[ChuckMcM]

Did you miss the rent subsidy part? It was listed at $12K, so $1K/month. But lets step back from that for a moment.

$70K gross income. Lets say you put $2K into an IRA (no 401k) so $68K after that. Estimated federal tax is $10,592 [1], Another 6.2% goes to Social security so $4,340 [2], estimated state income tax (CA) is about $3,922 so rolling that up, $68K - $18,854 in taxes thats not quite $50K left over ($49,146) so that is about $4095 a month.

So if you're living on $4095 a month you're looking at spending $2K on a studio apartment [4] minus the rental subsidy of $1k making it $1k on the Apartment. Call it $500/month on food, $250 / month on subscription services (cable / phone / internet) and maybe $75 /month on rental insurance so maybe half your monthly on recurring costs. Leaving you $2K/month for dynamic costs. If you don't own a car (and I wouldn't recommend it) then you're basically able to move what is left around for things like the occasional furniture or clothing purchase. Going out to eat occasionally and saving for a rainy day. It should be possible to put away $500/month of that into savings on typical month.

The bottom line is I don't see $70K/month as 'pretty tough' :-) but I can certainly see it not giving you a luxurious lifestyle.

[1] http://www.calcxml.com/calculators/federal-income-tax-estima...

[2] https://www.socialsecurity.gov/OACT/COLA/cbb.html#Series

[3] https://www.ftb.ca.gov/forms/2012_California_Tax_Rates_and_E...

[4] http://www.mynewplace.com/city/san-francisco-apartments-for-...

[peacemaker]

Honestly, I missed the rent subsidy part which makes it a bit easier. Still, thanks for the breakdown! I guess I waste a lot of money or something because I somehow manage to spend a lot more here! Although saying that, I prefer to put a lot more away towards savings and retirement and like to travel a lot too.

[ChuckMcM]

This.

Frictionless spending is your enemy. Oh that is a great book, click click click, $10 just whooshed out of your wallet into your kindle. There are so many good movies out this summer, blam blam blam another $50 - $60 GONE. Oh god I can't start my day without some caffiene pick up a vente latte half and half for me would you? Another $6 gone. It goes on and on. And it adds up.

[peacemaker]

I've gotten more careful with this since moving here because you're right, it can disappear so quickly. It's especially bad at my workplace because everyone goes to lunch together every day and that'll set you back $7-10 a day easily.

I started using mint.com to track my spending and the main issue in SF is rent. Followed closely by food costs. I was living in the mid-west briefly, earning only a few $K less than here yet saved so much more money and never had to worry about the minor spending adding up.

[encoderer]

While I agree with your sentiment about frugal living, in the spirit of being realitic, $500 a month for food is awfully low.

At 3 meals a day, that's $5 a meal.

No easy feat unless you go for processed, preserved and packaged, which is hardly a good way to live and eat.

[ChuckMcM]

Actually for one person $500/month is pretty generous if you don't go out to eat, fortunately I think we can get really really good data here since Safeway [1] lets you browse their products online. I typed in the zip code for Redwood City where they deliver (94065) that gave me access to their products and prices and then put together a shopping list that would provide 3 meals a day for me for approximately 30 days [2]. I didn't use any coupons or sale items, I included eating steak as well as chicken, but I do assume that cooking a whole chicken would equate to the meat item for three meals, the initial one, the left over one, and then perhaps any remaining chicken chopped up and put into a salad. I included condiments although generally you won't use all of a condiment 'unit' in a month, and I included a 5 dollar allotment for 'spices' since you buy one thing of salt (0.99) and it lasts you for 6 months.

You can see that for breakfast I'm eating either cereal, eggs, or maybe pancakes, for lunch its generally sandwiches with soup and a salad, and for dinners its a meat (chicken or beef) a vegetable, and a starch (either rice or potatoes). I didn't go 'all organic' or anything which could raise your prices. I also included a half gallon of ben & jerry's ice cream, tea as the 'non water' beverage, and Oreos (my all time favorite cookie). All totaled its $443. Under my $500 budget.

[1] http://www.safeway.com/IFL/Grocery/Home

[2] https://docs.google.com/spreadsheet/ccc?key=0Atwe7dq6iPQHdDU...

[encoderer]

Clearly you spent some time on that in the interest of a good discussion so that's fantastic and helpful. It's eye openening to see what some people consider normal costs. For example, I couldn't imagine spending just $5 on EVOO. Even the cheap-but-good labels are more than twice that.

But the spirit of my comment comes from this:

After years of trying, I finally learned how to budget when I was about 25. One of the most important lessons I learned then is that budgets are often a time when people imagine the life they want and try to prescribe it to themselves instead of taking an honest look at the reality of their behavior.

While you included steak and chicken, you didn't include any higher-end proteins (including good steak), nor any luxury items at all really. Nor, of course, any dining. And while it's possible that a person can live to your budget quite happily, it is, I think, more likely that the budget as-is wouldn't be followed. That developer, whose friends easily make in the $120-150k range in SF, are going to want to go to dinner with them. To meet them for lunch. To have a dinner party.

Sure, there are exceptions. But I'm interested in the mean. What do you think?

[ChuckMcM]

"After years of trying, I finally learned how to budget when I was about 25. One of the most important lessons I learned then is that budgets are often a time when people imagine the life they want and try to prescribe it to themselves instead of taking an honest look at the reality of their behavior."

Excellent. There are two parts to budgeting, you mention the first one which is understanding where your money is going, the second part is prioritizing where your money should be going. Part of the latter is understanding what is (and what is not) withing your means.

