I live in the Bay Area, but my cost of living is pretty low: roughly $30k/year. I think I live an extremely comfortable life. I try to be fairly frugal, both so I don’t end up dependent on jobs with high salaries and so that I can donate a lot of my income, but it doesn’t feel like much of a sacrifice. Often when I tell people how little I spend, they’re shocked. I think people conceive of the Bay as exorbitantly expensive, and it can be, but it doesn’t have to be.
Rent: I pay ~$850 a month for my room. It’s a small room in a fairly large group house I live in with nine friends. It’s a nice space with plenty of common areas and a big backyard. I know of a few other places like this (including in even pricier areas like Palo Alto). You just need to know where to look and to be willing to live with friends. On top of rent I pay ~$200/month (edit: I was missing one expense, it’s more like $300) for things like utilities, repairs on the house, and keeping the house tidy.
I pool the grocery bill with my housemates so we can optimize where we shop a little. We also often cook for each other (notably most of us, including myself, also get free meals on weekdays in the offices we work from, though I don’t think my cost of living was much higher when I was cooking for myself each day not that long ago). It works out to ~$200/month.
I don’t buy that much stuff. I thrift most of my clothes, but I buy myself nice items when it matters (for example comfy, somewhat-expensive socks really do make my day better when I wear them). I have a bunch of miscellaneous small expenses like my Claude subscription, toothpaste, etc, but they don’t add up to much.
I don’t have a car, a child, or a pet (but my housemate has a cat, which is almost the same thing).
I try to avoid meal delivery and Ubers, though I use them in a pinch. Public transportation costs aren’t nothing, but they’re quite manageable.
I actually have a PA who helps me with some personal accounting matters that I’m particularly bad at handling myself. He works remotely from Canada and charges $15/hour. I probably average a few hours of his time each week.
I shy away from super expensive hobbies or events, but I still partake when they seem really fulfilling. Most of the social events I’m invited to are free. I take a couple (domestic) non-work trips each year, usually to visit family.
I also have occasional surprise $500-$7,000 expenses, like buying a new laptop when mine breaks. Call that an extra $10k a year.
In many ways, I’m very fortunate to be able to have this lifestyle.
I honestly feel a little bewildered by how much money people around me spend and how dependent some people seem on earning a very large salary. Many people around me also seem kind of anxious about their financial security, even though they earn a good amount of money. Because my lifestyle is pretty frugal, I feel very good about how much runway I have.
I realize that people’s time is often extremely valuable, and I absolutely believe you can turn money into more time. Sometimes people around me are aghast at how much time I waste walking to the office or sitting on the BART. But for me, I don’t think I would actually be much more productive if I spent 10x as much money on productivity, and it feels extremely freeing to know I could quit my (nonprofit) job any time and fairly easily scrape by. I recommend at least considering it, if you haven’t already.
Note that most people either have or want children, which changes the calculus here: you need a larger place (often a whole house if you have many or want to live with extended family), and are more likely to benefit from paying a cleaner/domestic help (which is surprisingly expensive in the Bay and cannot be hired remotely). Furthermore, if you’re a meat-eater and want to buy ethically sourced meat or animal products, this increases the cost of food a lot.
I want to push back on the idea of needing a large[1] place if you have a family.
In the US a four person family will typically live in a 2,000-2,500 square foot place, but in Europe the same family will typically live in something like 1,000-1,400 square feet. In Asia it’s often less, and earlier in the US’s history it also was much less than what it is today.
If smaller sizes work for others across time and space I believe it is often sufficient for people in the US today.
Yeah that’s fair. But the lifestyle of ~$850 a month room in a group house isn’t that nice if you have many kids, and so it makes sense that people benefit from more money to afford a nicer place.
And like, sure, you can get by on less money than some people assume, but the original comment imo understates how much you and your family benefit from more money (e.g the use of “bewildered”).
As the father of 2 kids (a 5 y/o and 2 y/o) in Palo Alto, I can confirm that childcare is a lot. $2k per kid per month at our subsidized academic-affiliation rate. At $48k, it’s almost the entirety of my wife’s PhD salary. Fortunately, I have a well-paying job and we are not strapped for money.
