Home Economics No. 2: Living in the San Francisco Bay Area on $13,200 a Month

$3,100 for rent, $1,500 for private school tuition, $1,500 for groceries...

Welcome to our series HOME ECONOMICS, where we take a deep dive into someone’s financial situation by looking at their earnings, monthly expenses, and general money story.

This week, we have a 36-year-old working mom living in the San Francisco Bay Area with her husband and school-aged child. 

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About me: My husband and I live in the San Francisco Bay Area with our one school-aged kid. While I have a master’s degree (and the student loan debt to prove it), right now I’m living in a state that doesn’t recognize my license and certification, so I work as a nonprofit administrator. I have two chronic illnesses that have impacted how much I can work since my kid was born. My husband is an engineer and has a very demanding job. 

Age: 36
Location: San Francisco Bay Area
Relationship status: married
Age of partner: 35

All expenses are monthly and shared unless otherwise noted.

Income:

1. Your job title/salary: Nonprofit Administrator - $30/hr (25–29 hours per week) 

2. Partner’s job title/salary: Engineering Supervisor - $215,000 salary plus bonuses

3. Your monthly take-home pay (paycheck amount after taxes and other deductions): $2,400 (seems low compared to hourly because of unpaid vacation)

4. Partner’s monthly take-home pay (paycheck amount after taxes and other deductions): $10,800

5. Total monthly income: $13,200

Account balances:

6. Checking account balance: $800

7. Savings account balance: $270

8. High-yield savings account balance: $2,300 (4.5% APY)

9. Monthly contribution to savings account: $1,700

10. Retirement account balances (for both me and my husband): 

    • 401(k): $19,000 

    • Roth IRA: $5,500

    • IRA: $70,000

    • IRA Rollover: $8,100

11. Monthly contribution to retirement accounts:

    • 401(k): Husband contributes $550 (which includes partial employer match)

12. Investment account balances: 

    • Brokerage: $11,000 

    • Restricted Stock Units (RSUs) brokerage account: $65,300 (ladder vesting, both quarterly and annually)

13. Monthly investment account contributions:

    • RSUs: New additional for ladder vesting is $30k–60k/year; awarded annually

14. 529 account balance: $2,500

15. Monthly 529 account contributions: $0

16. Emergency fund balance: $9,000

17. Goal-oriented savings account balances: 

    • Vacations: $700 

    • Summer childcare: $2,000

    • Gifts: $1,000

    • Local family adventures: $600 

Housing:

18. Size of your home: We rent an 1,100 square-foot, 2 bed/2 bath apartment in a large complex with over 1,000 units, within a larger residential neighborhood (which has the standard parks, schools, shopping center, single-family homes, etc.).

19. Rent: $3,100 

20. Renters insurance: $136 annually

21. Electricity: $85

22. Cell phone: $85

23. Internet: $50

24. Housekeeper: N/A

25. Other (water, gas, sewer, garbage): $200

Transportation:

26. Monthly car payment: $636 (We’re 24 months through a 36-month lease with an 8% APR.)

27. Car insurance: $120

28. Gas: $280

29. Public transportation: $25 (FasTrak)

30. Ride shares (Uber, taxi, etc.): $25 (in lieu of a second car when the bicycle won't do)

31. Other: $75 for bike maintenance (husband bikes to work some)

Children:

32. Number of children and their ages: 1, school age

33. School tuition: $1,500 for private school (Last year, a family member covered our kid’s tuition; next year, we’re applying for financial aid. If we don’t qualify, we’ll need to decide if we want to use money from our RSU account to pay for it or put him back in public school.)

34. Summer care: $2,000/mo (Usually, our kid attends various sports and activity-based camps from 9 a.m. to 4 p.m. In the past, we’ve tried to piece childcare together because my job affords me a large amount of autonomy [task-based vs. set schedule]. But after trying that last summer, I realized it was hugely stressful and didn't save us any money. So this summer we are trying out full-time day care for the summer, plus a few weeks working remotely and visiting family and friends. Even though I am a working parent, it also feels like I’m sort of a stay-at-home mom since I have a more flexible schedule. I manage 90% of the tasks like scheduling and attending doctor’s appointments, setting up summer care, and coordinating after-school activities, etc.)   

