USA: Saving Money vs American Dream

American Dream – The term “American Dream” is used in a number of ways, but essentially the American Dream is an idea which suggests that all people can succeed through hard work, and that all people have the potential to live happy, successful lives. But, these days American Dream refers to driving luxury car, financial freedom and home ownership.

We have discussed variety of topics in the blog, but haven’t spent much time about saving money in USA, cost of living and salary or if you can save money at all?

Savings in Wisconsin

I just want to give some information about budgeting the expenses. Many folks in India who read this blog would get an idea about life of a service professional in general in the United States.

I think you can save lot more than 25% of your salary provided you live in mediocre cities like St. Louis, MO., Cleavland, OH, Milwaukee, WI. I am a PhD student and I make lot lees than an average professional on H1B visa could make. But still I can save more than 50% of my earnings.

I do not have any educational loan or credit card loans. I am about to buy a used car from my savings Life in the United states is tempting but the expenses are not insanely bad.

The advantage of living in mid-size cities is that you earn more but you spend very little. In suburban areas an apartment could cost $500-$550 per month.

If somebody on H1B is able to make $5000 per month , imagine how much money he would be able to save. Car is not an issue at all. You can buy a new car with installment plan for as low as $300/ month. But if you live in big cities such as New YOrk City, Chicago, Los Angeles, You have to make a lot of money cause the rent itself would eat 30% of your salary and everything else would be expensive such as food, entertainment.

You have to pay a lot on parking in bigger cities. But you tend to get more pay in bigger cities.($60,000 to $80,000 per anum) But on average its best to live in middle size cities as I mentioned above. This is Ron from the University of Wisconsin.?

Salary in California

Sam – I got an H1B approval. I’m getting a salary offer of 53K-based out of CA. Would like to know whether it will be feasible to survive on the same post taxes(single) and how much I might end up saving.I’m in serious doubt now whether to move or not.

Sateesh – 53K in california is like a dead salary. If you are a bachelor you can survive , but if you are traveling with family it will be futile. imagine rent will be around 1400$ per month+ insurance for car if you buy will come to 120$, groceries will cost 1000$ per month, so it will be basically tight to maintain your savings.

True Savings

Saving money is completely depended on your spending habits, where you live and salary. If you are single and making 53k in California (Silicon Valley), then after taxes, you will have just enough money for day to day expense. If you share an apartment, you might be able to save little money.

If you are married and earn 53k in California, then it’s going to real hard to save any money or you can very well be underwater.

Savings and Budget

If you have to pay education loan, then you got to come up with a money saving budget. Well, its hard to create a budget and live within means when you just graduated and getting paid in $$.

If you want to live American Dream  then you got  to plan your lifestyle trying to achieve that dream. Its very easy to get car loan for a luxury car, but only you can decide if you can afforf to make the payments on expensive car.

You might be able to pay $700 per month on car loan for a BMW that costs $35,000 when you are single. If you plan to get married, will you be able to afford to pay $700?

When you make big finance decisions, always play it safe and stay low. Don’t buy something that you cannot afford.

What Would You do?

For example, you recently completed your Masters degree with $30,000 in Education Loan. Your first job pays around $50,000 per year before taxes. You are planning to buy an Luxury 2 Door Sports Car. Your ask your friends for advise about spending $35,000 on a 2 door car.

Friend 1 – You already have to pay $30,000 in loan, it can take 3 to 5 years to pay that loan. Don’t spend another 35k on car. Spend 8k to 10k that you can pay off soon. Since Education Loan interest rate in India is very high.

Friend 2 – This is the time to enjoy the life. Don’t worry about the loan, go for a luxury car.

What would you do? Which advise would you take?


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  1. i would say we Indians have inherited from our parents to wisely use money….i don’t see much bankrupt people in india as i heard of the same in states…..people have mentioned 52k$in NY…yeah its neither less nor more….you can just survive with the same and can save a bit….but finally its up to you….
    I am confident our indian people have a great sense of managing fiances whatever the conditions are…..

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  3. I Am being offered $52000 per year by my employers in New york. Can anybody tell me whether that is sufficient amount of money to begin with.

    Place of Work- NY city.

    Kindly advice.


  4. I posted a comment here yesterday which strangely seems to have disappeared. Did HSB delete it or it never got post?? I am sure I saw my Post here yesterday..

    1. Your comment is the topic for next blog post. Thats why its not yet approved 🙂 did you see the today morning email? It has your name on it.

      1. I just did. Thank you for that. If you need anymore inputs or research from my side on that post do let me know. I would be more than happy to be of assisstance.

  5. I dont know about United States but lets compare the BIG CITY and SMALL CITY concept in INDIA:

    Out of MY EXPERIENCE: Born and brought up in XXXXX. Completed my BE here. In XXXXX I was initially (in 2008 i.e.) offered a salary of 9,000 INR (We Environmental Enggs dont get paid much). I could live like a king with that pay here. But, the exposure and competition would be limited. Companies dont OPERATE from these smaller cities. Decisions are not taken here. You want to play it big, you want to get noticed you have to be in the face of people who are running the horses.

    So I choose MUMBAI. The CITY. The pay was not that great. Started off at just 11,500 INR. Life was frustrating. Hard to make ends meet in this city with that pay, keeping in mind that corporate jobs do eat up a chunk of your money because of the upkeed required. But exposure was magnificent. Bigger projects, you get to meet great people (the things you learn from personal people experience is incredible), you are their were decisions are made, you are the face and not just an email account. No doubt takes a lot time and effort but it pays off with time. By the end of my two years my salary was 250% of what I was making initially. Built great contacts.

    I personally believe that in the intial stages of our careers we have to choose the big cities (not applicable to all proffessions but most) because that is where the companies set up their head quarters, that is where the chaos happens. No doubt its frustrating at first but if you can crack the ice their then theirs no turning back. I mean you get to work more and your efforts are seen and the more you work the more you get paid (atleast thats what I hear happens in US).

    Ok, another example, we all know that Marc "FaceBook" zuckerberg also was asked to move to CALIFORNIA to get into the action. I do believe that pertaining to where you want to head in your career choose your city. The money will come, provided that your good and love to put yourself outside your comfort zones.

    P.S: I still love my home town.

    Your views and experiences please.

  6. INDIA a very weird nation.where you could get a car loan at 7-8% interest rate and education loan at 12-13%.many students under BPL category are struggling to get an education loan and continue their study.DAMN!!!!!! the bloody bankers…SBI=

    1. when there is very little chance of getting good job after doing MS in USA, why do you want to take loan? how will you repay Bank loan?

  7. friend 1 is right. u can enjoy life after repaying the 30k educational loan. u will go broke and in debt if you listen to friend 2

  8. Hi ,

    I heard that the job opportunities in USA is very less, is that true. I gonna spend lakhs for my studies and i am afraid that i wouldn't able to pay back my loan.

    Thank you

  9. HI HSB

    Very good post..Can u suggest some ways to save taxes in the US? Is there a way where in we take LIC policies and save in India.?

  10. Good post HSB. As in my case, I would go with the opinion of the first friend. If in case I go with the option of the second friend then I may end up in debts. Then again borrowing from a friend(Probably the same friend who suggested to buy a car!) which would make my life more miserable. Credit history will be down and everything. 😀 So choose wisely.

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