Earn Less, Save More: Salary Expectations Abroad
One of the most commonly asked questions that we get is “why would I want to come and work in India for Rs. 30,000 a month when I can earn $50,000USD a year while living in the US? Rs. 30,000 is around $500, I could make that working at Mcdonalds.”
Now, what these people fail to consider when they ask this question is the cost of living differential between the US and India.
Although you might be making $50,000USD a year while living in the states, if you want to be living in a New York, San Francisco, Chicago or LA it COSTS $50,000 a year to live there..and that’s if you’re budgeting well. In most circumstances, it actually costs MORE than that if you want to be living in any of these cities.
I have friends who are living in NY and SF who go into a deficit every month and are actually SPENDING money just to live there and sustain themselves. At best, if you are working an entry level position in any of these cities you can expect to be breaking even at the end of the month (at least for the first few years while you are working). Most people don’t begin to actually start saving money until they have been working for around 3–5 years (at best…and that’s if you don’t have student loan debt).
While Rs. 30,000 might seem like it’s not much, it’s actually more than enough to live a comfortable lifestyle on a month to month basis here in India. The average cost of living in a place like Bangalore is around $500 USD/month. It will afford you the ability to have a nice apartment (typically costs around Rs. 10,000 ($160)), allow you to eat at nice restaurants, go out to nice clubs, and if you want, travel as well.
Will you be able to SAVE money? No, most likely not. But you will be able to break even while living a comfortable lifestyle. Making more than Rs. 30,000? You can use the excess to live a nicer lifestyle, or put that money in the bank to save for future travels and international adventures.
This is not only a common problem in India, but when working abroad in general. When people evaluate the opportunity to work abroad, they expect a salary that is on par with what they are making in their home country, without factoring in the cost of living of a country that they are moving to. They fail to realize that it’s more about cost of living and savings than it is about what you will make in total on paper.
This was hands down the most important lesson that I learned while living and working in South Korea; it’s not about what you MAKE on a month to month basis, it’s about what you can SAVE.
There, my salary was around $24,000 USD, which at the time of acceptance seemed absurd to most of my friends back home. Everyone said to me “You’re not doing it for the money, you’re doing it for the experience. It’s ok that you won’t make anything”. Little did they know I would actually make much MORE than most of my friends back home. Why? Because of the cost of living differential.
My average cost of living in a place like Seoul was around $1000USD/month. My salary was around $2000USD/month. This meant that I was able to SAVE around $1000 USD/month. At the end of the year I walked away with over $10,000USD in savings, and this was the same money that I used to pay for my Fellowship and then bootstrap BrainGain for the first year. I also got to travel to Thailand, Taiwan, and the Philippines while working there — not too shabby for a salary that was half of what most my friends were making in the US at that time.
Do you know what type of salary you would have to have in the US to be able to SAVE $10,000/year?! (Hint: you probably won’t make it at an entry level position)
For those who have student loan debt? Listen up.
We receive many applicants who have student loan debt, and immediately rule out the positions we have to offer due to the fact that they want to pay off their debt. While we understand and empathize, its frustrating because young professionals don’t realize that they most likely won’t be able to make a significant (or any) dent into their student loan debt for the first few years after school. They rule out opportunities that could be great for their future careers because they have unrealistic expectations for how much money they could save if they were to stay in their home country.
Moreover, international experience is continually more valuable to future employers, and showing that you were able to work in a foreign country, adapt, and execute to the fullest has the potential to earn you more on your future salary. I have one friend who once said to me “working abroad for the first few years of my career after school helped me to leapfrog those ‘awkward 20’s’ years when most of my friends weren’t really making any money and hated their jobs.” I have other friends who, upon their return from working abroad, got a very nice bump in salary and are now making more than their counterparts who stayed at home.
The fact remains that, regardless of where you live in the world, you will spend the first few years of your career breaking even or saving very little money. However when working internationally (specifically in emerging economies) your potential to save money is much higher due to lower costs of living. For example, we have a few placements currently working here who will be able to afford a 2–3 month backpacking trip throughout Southeast Asia when they finish their contracts — how many people do you know who can afford to do this after their first job straight out of school?
At the end of the day don’t rule out opportunities because you think you are being underpaid, when in reality you will still walk away with the same (or more!) savings at the end of the day. Take opportunities that are good for your career and will allow you to sustain your life. Money will always come if you build a valuable skill set and can make meaningful contributions to a growing enterprise…especially when you do this abroad 😉
Originally published at www.braingain.co.