We also got along with just an e-bike for 6 years, saving something like $15k per year in car insurance and gas (save for 9 months when we had the luxury of borrowing a car from family) [Incorrect, see below]. We got a car recently due to a longer commute, but even then, I still use the e-bike almost everyday because the car is not much faster and overlapping with exercise time is valuable (plus the 5 y/o told me he likes fresh air),
For clothes/toys/etc., we’ve used Facebook market place, “Buy Nothing” groups, and our neighbors to source pretty much everything. The best toys have just been cardboard, masking tape, and scissors, which are very cheap.
[Edit: As comments below point out, the figure for no-car savings was incorrect. It’s closer to $8k, taking into account gas, insurance, maintenance, and repairs. Apologies for the embellishment—I think it was from a combination of factors including (i) being proud of previously not owning a car, (ii) making enough not to track it closely, and (iii) deferring to my spouse for most of our household payments/financial management (which is not great on my part—she is busy and household management is a real burden).
To shore up my credibility on child care, I pulled our receipts, and we’re currently at $2,478 per month for the toddler, and $1,400 per month for the kindergartener’s after-school program (though cheaper options were available for the after-school program).]
It can vary enormously based on risk factors, choice of car, and quantity of coverage, but that does still sound extremely high to me. I think even if you’re a 25-yo male with pretty generous coverage above minimum liability, you probably won’t be paying more than ~$300/mo unless you have recent accidents on your record. Gas costs obviously scale ~linearly with miles driven, but even if your daily commute is a 40 mile round-trip, that’s still only like $200/mo. (There are people with longer commutes than that, but not ones that you can easily substitute for with an e-bike; even 20 miles each way seems like a stretch.)
Thank you both for calling this out, because I was clearly incorrect. I was trying to recall my wife’s initial calculation, which I believe included maintenance, insurance, gas, and repairs.
I think this is one of those things where I was so proud of not owning a car that the amount saved morphed from $8k to $10k to $15k in the retelling. I need to stop doing that.
Also, I’m feeling some whiplash reading my reply because I totally sound like an LLM when called out for a mistake. Maybe similar neural pathways for embellishment were firing, haha.
My rent, also in a small room in a Bay Area group house, is around $1050. This is an interesting group house phenomenon where if rent is $1800 on average, the good rooms go for $2600 and the bad ones have to be $1000 to balance out total rent. The best rooms in a group house are a limited supply good and bc people (or even couples) often are indifferent between group house with good social scene and a $4000 luxury 1bed, prices are roughly similar. There is lots of road noise, but I realized I could pay $1000 for extra-thick blackout curtains, smart lightbulbs, etc. to mitigate this, which has saved me thousands over the past couple of years.
As for everything else, my sense is it’s not for most people. To have expenses as low as OP’s you basically need to have only zero-cost or cost-saving hobbies like cooking and thrifting, and enjoy all aspects of them. I got into cooking at one point but didn’t like shopping and wanted to use moderately nice ingredients, so when cooking for my housemates the ingredients (from an expensive grocery store through Instacart) came out to $18/serving. A basic car is also super useful, bay area or not.
I am probably one of the people OP mentions, with a bunch of financial anxiety despite being able to save close to $100k/year, but this is largely due to a psychological block keeping me from investing most of my money.
This resonates with me. I’ve always been a fan of Mr. Money Mustache’s perspective that it doesn’t take much money at all to live a really awesome life, which I think is similar to the perspective you’re sharing.
Some thoughts:
Housing is huge. And living with friends is a huge help. But I think for a lot of people that isn’t a pragmatic option (tied to an area; friends unwilling or incompatible; need privacy), and then they get stuck paying a lot for housing.
Going car free helps a lot. Unfortunately, I think most places in North America make this somewhat difficult, and the places that don’t tend to have high housing costs.
Traveling is expensive. Flights, hotels, Ubers, food. I find myself in lots of situations where I feel socially obligated to travel, like for weddings and stuff, and so end up traveling maybe 4-6x/year, but this isn’t the hardest thing in the world to avoid. You could explain to people that you have a hard budget for two trips a year.
