    1. Why would US give tax exemption for loan you are paying in India? What do you think tax is not realistic?

      1. Sorry, I didn’t mean it wasn’t realistic. I had no idea of how much tax we might have to pay. And could you tell us why some states in US are tax-free (like Texas)? And does tax free mean we could save more money in those states?

  25. There might be an exception to those who work in Tax free states. Eg (Tennessee,Texas). And rest of them are basic expenses that one should be spending it but as you said it depends on individual . If he really wants to save some pennies be ready to sacrifice some of the unwanted or at least lessen it for 2 more years and it might work well.

    1. If you like in state income tax free state, they will compensate by paying you less in annual income.

  26. Hi,

    I think other methods to save money can be like professional blogging like you or other internet or part time job.

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