So if you are making $70K and you're hanging out socially with people making twice that, you are going to be at a disadvantage in 'expensive' activities. Someone with $100K in income which is taking home over $1K/month more than you after taxes, might decide they are going to spend $500 a month on track time at the local race track (driving fast is very fun of course) that is way too expensive for someone who is only making $70K. As a person budgeting you always ask "Is this valuable, or is it expensive?" [1] understanding the difference can really help clarify what you want to spend money on.

But lets think about the social aspects for a minute. Young people especially (although it is present across age groups) have a tendency to 'brag' either subtly or not so subtly using money. Called 'conspicuous consumption' back in the day, you can recognize these people right away, they always have the latest tech gadget, or a car that is less than 2 yrs old, or this seasons fashion accessories, etc. Why they are like that varies but how it affects you the $70K earner, and more importantly your budget, is key. You have to resist giving into that way of validating yourself and your friendships and instead actively pursue other paths. So if you're budget is being warped by those kinds of influences you might seek out ways to avoid them. It is tough since nobody likes to say "I can't afford to do that stuff that you are doing every day" even when its the truth. However good friends will figure it out and adapt.

Under no circumstances pretend you are something you aren't, I knew a guy in the dot com days who was pretending to be a lot more well off than he was in order to 'hang out' with some actually wealthy people. He got the bar tab once at one of their events, it was a bit over $12,000. He had to call AmEx to get them to approve it. I personally would not think the access was worth that sort of shock to the budget but recognize different people value different things way more differently than I.

[1] One of the engineers here at the office who has a background in economics introduced me to that phrase and it really captures the essence of budget prioritization.

[nicolethenerd]

Where do you live?!?!

I spend around $200/mo on food, $250 tops, in Manhattan. Mostly yummy healthy stuff from Trader Joe's.

Or did you mean $500/mo for two people?

[jwoah12]

That's about $8/day. I probably spend close to 10x that on food living in Manhattan. Granted I go out a lot and that's including drinks at dinner, but even not going out to eat at all and fasting every other day I have no idea how I'd only spend that much.

[mjn]

I can see it if you go out a lot, but for groceries it's fairly hard for me to spend more than $200/mo. I don't have a car, so just physically carrying $500/mo of groceries to my apartment would be quite an effort! I can't imagine how I'd do that unless I bought mainly stuff with a really high price:weight ratio, like steak or something, which I do occasionally, but don't eat as a staple food.

Today, for example, I carried what seemed like an uncomfortably heavy set of bags, yet it only came out to about $30, and will probably last me the rest of the week: 2 lbs pork tenderloin (2x $5), 5 lbs potatoes ($3), 2 lbs tomatoes ($4), 1 lb lentils ($3), 2 lbs onions ($2), 1 head broccoli ($1), 12x eggs ($3), 2 lbs nectarines ($3).

I think I more often run into the problem of buying way more than I can carry/eat, and it still doesn't cost much. I mean, I like nectarines, but 2 pounds of nectarines is a lot to finish before they get overripe, so some of that might get wasted. But since they cost me damn near nothing, that's alright.

[mkopinsky]

> Nectarines

Cook them! Throw them in a pot with some brown sugar and spices. Or throw it in a crockpot/baking dish with {1/2 c. butter, 3/4 c. flour, 3/4 c. (brown) sugar} sprinkled on top, bake, and shazzam! Cobbler!

[ChuckMcM]

+1 for Nectarine (or Apricot) cobbler.

[encoderer]

I feel comfortable, looking at average household food costs, in saying you're an outlier if it's "fairly hard" to spend more than $6.67 a day in the United States (let alone Manhattan) on groceries.

While the way we eat is certainly an outlier (and I know it), I'm equally as sure that you are too.

[jrockway]

I agree here. I get my meals for free and I still spend almost that much on edibles.

[xiaoma]

I live in San Francisco. I can go to any of the nearby markets in Chinatown and buy more produce than I could possibly eat in a day for under $10. I like to cook soup-based dishes which would be a pain to take to an office, but a sandwich and a piece of fruit is pretty doable. I believe my great grandfather did that for decades.

Honestly, I think going with what old people ate while you were a kid will be easier on the pocketbook and the health.

[usaar333]

Well, $500 a month is on the lower side if you eat out all the time (as I do) - with that behavior you'll tend tp hit $600 or $700/month.

On the bright side, $2,000 is really high for housing (want to easily cut $800+ off that? get some roommates), so the conclusion that living off 70k shouldn't be so bad (or even $60k!) stands.

[charliepark]

For one person? $500 should be fine. We feed our family of 5 on less than $800 a month, and we don't do anything processed/preserved/packaged. There are economies of scale at play, but home cooking for one doesn't need to be over $500 unless you want it to be.

[eurleif]

You could easily spend $5/meal eating rice and beans with some vegetables thrown in.

[refurb]

Really? The girlfriend and I shop at Costco, eat very healthy meals and it runs us about $400-500/month for the both of us.

Back when I was poor I could eat pretty healthy for about $150/month.

[codenerdz]

Its 2 people sharing an apartment(Im assuming from them being engaged), so that is easier). Also rental insurance is fraction of what you mentioned, especially if its part of your auto insurance coverage.

[Daniel_Newby]

The rent subsidy is ~$600/month after tax.

[wetzler]

Did not realize the tax implications of the proximate living bonus when doing the analysis, but found out later. Thanks for pointing it out.