I was 25 years old when I immigrated to the U.S. right out of my parent's house in India. I did not know anything about the US economic or social culture. All my impressions were from movies and TV, like my favorites Friends and Sex and the City (where older episodes were being played on Indian TV). I was scared but excited.
India has a very different economic and social culture where women who are in their mid-20s but still have a teenager mindset aren't expected to be financially independent. That's especially true for newly minted doctors from middle-class service families like myself who are expected to “just study” as their full-time job. I had never had to pay for anything other than the gas in my car (it was actually my father’s car, a Maruti Esteem that is similar to a Toyota Corolla), and my meager resident salary in Indian rupees (INR) was my pocket money.
That significantly changed as I got ready to move to the US. The financial investment of about $18,000 over a span of one to two years (for my USMLE preparation and exams, my travel and boarding within the US, my international travel, my US residency applications, and the rooming and food in the first month of residency) was borne by my parents as a gift (not a loan—again more common in Indian culture). As my parents were about to retire as government-employed senior physicians, their combined monthly household income was 100,000 INR ($1,333) and they tapped into their retirement (not pension) to settle their three adult children.
For further context, a fresh graduate immigrating from India who is applying for US residencies in 2022 is spending $8,000-$9,000—about half of my upper-middle-class parents' average household income at the peak of their federal government careers—on externship/board exam preparation fees and residency application fees. That doesn't include international/domestic travel and boarding/meals. That graduate will be taking a loan in India for this. Anyone who pursues an MPH or other advanced degree in the US prior to residency adds another $70,000 to their investment.
A medical school graduate from India who spent a year and a half in Canada prior to obtaining a medical residency in the US told me it took an investment of $15,000-$25,000 a number of years ago. Here's how it broke down:
- External rotation (externship): $1,500
- USMLE 1/2/3: ~$1100 * 3 = $3,300
- Boarding/food: $1,800-$2,000 per month while living in the US
- Travel from India roundtrip: $700-$1,000
- Travel within the US: ~ $400 per flight
- UWORLD exam preparation: $300-$900
- Residency applications: $1,330
For whatever reasons that a medical school graduate from non-US countries decides to do a residency in America, it helps to provide a roadmap of the new “financial residency” that starts within that first week, the first month, and the first year of landing in the US.
The following is a survive/thrive guide when an International Medical Graduate (IMG) has been lucky enough to procure a residency spot and start their career. Keep in mind: these are the steps I took and what most IMG who have no base or contacts in the US will have to do.
What to Do in the First Week in America
The first week in the US as a new employee immigrating from overseas is like being a newborn baby.
#1 Get a Social Security Number
You'll need a Social Security number before anything else. Google your nearest Social Security office and take an Uber or request a ride there with the required documents.
#2 Get a Bank Account
You will usually need your employment contract and a rental lease in addition to a passport and other required documents to open a bank account. This will get you a debit card for going cashless since it could be unsafe to carry more than $20 in your pocket when returning late at night from your residency rotation. You will likely not be issued a credit card right away since you have zero credit history—a way for US businesses to determine if you can be trusted to borrow from them.
Start working on building your credit history in your first week by getting a credit card from the local grocery store, Macy’s, Express, or whoever will give you one. Use that credit card to pay for your expenses and then make on-time paid-in-full payments each month to help you build your credit score.
#3 Rent an Apartment
This can be done online prior to your arrival in the US, via video touring (in my experience, people here will usually deliver what they have promised). Don't let the rent be more than 20%-30% of your take-home monthly pay. Be ready with cash to pay for two months' rent in advance and/or a hefty security deposit, and choose an apartment in the usual resident-friendly complexes near your place of work. Some people will choose to share an apartment for the first few months or a year—it’s a personal decision. The rental leases are usually six months to one year long, and although you can leave a lease earlier than that via subletting, you definitely don't want to break a rental contract.
#4 Find Transportation
You might need to take an Uber everywhere, which would be expensive, or schedule errands according to your benefactor’s schedule (if you happen to have a benefactor). You’ll need to buy groceries and some basic furniture and utensils (or request some from a nearby church or place of worship). How to find a ride? Use your network of fellow IMG residents or US-born residents who already have a car and who have the same rotation as you.
#5 Buy a Phone
I don’t remember this being an issue for me at all. I got my first Apple phone in 2008 here in the US on a monthly payment plan.
For peace of mind, I suggest foregoing the mental math of converting everything from US dollars to INR. I remember my first lunch of a single piece of pizza for $7 from the nearest walkable grocery store. It freaked me out how expensive the US was and how I was burning through my parent’s money and the $1,300 stash they’d given me to live on until I received my monthly resident salary of about $3,500. I was happy that my future husband would be visiting me soon (via a Greyhound bus ride from Philadelphia to Buffalo) to help me “settle in.”
My future husband didn’t even have a residency job or any kind of US salary (and was on a similar parental grant like me). But we shared our first lunch on a newspaper spread out on the carpet of my newly rented apartment.
Many IMGs have similar experiences when they first land in the US to start their new job. Most feel extremely blessed to have a job and hope that they can live their purpose and pay off their family's investment in them.
What to Do in the First Month
Now that you're beginning to get settled into your new life, here are some next steps.
#1 Learn to Drive
I went to driving school to learn how to drive in the US and then got a learner's permit.
#2 Buy a Car
Buying a car was something that I would do differently. I bought a new Toyota Camry at a high-interest rate and paid more than $1,000 per month in car insurance due to lack of credit and driving history. Many car dealers will require a cosigner on your loan—someone who can guarantee that they’ll pay it off if you can't. Getting a cosigner in a new land where the only people you know are new immigrants like yourself is a difficult and undesirable task. It was a favor that I didn’t want to ask of anybody at the time.
