What I make & what it costs me to live in the Bay Area as a Software Engineer
A dive into my actual take-home pay and expenses over the last six months living in the Bay Area
While writing my last post answering questions about moving to the Bay, I solicited feedback from some of my friends back home. One of the big questions that came up was what it actually costs me to live here, all things considered.
This seemed like a question that would benefit from a more thorough deep dive so I moved it into its own post (which you’re now reading).
What it costs someone to live obviously varies wildly. This post shouldn’t be taken as a blueprint, but it should be used to glean some insight from a single data point. My friends and coworkers earn and spend wildly different. This is simply the household bookkeeping for a single (well, two) engineers living in the Bay Area.
Below, I’ll cover the following:
- My living situation
- How much my take-home pay was
- Where my dollars go
- Where we could most easily cut back if we wanted to increase our savings rate
I wanted to first call out my living situation:
- I live with my fiancée (a software engineer as well) in a two-bed, one-bath, ~1000sqft apartment.
- We live with our two dogs and we live south of San Francisco.
- We very much enjoy going out to eat. Like… a lot.
- We don’t do a ton of travel outside of work
- We pay more than we “need to” in rent, opting for the nicest place we found.
- We don’t plan on buying a house anytime in the near future.
- We invest significant amounts of our take-home pay.
What I take home
Looking at the last six months I personally have earned:
- ~$62,000 in take-home cash
- ~$40,000 in take-home stock (w/ untaxed appreciation).
- ~$9,500 in pre-tax/traditional 401(k)
Thus, we can extrapolate that out to roughly $222,000 in take-home compensation in 2019.
This isn’t perfect because I’ll pay taxes on my 401(k) upon withdrawal and on my stock appreciation upon selling, but it’s close enough for the purposes of this post.
Note that this does not include my signing bonus, which I received in the first half of the year, so my personal take-home was quite a bit larger.
Keep in mind that the expenses below are all of the expenses between my fiancée and I and the above is only my income. Thus, this post is written as if my job supports the two of us. In reality, we live according to the below, plus her take-home into our savings.
Rent & Utilities
Our rent includes our water/sewage but no other utilities, which I’ll cover separately. In total, we spent $28,431.90 on rent for July through December of 2019. This equates to about $56,863.80 per year or ~$4,740 per month for rent.
Our rent went up a couple hundred bucks late into the year, so next year’s average will be higher than that.
As for utilities, we spent $940.79 on power and $509.82 on Internet. We don’t have cable, but we do have YouTube TV, which was $300 for the six month period.
Averaged over the six months, we spent ~$156/mo for power, $90/mo for Internet, and $50/mo for TV.
An alternate title for this blog post: Bay Area resident supports local economy by spending $20,000 at nearby restaurants in 2019.
Actually, I didn’t find this out until writing this, but we’ve spent ~$9,520 in the last six months, or ~$1587/mo, on restaurants. This technically includes times that I’ve paid the check and then got reimbursed over Venmo, but that’s not a super common occurrence.
Alternatively stated, we spend about $52/day going out for coffee, food, and drinks.
One of us takes public transit and one of us commutes via car. All calculated we spent ~$93/mo on public transit, $163/mo on Lyfts, and $107/mo on fuel.
That includes one road trip and the rare Uber between the City and Peninsula (which are very expensive). It also includes a handful of Lyfts while on business trips. I didn’t promise a scientific study!
We’re not complete savages; we do keep some food stocked in our pantry and refrigerator. We primarily shop at Costco and Safeway and our average grocery spend is ~$400/mo.
This does, however, include alcohol purchases, and we keep a pretty well-stocked bar in our apartment.
Our entertainment spending is driven primarily by concerts, shows, and movies. I think I also categorized things like audiobooks here.
Our entertainment spending is ~$525/mo, though it’s not very stable. For example, July was $130, but September was $1700 (we’re seeing Green Day/Fall Out Boy/Weezer tour and got VIP tickets).
This is 100% my fiancée’s fitness classes, but our hobby spending comes out to ~$700/mo. I think she paid for a year or two upfront so it skews the numbers, but it bears mentioning because it’ll show up in the summary I post later.
This includes a wedding dress and wedding band — two things I’m not planning on spending more money on (god willing?) — but our clothing spending averages out to $1200/mo.
Without the one-time expenses it would be around $800/mo for clothing. We both redid our wardrobes in this period and I bought some higher end garments for the first time.
- Our “general merchandise” category basically means “Amazon”, so our buying-random-stuff spending was about ~$950/mo. This is shaky because it includes things like gifts and random high-dollar items. December accounts for half of the spending due to that fact. This is pretty much our “buy random stuff” category.
- “Personal care” expenses, which cover things like haircuts and makeup, were ~$485/mo.
- We put ~$450/mo towards a low-interest car loan.
- We put ~$320/mo towards insurance, primarily driven by car insurance.
- There are lots of other random things like pet expenses, prescriptions, online services (e.g. Spotify), and car maintenance. I won’t break these down, but they’ll be in my summary below.
All together now!
Assuming that I save everything that isn’t accounted for above, here’s a chart of what my post-tax financial picture looked like for the second half of 2019. Note that this is far from scientific and things get a lot more complicated when you want to be more accurate with taxes:
I certainly do not live my life optimizing for an increased savings rate. There are plenty of things I could do to cut down on my costs, and I think they’re worth calling out:
- I could cut my rent in half moving somewhere cheaper, something multiple coworkers do (and their apartments are totally fine).
- I could buy more groceries and cook instead of going out to restaurants and bars so much. Spending >$50/day is pretty insane.
- I could go to fewer concerts and cut my entertainment budget.
- I could buy less stuff in general, as almost $1000/mo on new stuff seems like a lot. That does include all of our Christmas shopping, but still.
I guess I have a few things that I hope people take away from this piece.
For one, lifestyle creep is a real thing! I didn’t spend anywhere near this much previously. Once you have a bit more to spend, there are entire new classes of things that you wouldn’t think twice about previously, but now seem worth considering.
That said — lifestyle creep isn’t inherently bad! I make a lot more money now, I spend a lot more money now, but I also save way more money now. To some extent, I believe that we work to support a happy life, which for me means to have cash to do fun things or get cool things. Don’t be afraid to enjoy it, just enjoy it responsibly and make sure you’re always saving what you need for the future first.
Lastly, I don’t think this post can be used as a reference for “this is what I need to make to live in the Bay Area”. You could take any of those slices above and shrink it down or blow it up based on how you like to live your life and budget according to whatever your take-home pay is, be it higher or lower.
This is but one data point of a couple that really, really likes Bay Area restaurants :)