35. After school: $100 for 1 day per week for 1 hour immediately following school (He enjoys after-school care with friends.)

36. Babysitter: $20/hr (though rarely, not more than 4 hours per month)

37. Extracurriculars: $80 for 1 hour per week of after-school sport clubs

38. Other: $50 (clothing) and $100 (gifts and misc.)

Debts:

39. Student loan total balance: 

    • Me: $99,000 

    • Spouse: $1,100

40. Student loan monthly payment: 

    • Me: $0 (I have federal student loans from my master’s degree, and I’m on an income-based repayment plan. Right now, my monthly payments are $0. My husband and I file “married filing separately” because of my medical expenses and student loan debt.)

    • Spouse: $56

41. Personal loan total balance: $41,000 

42. Personal loan monthly payments: $1,329

43. What did you use the personal loan for? At the beginning of the pandemic, we faced a number of big financial setbacks. I had major surgery. My husband’s salary was reduced by half because of pandemic-era cutbacks at his then-employer. At the time, we owned a home (not in California), and during this same period, we had to replace the sewer line and heating system, which cost tens of thousands. Then both our cars died. We relied on credit cards to make ends meet during this time. This past year, we finally consolidated our credit card debt into a personal loan so we could pay it off at a much lower interest rate.

44. Credit card balance (if you carry a balance month to month): We pay off CC balances every month. 

Food:

45. Groceries: $1,500 (This includes meal kits; it’s my working mom compromise, as it’s cheaper than eating out on busy work nights or when we are exhausted.)

46. Dining out: $300 (includes takeout)

Socializing and Entertainment:

47. Subscriptions (streaming services, magazines, etc.): $95 (Hulu, Peacock, Apple TV, Netflix, PBS, Kindle, Spotify, Audible—we de- and re-activate depending on what we want to watch.)

48. Memberships (museums, etc.): N/A

49. Movies, concerts, other events: $50

50. Entertaining and other social activities: $50 (This includes hosting game nights, buying alcohol, or bringing baked goods to friends. I love to bake but I’m gluten-free, so I give most of it away!)

Miscellaneous:

51. Clothing: $200

52. Home supplies: $50 

53. Exercise: $100 for local gym membership

54. Personal and self-care (haircuts, manicures, massages, etc.): $250 (massage for chronic pain management); $30 bimonthly threading; $50 semi-annual haircut

55. Donations: $100 (We support different local and international programs that provide food and/or educational support to kids; right now, it’s Compassion International for this budget item. Plus we’ll donate to school and local fundraisers, probably around $50 or so per month.)

56. Tithing: $1,900

57. Events: $1,500/year for child's family birthday trip (aka family vacation, but we let our kid help pick)

Insurance:

58. Life insurance:

    • Whole (3 policies): $180/month; $16,000 total balance (I realize whole life insurance is controversial, but because I have a chronic illness, we’re very risk averse.)

    • Whole life for child: $50/month

    • Term (2 policies): $78/month; $1.8m total value

59. Health insurance: We have a high deductible plan with an HSA through my husband’s employer and pay $690 a month for the premium. The federal cap for yearly HSA contributions ($8,300 for families) is lower than our annual out-of-pocket expenses, but because we file separately and my income is fairly low, we manage medical costs using a four-fold strategy:

    • HSA reimbursements for $6,500/year (this goes toward the entire family's medical, dental, vision, and therapy costs)

    • Partial reimbursement from my employer for therapy expenses

    • A percentage recoup from itemized tax deductions for my medical expenses

    • Out-of-pocket costs averaged over the whole year, after these three, is about $300/month, not including massage therapy and my gym membership (which some insurance companies do cover, at least in part but ours does not)

60. HSA Contribution: $600 (pre-tax from spouse's paycheck)

Tell us more:

61. What are your top financial priorities? 

    • To be consumer-debt free

    • To move to a lower-cost-of-living area

    • Save $10,000 for our emergency fund

    • Increase husband’s 401(k) contribution to get full employer match

    • Restart regular contributions to my retirement accounts (My employer doesn’t offer a 401(k) match, so we’ve been prioritizing my husband’s account.)

