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Comment by charliepark | Hacker News Reader

Is it a common experience that, as a single person in SF, you'd make $100K and end the year without any money saved? I'm not asking with any judgment or critique implied. I'm genuinely curious if that's normal in SF.

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It is very common.

But it's also the lifestyle that forces this. I was continually perplexed at how all of my colleagues seemed to be able to afford to go to all these conferences (not always on company dime), buy the most expensive coffee, upgrade their bleeding-edge laptop the moment Apple puts out a new one, and so on. I figured out later that they just weren't saving or investing any money, and often were even accumulating debt despite their high salaries.

The culture of always being at work (or at least seeming to be) is a factor too. More and more of your meals are eaten outside the home. A lot of people use cleaning services.

Some people feel they need to do all this to keep up. I'm not sure they're wrong. When I pulled out a three-year-old iPhone, people gawped at it, like it was the Ark of the Covenant or something. I lived in a district which was not the Mission or SOMA and people acted like I lived off the edge of the world.

You're forgetting how much money people outside of San Francisco spend on their car. That makes expensive coffee, eating out, and computer upgrades look like pocket change.

I dunno. In other places, Teslas are an unusual site. I can't commute three miles without seeing one or two each day. BMWs might be more ubiquitous than Toyotas here. To be fair, I'm not in the city, I'm on the peninsula.

You can certainly save money if you make that much living in sf. Your take home would be about 65k. A very nice apartment shared with one roommate should not cost more than 2k a month, leaving you with 40k for food, entertainment, and travel. If you can't save some of this that is a comment on your priorities, not the fundamental difficulty of living in sf.

Is your estimate of 65 including state (10%) and city (1.5%) taxes?

Yes. It might actually be a bit conservative, since the overall burden for a single person making $100k with 10% state taxes is around 20% for federal taxes. And the CA overall burden is going to be more like 8.9% (marginal is 9.3% below $1M).

So, let's do the numbers to be sure.

      100 000
    -   7 009  (2013 CA on 100 000 -- not sure if std deduction should be factored in)
    -  17 820  (2012 Federal on 87 000 -- GI - state - std deduction)
    -   7 650  (Soc sec + Medicare)
      =======
       67 521

The city 1.5% tax is paid by employers and has no bearing on the $100K base salary or take home pay.

That may have been true a year ago, but a 2br apartment for 1k a person would currently put you no closer to the city than the outer richmond.

James is saying 2k per person (~24k per year, leaving you with ~40k).

For comparison, my roommate and I in Houston pay $1950/month for our apartment (or $975/person). 1300 sq ft, brand new hardwood floor, granite countertops, stainless steel appliances, huge windows, rain showers, full-sized washer/dryer in-unit, concierge service, etc. I also walk to work; it takes me about 5 minutes.

So we're paying almost exactly half what the rent would be in SF, assuming the apartment you had in mind is of the same quality. We individually make a lot more than half the wage we'd get if we went to SF, though.

> We individually make a lot more than half the wage we'd get if we went to SF, though.

But, you live in a place where it is unpleasant to be outside well more than half the year, and the typical dev in your area gets paid a lot less than the typical dev in SF (and, remember that ratios aren't really important when it comes to saving, only net [1]). Don't get me wrong, I'm sure Houston is a fine place for you, but it's important to be complete rather than just stating the pros.

[1] I.e. you make twice what it costs to live in Houston, while I make only 25% more what it costs to live in SF. But if it cost $10000 to live in Houston and $100000 to live in SF, I'm still better off.

Honestly, the weather here is great. I don't mind it at all. Your mileage may vary of course, but I find most people here do not find the weather to be a problem.

> remember that ratios aren't really important when it comes to saving, only net

Agreed, but the ratios have a big impact on what the net is. Right now, I wouldn't really be any better off going to SF in terms of saving potential. From talking with friends, the pay raise I'd get wouldn't be enough to justify it, from a purely financial viewpoint. If I stayed there for long enough, though, my salary would probably rise enough to put things in favor of SF in the end.

But that's assuming I rent my whole life. At some point I'd like to buy a house. Now things are in favor of Houston--hugely so. The average home price in SF has went above $1M recently, but in Houston it's in the 100s.

http://www.huffingtonpost.com/2013/05/29/san-francisco-media...

http://blog.chron.com/primeproperty/2013/05/median-home-pric...

In Houston, a $1M house gets you one of two things, depending on where you buy: (1) if you buy in a suburb, you'll get a mansion; (2) if you buy in the city ("in the loop"), you'll get a very nice house in probably a place like River Oaks (unambiguously the best neighborhood of Houston and possibly Texas).

IMHO, you need an income of well over $300k to afford a $1M house. How many developers in SF make that kind of money? Even in the HN demographic, it's got to be a very, very small number. Yet I could easily afford a median-priced Houston home on my starting salary out of college. I choose to rent just because I enjoy walking to work.

Anyway, strictly speaking the best strategy might be to go to SF for some of your twenties, live a crappy life but save like crazy, and then come somewhere more cost effective and buy a house, maybe also using your higher SF income to negotiate a higher wage here as well.

