> Eat Ramen, coupons, live like a begger, and save up 1 year of income.
It's unsexy, but one doesn't have to live in the hottest part of town, or go to the newest restaurants every weekend.
But the problem is that people are to led to believe that programming == tech money == big living, when it's really decent middle-class living which means one should still budget, which may mean not keeping up with the Joneses.
That being said, 50% is really a stretch these days. 25% would be more realistic for most yuppies in America, and 33% for those more financial prudent.
I'd call the lifestyle by most new grads in San Francisco to be on par with the middle-class lifestyle. I think your percentages are way off but the gross dollar values are acceptable when compared to other U.S. locales.
Most new grads in San Francisco are likely eating up most of their income on taxes, rent, and repayment of student loans. After contributing the maximum of $18k to their retirement plan and some modest savings, they likely have enough for one night out per week.
100000 - 18000 # starting salary minus retirement contribution
=82000
82000 * 0.39 # tax before tax refund
=31980
82000 - 31980 # salary after taxes and retirement
=50020
1200 * 12 # annual rent for a bedroom in a shared house in untrendy area
# this $1200 figure is from other posters in this thread
# and an cursory look through craigslist
=14400
50020 - 14400 # disposable income minus rent
=35620
500 * 12 # annual student loan payment for $50k, 120 month loan
= 6000
35620 - 6000
=29620
29620 / 12 # remaining income per month
= 2468
$2468 per month to save, spend on food, transportation, et cetera is pretty damn good. I think it leaves about $1000 per month for savings, considering groceries, utilities, recreation, transportation, and miscellaneous expenses.
10% savings sounds bad but the dollar amount is not too terrible. I'm assuming the retirement savings weren't part of the equation, since they can't be readily used for support during unemployment. Overall, the San Francisco Bay Area is not a good place to save money. I think the financially prudent step is to not move to it.
If anyone disagrees with my numbers, please speak up! I would love to be able to optimize my own spending or make suggestions to my new grad friends.
Great job with the break down--the numbers seem spot on. I just checked my spending for September and I spent $1600 for discretionary; and this was with larger family dinners where I paid, and also a weekend trip to LA with friends. I'm more on the frugal side, though.
In regards to the 10% vs 25%, I believe most guidelines account for retirement saving. So with your numbers, we'd be at 28% which isn't too shabby. But yeah, in terms of getting six months worth of savings..
We'd need 12 months, which isn't unrealistic either. I figured one can easily live on $1200 for discretionary when unemployed. $300 for utilities, $600 for food ($20/day), $300 for whatever else. Just can't be blogging from Sightglass every day.
For the first 2 years, live on 50% of your income. Eat Ramen, coupons, live like a begger, and save up 1 year of income.
Then divide that by 12 and use that as a salary for a year while collecting another year. Repeat. Steady income, always a year behind.
Of course this was back when I was trying to go into film. A bit more unstable than software development.