Spending $200/month or whatever on food means being strategic about ingredients. Which I very much thinkisdoable, but yeah, it requires a fair amount of agency.
Pay 800-ish a month in rent for one room in a shared house.
Pay a few hundred a month for a PA to help me with tasks like laundry and packaging supplements.
Walk to and from work, am happy to use ubers when I travel farther afield.
Eat almost exclusively at the office, and generally buy simple groceries that require minimal prep rather than eating out.
If I think something might make me more effective, and it costs less than ~150, I buy it and try it out, and give it away if it doesn’t work out. (Things like “kneeling chair”, “lifting shoes”, “heart rate monitor”, “backpack that’s better for running in”, “shirt that might fit me”, “heavy duty mask and filters”, “textbooks”, “bluetooth headphones”, “extra chargers”.)
I currently save (and invest) something like 90% of my income. Though my my income has changed a lot in different years. When I’m working a lot less on paid projects, and don’t have a salary, I make less money, and only save like 20% to 40%.
However, I’m semi-infamously indifferent to fun (and to most forms of physical pleasure), and I spend almost all my time working or studying. So my situation probably doesn’t generalize to most people.
Notes on living semi-frugally in the Bay Area.
I live in the Bay Area, but my cost of living is pretty low: roughly $30k/year. I think I live an extremely comfortable life. I try to be fairly frugal, both so I don’t end up dependent on jobs with high salaries and so that I can donate a lot of my income, but it doesn’t feel like much of a sacrifice. Often when I tell people how little I spend, they’re shocked. I think people conceive of the Bay as exorbitantly expensive, and it can be, but it doesn’t have to be.
Rent: I pay ~$850 a month for my room. It’s a small room in a fairly large group house I live in with nine friends. It’s a nice space with plenty of common areas and a big backyard. I know of a few other places like this (including in even pricier areas like Palo Alto). You just need to know where to look and to be willing to live with friends. On top of rent I pay ~$200/month (edit: I was missing one expense, it’s more like $300) for things like utilities, repairs on the house, and keeping the house tidy.
I pool the grocery bill with my housemates so we can optimize where we shop a little. We also often cook for each other (notably most of us, including myself, also get free meals on weekdays in the offices we work from, though I don’t think my cost of living was much higher when I was cooking for myself each day not that long ago). It works out to ~$200/month.
I don’t buy that much stuff. I thrift most of my clothes, but I buy myself nice items when it matters (for example comfy, somewhat-expensive socks really do make my day better when I wear them). I have a bunch of miscellaneous small expenses like my Claude subscription, toothpaste, etc, but they don’t add up to much.
I don’t have a car, a child, or a pet (but my housemate has a cat, which is almost the same thing).
I try to avoid meal delivery and Ubers, though I use them in a pinch. Public transportation costs aren’t nothing, but they’re quite manageable.
I actually have a PA who helps me with some personal accounting matters that I’m particularly bad at handling myself. He works remotely from Canada and charges $15/hour. I probably average a few hours of his time each week.
I shy away from super expensive hobbies or events, but I still partake when they seem really fulfilling. Most of the social events I’m invited to are free. I take a couple (domestic) non-work trips each year, usually to visit family.
I also have occasional surprise $500-$7,000 expenses, like buying a new laptop when mine breaks. Call that an extra $10k a year.
In many ways, I’m very fortunate to be able to have this lifestyle.
I honestly feel a little bewildered by how much money people around me spend and how dependent some people seem on earning a very large salary. Many people around me also seem kind of anxious about their financial security, even though they earn a good amount of money. Because my lifestyle is pretty frugal, I feel very good about how much runway I have.
I realize that people’s time is often extremely valuable, and I absolutely believe you can turn money into more time. Sometimes people around me are aghast at how much time I waste walking to the office or sitting on the BART. But for me, I don’t think I would actually be much more productive if I spent 10x as much money on productivity, and it feels extremely freeing to know I could quit my (nonprofit) job any time and fairly easily scrape by. I recommend at least considering it, if you haven’t already.