It is certainly not the case that you need $300k a year to afford a $1M house. $800k for a thirty year term on 3.5% gives you around $3k/mo payments. That could be reasonably carried by someone making $120k after taxes (1/3rd net income rule).

That said, for a lifetime home in this market you might need a little more than $1M, depending on what you're looking for and where you'd want to live.

I don't think we actually disagree about anything. Except the weather (^_^ I couldn't bear it). Houston vs. SF is a tradeoff. We'd need more data to know exactly where it crosses over for each person.

Yeah, I totally get why someone would go to the Bay Area. For me there were some particular reasons to stay in Houston. (1) I didn't want to leave my girlfriend behind; she couldn't have easily followed me if I had left at the time. (2) I really like the company I work for; amazing people, unique problems.

I lucked out in this regard; the biggest problem with Houston for developers is not the weather but finding a cool place to work. :P It's really a city for chemical engineers, not software engineers.

A lot of people here end up at Schlumberger or doing contracting for the oil and gas industry, which is decidedly not sexy. But it can pay well--there's an unfathomable amount of money flowing through the oil companies here. Not my cup of tea though.

There are a few good companies in Houston outside the energy industry. FlightAware is probably at the top of the list.

That said, there are huge software engineering challenges within oil. The work environment isn't what most here are comfortable with (especially Exxon and their accountability system shudder) but Houston's industries offer some extraordinary challenges for the taking. The largest medical center in the world as well as a growing financial industry offer a lot of opportunities in Big Data.

I would've stayed in Houston but I decided San Antonio had a more interesting startup ecosystem (Austin's not my cup of tea). Having TechStars and Geekdom here has really heated things up in past years.

I'm not sure if it's normal, but I can at least offer my own anecdotal experience: I'm a single guy who's been out of school for almost 10 years, living in SF for the past 3 years. I make a bit more than the $100k figure you're asking about, but if I were to adjust my income down, I'd still be saving ~35% of my take-home pay every month. And this is including eating out 8-10 times a week and going out to bars 3-4 times a week. I've since paid off my college loans, but while I was paying them I was tossing close to $1k at them per month while maintaining my savings rate. I'm not frugal, but neither am I a crazy spender either. At this point I've developed enough of a cushion that I could take 2-2.5 years off work if I wanted to.

So it's definitely doable. I think as another poster commented, it's more about priorities than ability. There's certainly enough to do here and spend money on that you could spend all your money with nothing to save, but you'd have to work at it. Especially for someone working in tech and making 6 figures, living in SF and not saving is a choice, and by no means a necessity.

Yes. Taxes are pretty high, so making $100k w/ benefits, you take home roughly $63k/yr. Then factor in rent and utilities: 1br ($2500+/mo), 2br w/ roomie ($1800+/mo), 3br w/roomies ($1500/mo). So let's assume 2br. You walk away with around $40k/yr. Then take out transport, cell phone, random monthly bills like student loans, etc and you're down to $28k disposable. Take out food and random living expenses and you don't have much left.

28k for food and random living expenses is a lot of money unless you are eating out for every meal; that's more that some people's entire paycheck (like grad students.) If you can't make room for savings in there, it definitely shows a lack of priorities.

It's twice the typical grad student pay check. (Ignoring the tuition/healthcare coverage you normally get, anyway.)

Well some people's priorities might involve having an active social life, dressing well, paying for entertainment, etc... all of which will be expensive.

It's not a "lack" of priorities, it's just a different set of them.

The point being that not thinking about the future is in fact a lack of priorities. The party is not going to last forever and not planning for that in the slightest is very short-sighted.

You can have an active social life without completely disregarding the future.

And that's your problem. I was the same way, though I live in NYC. With every pay raise I upgraded my lifestyle. Whether I was making $50k/year or $100k/year, I wasn't saving anything more besides the shit I was contributing to my 401k. My savings actually grew smaller over the years, until I made a conscious effort to save money. An effort so simple, I kick myself for not realizing it sooner.

Several simple ways I found to save money living in NYC (not SF, but close enough). Note these figures are on a per-year basis.

  - Scrap web hosting, move to AWS and S3 (~120 saved)
  - Get rid of cable, stick with cheap Internet (~1000 saved, Internet ~40/mo)
  - One night less at the bar each week (~2500 saved, that's just for a $40 tab)
  - Skip buying coffee every day (~500 saved)
  - Get a cheaper phone package (~120 saved)

In the end, I think a good rule of thumb is to keep your daily expenses under $20. You want to dress well? Wait for Banana Republic to have a 40% off everything sale, and buy clothes then. Buy clothes you're actually going to wear more than once (this is easy for guys, women have it harder).

I don't know your lifestyle or actually care what you spend money on, but complaining you can't save money is a bullshit excuse. I was bullshitting myself too, and I think everyone's got spending habits they can curb without impacting their lifestyle.

I'm not complaining about anything, I'm just pointing out that for some people saving money isn't their first or only priority, but doesn't mean they have no priorities.

