Why Saving Money in USA is Difficult Than You Think (Video)

Raghuram Sukumar Personal Finance 21 Comments

There were some interesting questions about saving money in USA. Also, several good ways to save money in USA in yesterdays video. In this follow-up video I have answered some of your questions and gave more insights into the reality of savings money in America.


Saving Money in USA

Here is a set of questions I have answered in the video about saving money in USA and short version of the answers.

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 .

It’s never late to attend a college. With 8 years experience, it will be easy to prove your intention to study in USA for MBA than MS.

What is the salary package we can expect after completion of masters from a b graded university?

A grade university will give you more exposure. But, attending A grade university doesn’t mean your salary will be higher than graduates from B grade university. You can attend B grade and still get the high salary as someone from A Grade university.

So total saving is 20000 dollars ,with current exchange rate= 20k * 60=12 lakhs. In India after ms one gets average salary of 5 lakhs after expenditure in rent,daily needs,etc.. saves 2 lakhs per year. 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.

This theory looks good on paper, but in reality its not practical. I shared by experience here. If you get married and have kids, your expenses will go up considerably. For example, monthly health insurance payment will be close to $300 for a family. If your wife doesn’t work, then that’s additional $250 per month in expense, which is not included in this calculation. That’s when saving money in USA gets real tough.

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.

Investing in CD’s or Savings account in USA pays less than 1% in interest. But, savings account in India pays like 8%. But, you have to take the USD INR rate fluctuation into account. If the USD falls below 8%, you have lost your savings. But, to save money in USA, you have to take all possibilities into account.

Income, Expenses and Savings  – Series


  1. HI Raghu,How much could be the complete approximate expenditure in completing masters degree in any university?

      1. sir is it for 1 year or 2 years ,coz some i saw were upto the 40k mark for one year

  2. Investing in a FD or something in India is very subjective and highly dependent on one’s personal situation. For this strategy to work, all of the following must be true.
    1. You go back to India soon. (converting money USD-INR-USD will make sure you make nothing)
    2. INR doesn’t depreciate.
    3. You have all the patience to deal with Indian banks. I had to close most of my accounts as every few days the banks throw a new tantrum. Most irritating is when they ask you to go fill in a know your customer form every couple of years.

    I will never do it.

    Real estate in India is way more riskier than stock market now. I am sure that the golden days are long gone. I know a lot of well placed people in IT industry and their are clear signs that the party is over.

  3. I think many are not realizing the fact that US is not just the only place to work after completing studies in US, there are some countries where you actually get more salary than you earn in US.

    I work UAE and did my masters from one of the IITs. My company is one of the richest oil companies in the world and I get paid with good salary (about 90k$). Best thing is that there is not tax on income here and they provide many other facilities such as housing, conveyance allowances etc. and even arrange pleasure trips to Europe and Asia. Back then, I used to think that jobs in US or UK are the best for working, learning and earning. But its not true. My expenses are also less public transport is very good. I never worried about food even though I am a strict vegetarian because there are plenty of Indian restaurants. I can have a good authentic south Indian meal for just 2-4$. Most importantly, I can plan a round trip to Indian within 300$-500$ budget. In fact, I can even afford to go to India every month and is much convenient than travelling from Banglore to my home town by train.

    I am satisfied with my job profile. My company is also happy with my performance and willing to extend my contract. But I’ve decided to quit my job to study PhD in US. Some warned me that I might not get this salary even after doing PhD in US. But US is not the only the place in the whole world to earn. There are whole lot of jobs available for skilled people around the world. You just need to be good in your field. I do not rate US as the best place to work but definitely it is a wonderful place to learn. A US degree is the most accepted and valued around the world. I suggest one to study in US in a good university and consider working in not only the US but in other countries as well.

    1. Combination of work experience, IIT degree, Ph.D. from US will always work. In your case, you can return to India (IIT will help you in industry jobs, Ph.D. for teaching and Gulf experience will again get you job in Gulf countries). But most of the students coming to USA are without work experience and do not have label of IIT. so they have to think about return on investment and savings.

  4. Hi Raghu,
    I would like to know that what would be the situation if one becomes citizen of usa after master?
    Will that improve savings?

  5. I finished my Master’s in the US 3 years ago, worked for a company there for 2 years and then did a intra-company transfer to their office in Zurich, Switzerland. best decision of my life. Zurich has very few people, salaries are very high (so are costs though) and it is much closer to India than anywhere in the US. Granted i speak almost 0 German, but I am saving quite a bit compared to what I would be getting in the US. My folks are also happy because I am not SO far from them. Not to mention world-class infrastructure (better than USA, in my opinion). So, I can say, USA is not the only option for the “American Dream” and to live a comfy life with saving.

  6. Money Money Money !!!! Interesting talk….

    The clever way to save more money is to get into a good job rather than reducing expenses. There is no difference between getting a good job in US and India. If you have the talents to get a job for 10 – 15 lakhs/year in India, then you can get a job for 120K – 150K in US, period. If you try to put the math that can save more by getting the job of same standard (that 5 lakh/year in India) in US, trust me, its not gonna work. If you lead the life of an American Dream, then you ll save the same (real purchasing value, don’t confuse with exchange rates) as you saved in India. I see many Indians, in US, who never go out, never spends and ends up their life in saving money. If you go in this direction, you ll eventually have no life when u look back 10 years down the lane…

    So the moral, study well in US and get into a good job through hard work. Don’t try the shortcut, with an intent, MS can make 5 times the money as in India. It just won’t work, trust me… and if someone says it worked, then he/she would have lost the work life balance.

  7. Hey guys thanks for sharing your experiences.
    It was really informative.

  8. I have almost 5 years of experience in IT in India and I am planning to apply for Fall 2014. I am already married. My plan is to first finish my studies and get a good job. Then I would like to call my wife to US who is also working in IT in India. I want her to do MS but It seems quite probable that I would not be able to afford her studies with my student loan,

    Considering my situation above how do you suggest should I plan my foray into the US? Also, if I am not able to afford her studies, is it possible to search a job for my wife in the US?

    Please note that I would like to Sign up for the job search Boot Camp as well.

  9. 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 or at

    1. I approved your comment. Let me check in the trash folder.

  10. i think internships during college can be utilized efficiently to manage and mitigate expenses

  11. I would like to join for the job search boot camp as mentioned in this video . Thanks.

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