29M. Always lived with roommates and live in SF now. Want to move to a solo apartment that’s modern with AC. Don’t like living in older places so I’m looking at higher rent at $3350/mo. Looking at just base salary (don’t want to touch RSU vests) and don’t want to lose out on tax advantaged retirement contributions or ESPP. So annual spend (based on current expenses + optimistic guesses) looks like: 45k taxes (115k post tax income) 22.5k 401k 22k ESPP 6k IRA 3.5k medical/dental/etc (but average year should be lower) 6k travel (flights/hotels/vacays) 2k one-off purchases (furniture, tech stuff) 53k leftover or $4416/mo. That’s not much and would want bigger buffer room. Expected monthly spend: $3350 rent $65 internet $85 utilities $650 food (groceries, restaurants, drinks) $200 entertainment (movies, events, games) $150 general shopping (clothes, toiletries, misc items) $300 transport (ubers, car rental, transit) $100 gym $300 misc just in case spend = $5200/mo So that’s $800/mo shortfall. So I can either cut back on spend in some places or be willing to sell $10k RSUs every year. $3500 living expenses is 26% of gross base pay. Is that okay? #sanfrancisco #housing #budget
Yes it is reasonable
Just sell espp after they are purchased . You need at bit of a buffer to kick start and then what’s in is out. You arbitrarily impose extra saving pressure if you want to keep ESPP invested. And by the way, sell RSU and buy index fund the moment they vest.
Agreed, need to consider selling ESPP or RSU on the regular. I should sell company stock to avoid being overweighted in it but at the same time my NW is as high as it is because I held on the last few years lol
In my opinion, you should only have no more than 25% of your investments tied up in your employer’s stocks, don’t just keep them and believe the share price will increase, diversify. RSU vests are just cash in essence. If someone gave you $50k cash, would you buy your company stock? Hopefully not, better to buy index funds and diversify your portfolio
Don’t disagree in theory but it’s difficult to do so when the company stock’s performance the last few years has allowed my NW to grew far faster than market. Will make plan to cut down % in company stock. Either way, point of this budget post was to see how reasonable living on base alone is. Looks like it’s tough with how I’m imposing high savings so will need to cut back somewhere.
Just wanted to point out that if you're at $160k base, double check if you even qualify to make IRA contributions (unless you're doing backdoor Roth). That should put you past the phase out range for normal IRA contributions.
Yup this is backdoor IRA
ESPPs would sell half hearly and give more cash no?
Trying to plan where I don’t dig into my annual investments and live off base alone but it is admittedly tight budget.
Why even live there? My TC is 240K and I save or invest 9000/month
I’m also saving around that much now counting all RSU/ESPP/401k/match/IRA and trying to budget living on base alone without cutting back on any of those. It’s tight. Why live there? I’d really like to have my own space at some point. My own kitchen and full access to fridge. Play music out loud. Etc. Feel like it’s time to try the lifestyle instead of always being in save mode but it’s a tough decision.
I had 3k rent with 130k base and it was fine.
You should be selling your ESPP every year to lock in 17.5% capital returns. Other than that, everything else seems fine.
It's insanity. Also, I don't think AC in SF is really a must.
Insane bc budget doesn’t work or just in general too much for 1bd? Agree that AC isn’t strictly necessary. It’s more about being in a modern building with modern fixtures. Don’t like older buildings.
Paying 3K+ for 1br apt seems insane. I thought SF became a lot cheaper over the last couple of years?
I’ve made worse work. So, you can do it. Wont be saving much, but having roommates is way worse
To be clear, I’m still saving RSU ESPP 401k+match IRA >= 110k a year after RSU taxes depending on stock performance. But yes cash savings are tight but maybe I can feel better that there is the option to dig into investments (RSUs or ESPP) if I want to