How do you find a cosigner? You can mine your parent’s network for an established responsible adult who has a good credit score. I bought a new car in 2007 because my Indian mindset was one of suspicion for used vehicles. In India, you rarely receive what you pay for if it is second-hand. But preowned/certified vehicles in the US are very reliable and are available at a much cheaper purchase price.
Out of all these tasks, it's most important to arrange to buy a car, because it’s hard to find an Uber at 5 a.m. when you need to be at work at 5:30 and you’re still converting the car fare in US dollars to Indian rupees.
#3 Set Up Your Utilities and Decide on Your Benefits
You will NOT get time off from your residency schedule to attend to matters of life, like setting up a Social Security number, getting a driver's license, setting up your utility bills and bank accounts, or arranging to be available for your internet installation appointment.
Even if you’re a 25-year-old woman who had not left her parent’s home before starting her residency, you don’t want to bring your parent to “settle” you in. That will cost even more money to your parent, who will be as immobile and unknowing of how life works in America as you. Add on top of that a new healthcare system, a new country’s culture, and, of course, the new residency.
How to set up your accounts: once you have internet and an apartment, this is easy (you can set up services using your laptop).
During orientation, graduate medical education (GME) had me choose my benefits—life insurance, disability insurance, medical insurance, etc. If you’re like I was when I first came here, you may be clueless about U.S.-based benefits, as you might’ve only heard about Indian-based provident funds, LIC, and LTC/Travel benefits from your parents. For more information, here is the American Medical Association's IMG toolkit.
What to Do in the First Year to Thrive
Now that the first week and first month are behind you and you’ve settled in, how can you start securing your financial future? Remember, your monthly US resident salary could be less than that of an average middle-class American ($40,000-$120,000 per year) but more than a surgeon in private practice in India who is 10 years out of their surgery residency.
The following information pertains to those FMGs on a work visa, their dependents (for immigration purposes), and those who don't plan to leave the US before the age of 59.5. Investing in tax-advantaged accounts for non-US citizens is a useful guide if one is undecided about staying in the US long-term.
#1 Understanding Your Salary and Benefits in Your Employment Agreement
This is a sample contract from my residency program. I don’t recall reading or understanding it except for the H1B visa clause. All other benefits are insurance premiums or, as I like to think of it, the rent you pay to wear an invisible protective coat against malpractice lawsuits, disability (interestingly, it is pretty useless for visa holders), health expenditures, etc.
An HSA has a way to build wealth, but the FSA does not and is use-it-or-lose-it pre-tax money set aside for known (usually) health expenditures—it may make more sense for those IMGs arriving with their dependents to look into this.
If you are comparing salaries when choosing your residency program, remember that the salary schedule and the dollar value of this invisible protective umbrella of benefits is your total compensation. My main criteria for choosing my program was that it would offer me a pre-match (sure-shot offer of employment), that it had all fellowships available, and that, at that time, was sponsoring H-1B visas (some only offer J-1 visas, while some offer green card sponsorships during residency).
#2 Roth IRA and Spousal Roth IRAs
#3 Look Into Getting a Money Match Via Your Residency's 401(k) or 403(b)
If your residency offers a money match, it's a part of your salary and should not be left on the table for the employer. It is a way for the employer to retain you. For example, if the residency says it'll match you dollar for dollar after year 1, it's really wanting you to stay into year 2 to claim your money match. Another pointer here is not to frontload your 401(k)/403(b) in the first few months. More information on this here.
#4 Tax Breaks for Medical Residents
Some of these tax breaks for residents do NOT apply to non-US residents. I still paid H&R Block in those days to do my taxes while my engineer sister who moved to the US in 2015 has always done hers through Turbo Tax by herself. Don’t worry, though. In their income bracket, medical residents oftentimes will get a tax refund.
#5 Repaying Your Family’s Investment
If you’re like many immigrants, you’re probably sending a sizeable chunk of money back home to help family and friends. This is a personal decision. The money you send back now is not growing (via investing) for a future life event of that family member you’re trying to help now.
#6 Children’s Funds
If you have children, you can open a 529 college savings account that can only be used for qualified educational expenses or a UTMA (owned by the parent until the child is an adult and usable on anything) for them from the money gifted to them by your family and friends. This was also a somewhat helpful survival guide for those moving from India to the US.
#7 Non-Qualified IRA
If you magically still have some cash left over, you can invest in the US financial markets by opening a taxable brokerage account at Vanguard. Just try not to let cash sit in a bank account earning <1% interest.
#8 Emergency Fund
Try to keep up to six months of expense in your bank account before investing elsewhere.
If you're moving to the US from India, this was also a somewhat helpful survival guide.
As for me, I survived by trial and error (like all humans do). My financial journey was limited to the tactics I’ve enumerated in the first week and first month up until a year ago. I wish I’d understood the action items in the first-year section so that I could’ve started building wealth from year one instead of feeling like I had to trade my time for money this whole time. But then again, “better late than never.”
A major decision that held me back was whether I wanted to stay in the US or return to India and how different the wealth-building paths would be. I hope this column will help all those who are thinking about migrating to the US or those who have been here for many years. I hope it will also help the medical residency stakeholders understand what a newborn-like foreign medical graduate is undergoing on day one of their new job. And I hope you remember that a little kindness goes a long way in impacting these promising individuals.
If you're an IMG, did you follow a similar path to find your financial footing in a new country? What are the best decisions you made? Is there anything you regret? Comment below!