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Tuesday, June 10, 2014

How Much Money Would An Indian IT Professional Save In USA?

Most Indian IT Professionals ask this question:

How much will I save once I go Onsite(specifically San Jose, California, USA)?

Making an attempt to answer this million dollar question :

Lets do the math:

For the sake of calculation let us assume you will earn $72,000 per year, that is, $6000 per month at Onsite.
Deduct 36% per month for tax, that is, $6000-$2160=$3840. This is your take home salary per month.

Now, the approximate monthly expenses in usa for indian family:

  1. Approx $1700 (EDIT: $2200 as of December 2014) per month for house renting 1 BR apartment (this may vary from $1600 to $2200 based on location and community, we will consider $1900 for the sake of our calculations)
  2. Approx. $60 per family member for medical insurance. Assuming you are single, expense is $60 per month.
  3. Approx. $250 per month for grocery.(For a single person this will be much less)
  4. Approx. $40 per month for internet.
  5. Approx. $40 per month for Vonage(landline for India calling).
  6. Approx. $60 per month for mobile expenses (this may vary from $40 to $80 based on your plan and data usage).
  7. Approx. $90 per month for car insurance(this may vary based on driving experience).
  8. Approx. $50 per month for electricity.
  9. Approx. $50 per month for additional charges related to apartment water, sewer, garbage.
  10. Approx. $20 per month for apartment insurance.
  11. Approx. $200 for gas(fuel) spend in case you own and use a car.

So, total monthly expenses are approx. $2760.

Note : If you are staying in a shared accommodation then most expenses will be shared and savings will be much higher.

Now, deduct your expenses from your in hand salary to arrive at your savings $3840-$2760= $1080.

Considering exchange transfer rate of $1=Rs 60.

$1080*60=Rs 64,800.

Now compare it with your India take home salary minus your monthly expenses and you will get a fair idea of how much you will save at Onsite.

Please note, this is just an example only for San Jose, California and actual figures may vary from state to state, city to city and person to person based on actual salary.

The intention of providing these details is to give a fair idea of expenses/ savings. It may not be accurate. In general, on the monetary front you will always benefit by going to USA. Also, there are several lifestyle aspects that one needs to consider before making any decision.

Hope this helps.

Tip: If you need to know how to save money in usa, you can explore the various deals that are offered from time to time on Thanksgiving, Christmas etc. You can also use groupon for group deals, here is the link: Groupon SF BayArea Deals 

EDITS(based on the comments received based from readers):

  1. Medical and dental Insurance may cost more based on the plans provided by employers.
  2. If you buy a car. You need to include the EMI.
  3. Grocery expenses depend on your eating habits.
  4. Travel to India for two atleast once per year needs to be considered. VISA renewal cost once per every three year needs to be considered as well.
  5. Eat outs, clothes, trips, house hold items, and many more things which come up in normal living needs to be considered.
  6. Based on the tax saving options your chose and the investments made, you will be able to save tax and get refunds at the end of the year

Watch the Video Blog Here

Compare USA savings with savings in Singapore: How Much MOney Can You Save In Singapore

Must Read for L1 Aspirants: L1B Visa Interview Experience 2016

Other popular blogs: How To Make Money Online?

Also read: USA Visa Basics L1A, L1B, H1B Visa Rules and if you are working for an IT Services Company like Infosys, TCS, Wipro then you may want to read How To Go Onsite?

In 2016: H-1B and L-1 Visa Processing Fees Increases by $4000 and $4500 respectively

Bonus: If you are interested in getting better at setting goals you may want to read this recommended book for setting high goals...

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