How Indian IT professionals in the US manage their finances

Like Yellapu, most Indians tend to convert foreign currency-denominated numbers to Indian rupees using the prevailing exchange rate. But there is an inherent flaw in converting any income/expense directly with the exchange rate as the cost of living in both countries could differ significantly.

For example, a $ 100,000 salary in the US may support a lifestyle akin to what India offers for just ₹23.14 lakh (as per the purchasing power parity (PPP conversion factor). This is because the cost of living in India is comparatively lower to that in the US. For the uninitiated, PPP allows for comparing standards of living between countries.

Mint spoke to four Indian IT professionals living in the US about how they manage their finances there

View Full Image

Sai Kiran, Texas

Kiran (34), who has been living in the US for more than a decade, realized long back that converting every expense to rupees doesn’t make sense. He, however, acknowledges that cars are much cheaper in the US.

Kiran, a car enthusiast, says, “a high-end car priced at ₹75 -80 lakh in India would cost $50,000 -60,000 in the US. Purchasing that car on loan in India and paying monthly installments on that would eat up a significant part of one’s paycheck. But in the US, I can keep the monthly EMI under 10% of my take-home salary. Besides, this doesn’t impact my other financial goals, especially my children’s studies. All public schools in the US offer free education.”

Kiran knows how to manage his personal finances and save on costs. Since labour charges are too high in the US, he and his wife share the daily chores. “My parents staying in India pay just ₹3,000 to a helper who takes care of the house and does the dishes. But, in the US, a housekeeper gets paid about $30-40 for just two hours per day. I don’t want to spend so much,” says Kiran

Bala Manohar, Maryland

Bala Manohar (33), who moved to the US around eight years ago, says he is financially secure now when it comes to necessities and comforts. Even before Manohar shifted to the US, he was aware of how currency conversions work.

He intends to stay in the US only to make enough savings before returning to India, and lead a better lifestyle. The real benefit of the exchange rate comes into the picture when dollar savings are spent or invested in India.

He said he was able to purchase his dream property in Hyderabad a few years ago. He is also happy that he is able to donate to those in need without any financial constraints.

Manohar said his peers in the IT industry are now financially better placed compared to most software engineers in the US. “In India, things have changed drastically for IT employees during and after the pandemic. A lot of my colleagues, who for some reason, couldn’t get off-shore placement offers earlier and switched jobs during the pandemic period are now settled with an average salary of ₹40 lakh per annum. There’s a sudden rise of 80-100% in salaries offered in India and that’s a huge improvement. But, the pandemic has not had much of an impact on salaries in the US. Earning ₹40 lakh per annum in a metro like Hyderabad is equal to a $100,000 package in New York City,” said Manohar, a resident of Maryland.

He, however, mentioned that this equation could change in the case of a married couple in the US if both of them earn in US currency. “Due to shared costs, there will be a higher scope for saving which will translate to an even higher amount when converted to Indian currency,” he added.

Saketh Varma, Tennessee

For Saketh Varma (30), living in the US is more about having an international experience and the value it adds to his career. Varma first visited the US to pursue a master’s degree in 2015.

“Any new technology usually gets adopted in the US first. Staying here gives us a chance to learn these new technologies before the world catches up. That would help in having better opportunities to grow. Thus, from a technological point of view, the US is the best place to be in. I also like the diversity this place offers in the workspace. I get to work with colleagues who are from various parts of the world.”

View Full Image

Varma said, “Once we start working here, we usually realize that it’s not just about finances but also the opportunities the country provides. And one of the good things that I find here is the work-life balance”

Like many others, Varma also first focused on repaying the loans he had taken earlier after joining his first job.

His wife Sindhuja Jagarapu joined him recently in the US ona dependent visa. She said, “It may take a lot of time for dependants to get approval to work in the US. This is frustrating, particularly if you are qualified enough for a job but hindered by visa issues.” For the couple, the focus is now on expediting her work visa process.

Uma Shankar, Texas

Uma Shankar (30) had for long dreamt of moving to the US and his wish was fulfilled less than a year ago.

Shankar, who sets aside 40% of his income as savings, strongly believes that his salary, in dollar terms, is much higher than what he earned in India in the similar role. “I am able to save a decent amount now despite the higher costs. I don’t know if this will change once I start to have commitments here,” he said.

Shankar is trying to come to grips with financial matters and is learning it all by himself. “I don’t think anybody here is so social as to teach you the financial aspects. I am learning on the go.”

Shankar is very serious towards building a good credit score after learning that it is linked to his social security number (a numerical identifier issued to residents in the US), which has to be submitted for almost all transactions, including leasing a home, buying a car, etc.