62. How do you feel about your current financial situation?

    I feel thankful we are able to do all we do on less than $160,000 net income a year while living in a high-cost-of-living area. We’ve definitely had a rough time of things in the past, and we accumulated a lot of debt because of medical bills, home repairs, and our cars breaking down. 

63. What are your money stressors?

    • Paying for private school. (We had our kid in public school for kindergarten and ended up pulling him out after three months because he was physically attacked by another child multiple times during recess. He was home with me for six weeks while I tried to simultaneously work and home-school, and then we enrolled him in a private school.)  

    • Not owning land

    • Consumer loan payoff

    • Student loan forgiveness income tax payment to IRS in 9 years

    • Summer care (Summer care is so expensive where we live. It’s at least $2,000 a month for all-day care, not including hidden costs like lunch and snacks. Plus, I end up spending one to two hours in the car driving between home, summer care, and work, five days a week all summer—it’s a lot of work that makes it hard to feel like we’re having a quality summer.) 

64. Do you expect to receive (or have you received) an inheritance from a family member?

    We anticipate future inheritances when loved ones pass, but we do not factor these into our financial planning. My husband and I both come from very conservative and religious families, and we have complicated relationships with them. Growing up, we were taught it was rude to talk about money, and we should never ask for financial help—it was very much a “pull yourself up by your bootstraps” type culture.

65. Do you receive any financial support from your family?

    We have received financial gifts from loved ones at big life milestones in the past (birth of child, our first home purchase, etc.). And they might help again if/when we buy another home, but we’ve come to not expect this, and we do not factor it in when making financial decisions. When we were struggling after I had surgery and we had so many big household bills to cover, our immediate family offered no support at all. And the family member who helped out with private school tuition is not part of our immediate family.

66. Do you financially support any family members beyond yourself and your nuclear family?

    No.

67. How do you and your partner split your finances? How did you decide to go that route?

    We put our paychecks into joint accounts, and we see all money as "ours." We each have a monthly discretionary spend account where we can either let cash accumulate or be drawn down, each at our own discretion with no feedback from the other. All other nonessential purchases are discussed and must be agreed upon before moving forward. Any accounts that can’t be joint (for example, my husband’s 401(k) and RSU brokerage) are listed in a will and trust, and we are each other's sole primary beneficiaries and have primary power of attorney.

    We also file our taxes “married filing separately.” As I mentioned earlier, I have nearly six-figures in federal student loans, and I make considerably less than my husband. By filing separately from my spouse, I’m able to qualify for an income-based repayment program as well as loan forgiveness. If you have a lot of student loan debt and a lower salary than your spouse, you might want to see if it makes sense to file separately. 

68. What financial goal(s) do you still want to achieve?

    • Buying another home. My husband is considering a job transfer to an area where we could afford one.

    • Paying down the personal loan over the next 3 years to free up additional money to cover non-mortgage and non-insurance expenses. Houses are expensive! 

    • I’d like to move back to a state that recognizes my master's degree and board certification. It’s ridiculous, and my earning potential is crippled here. Also, I miss working in my field. And obviously, earning more would help us be able to save more to buy a home.

69. What do you regret spending your money on the most? 

    Needless consumerism instead of therapy; working fewer hours to avoid the cost of summer care in the past.

70. What is one thing you spend money on that makes your life better?

    My gym membership. It helps me maintain my health, provides pain relief, and improves my mental and emotional quality of life. Being healthy makes me a better parent.

71. What is one thing you spend money on that drives you crazy?

    Food waste! Our apartment does not allow for composting, and we throw away spoiled food. I grew up on a farm, and both not being able to grow food and putting food in the regular garbage is criminal to me. 

72. Is there anything else you would like to add?

    I don't regret my student loan debt from my master's degree at all. The work I trained to do matters to me deeply, even if I’m not practicing it at the moment. The temporary debt and complicated yearly tax filing are worth it. 

    A big part of what I consider financial success is making intentional and wise choices that factor in goals and skills, as well as current reality, and then honoring your life by choosing your choices!

I’m excited to open the comments for Home Economics, but I ask that people please be thoughtful in what they post. I reserve the right to delete any comments that are not kind. Thank you!