$70 a day for “food and random living expenses” is far from not having much left, particularly after your $12K for “transport, cell phone, random monthly bills like student loans” which is pretty generous. Sure, you can definitely spend that much but it's not like you need to have every single meal at a nice restaurant, go to bars every night, etc.

Very true, just speaking from first-hand experience. I'm trying to pay off all my (astronomical) student loan debt as fast as possible, so I'm putting around $1800/mo into loans alone. Factor in my biggest hobby is seeing live music and you'd be surprised how quickly money can go. I've cut back severely on my drinking/partying, but with the occasional trip home to see family, 401k contribution, loan payments, and more, I walk away with about $28k/yr for all other expenses (including food, transport, cell phone, random services like spotify and netflix, and fun). Keep in mind I also got rid of my car, don't have cable, and keep monthly recurring expenses pretty low. $28k sounds like a lot, but when food is about 30% more on average than most of America (just my estimate after being back in Indiana), sales taxes are higher, and everything costs more in general, it goes quickly. I'm adjusting my priorities as I get older, but my salary also goes up and I get closer to having no debt, so it balances out I think.

Yeah, I don't want to come across as too critical but given how many people are making 30-40K before taxes I do feel the perspective is important. The major expense you mentioned is student loans and the degree to which you are not an outlier there scares me as it means that a significant people under 30, even relatively high-income professionals, are unable to make one of the best life moves because they're paying off debt rather than investing to accrue 3-4 decades of interest.

> $28k disposable... don't have much left.

For some context:

> In 2010, in the United States, the poverty threshold for one person under 65 was US$11,344 (annual income);

https://en.wikipedia.org/wiki/Poverty_threshold

and

> Half of Americans live below or at the poverty line

http://www.salon.com/2013/05/30/half_of_americans_living_bel...

Now, I know that SF is one of the more expensive places to live in this country, but still.

You misquoted Salon - they said below or /near/ the poverty line. And near is highly subjective. The census number they cite in the article is 15% which is a long way from half, and there is nothing in the article that gets the number to half the population.

Note the difference in the URL vs the final title: it's why I misquoted, accidentally.

Sorry, didn't mean to nitpick the misquote as much as to point out that the implication seems far from reality: 15% actual poverty rate vs the 50% implied by Salon. I'm sure the people living between 16% and 20% aren't living large, but the article doesn't support the 50% claim.

The Salon article has a strongly biased and is inconsistent with the Wikipedia link.

Some facts from the US Census: The US median annual household income is $52,762 for the 2007-2011 period, the latest available [1]. This means half of US household made less than $52,762 and half made more than $52,762 during this period. The Census often averages over multi-year periods to adjust for the economic cycle. In 2011 alone the media was $50,502, down due to the recession.

By Census definition income does not include either reductions for taxes or additions for noncash assistance (food, housing, medical). A household is defined as a group of one or more people living together regardless of relationship (marriage, birth). The average household size is 2.60 people in 2007-2001.

[1] http://quickfacts.census.gov/qfd/states/00000.html

I think this is normal everywhere in the US. I expect this has little to do with SF and more to do with the fact that many people all over the country, regardless of income level, are living far beyond their means and lack the discipline to make saving a priority; the US average personal savings rate has fallen to 2.5%. But what percentage buys cable tv, smartphones with data plans, auto loans for more car than they needed, etc?

http://research.stlouisfed.org/fred2/data/PSAVERT.txt

People in the US don't do well at saving. But SF is still abnormal -- you need a considerably higher salary to have the same quality of living + savings in SF as compared to many other cities.

For example: elsewhere in this thread it was stated that a one bedroom apartment runs $2500+ in SF. In my neighborhood, a decent one bedroom apartment might run $700. Sure, you might earn $90k instead of $100k, but you save twice the difference just in rent.

Yes, I've heard this from just about everyone. If you're making $50k in this city, you're basically working poor. With the average 2 bedroom condo renting for $2500+ and houses renting for more, you're dropping a ton of your income just on a place to live. Its not uncommon to see a single bedroom renting for $1600+ in the city.

Avg 1br prices are up to over $2500 now. Granted depending on area and quality, you can get down to $1600, but a majority are mid to high $2ks.

Citation? We're in the SF rental market and I work for a real estate start-up. I see 1br's in desirable neighborhoods available for $1.5-2k all day long.

A look through Craigslist gives you an idea: http://sfbay.craigslist.org/search/apa/sfc?zoomToPosting=&qu...

But note that there are many 2+ BR's in the search results so skim the list with some scrutiny. Also there's a lot of spam in the "$1200 4br" listing that appears a thousand times. Sort ascending by price to get an easier look.

According to this[1], as of February average rent for 1br in OUTER sunset is 1.9k. Another source[2] puts average 1br rent at $2547.

[1]http://sfist.com/attachments/SFist_Brock/SF-Infographic.png [2]http://www.rentjungle.com/average-rent-in-san-francisco-rent...

See seph's comment. I took that from a heatmap I saw not too long ago on avg 1br prices in each neighborhood. I'll link if I locate it again.

I don't know if it's common, but it is definitely possible to save money while making 100k in SF.

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