Note that most people either have or want children, which changes the calculus here: you need a larger place (often a whole house if you have many or want to live with extended family), and are more likely to benefit from paying a cleaner/domestic help (which is surprisingly expensive in the Bay and cannot be hired remotely). Furthermore, if you’re a meat-eater and want to buy ethically sourced meat or animal products, this increases the cost of food a lot.
I want to push back on the idea of needing a large[1] place if you have a family.
In the US a four person family will typically live in a 2,000-2,500 square foot place, but in Europe the same family will typically live in something like 1,000-1,400 square feet. In Asia it’s often less, and earlier in the US’s history it also was much less than what it is today.
If smaller sizes work for others across time and space I believe it is often sufficient for people in the US today.
Well, you just said “larger”.
Yeah that’s fair. But the lifestyle of ~$850 a month room in a group house isn’t that nice if you have many kids, and so it makes sense that people benefit from more money to afford a nicer place.
And like, sure, you can get by on less money than some people assume, but the original comment imo understates how much you and your family benefit from more money (e.g the use of “bewildered”).
As the father of 2 kids (a 5 y/o and 2 y/o) in Palo Alto, I can confirm that childcare is a lot. $2k per kid per month at our subsidized academic-affiliation rate. At $48k, it’s almost the entirety of my wife’s PhD salary. Fortunately, I have a well-paying job and we are not strapped for money.
We also got along with just an e-bike for 6 years, saving something like $15k per year in car insurance and gas (save for 9 months when we had the luxury of borrowing a car from family) [Incorrect, see below]. We got a car recently due to a longer commute, but even then, I still use the e-bike almost everyday because the car is not much faster and overlapping with exercise time is valuable (plus the 5 y/o told me he likes fresh air),
For clothes/toys/etc., we’ve used Facebook market place, “Buy Nothing” groups, and our neighbors to source pretty much everything. The best toys have just been cardboard, masking tape, and scissors, which are very cheap.
[Edit: As comments below point out, the figure for no-car savings was incorrect. It’s closer to $8k, taking into account gas, insurance, maintenance, and repairs. Apologies for the embellishment—I think it was from a combination of factors including (i) being proud of previously not owning a car, (ii) making enough not to track it closely, and (iii) deferring to my spouse for most of our household payments/financial management (which is not great on my part—she is busy and household management is a real burden).
To shore up my credibility on child care, I pulled our receipts, and we’re currently at $2,478 per month for the toddler, and $1,400 per month for the kindergartener’s after-school program (though cheaper options were available for the after-school program).]
Is $15k a year typical for car insurance? In the UK it’s a few hundred dollars a year at most unless you’re a very young or very risky driver.
It can vary enormously based on risk factors, choice of car, and quantity of coverage, but that does still sound extremely high to me. I think even if you’re a 25-yo male with pretty generous coverage above minimum liability, you probably won’t be paying more than ~$300/mo unless you have recent accidents on your record. Gas costs obviously scale ~linearly with miles driven, but even if your daily commute is a 40 mile round-trip, that’s still only like $200/mo. (There are people with longer commutes than that, but not ones that you can easily substitute for with an e-bike; even 20 miles each way seems like a stretch.)
Thank you both for calling this out, because I was clearly incorrect. I was trying to recall my wife’s initial calculation, which I believe included maintenance, insurance, gas, and repairs.
I think this is one of those things where I was so proud of not owning a car that the amount saved morphed from $8k to $10k to $15k in the retelling. I need to stop doing that.
Also, I’m feeling some whiplash reading my reply because I totally sound like an LLM when called out for a mistake. Maybe similar neural pathways for embellishment were firing, haha.
What group of people is this claim supposed to refer to, LessWrong readers? The world population?
I was thinking about US adults, but I’d guess it applies to LW readers and world adult population also.
69% of US adults say they have children, 15% do not but still want to (source)
My rent, also in a small room in a Bay Area group house, is around $1050. This is an interesting group house phenomenon where if rent is $1800 on average, the good rooms go for $2600 and the bad ones have to be $1000 to balance out total rent. The best rooms in a group house are a limited supply good and bc people (or even couples) often are indifferent between group house with good social scene and a $4000 luxury 1bed, prices are roughly similar. There is lots of road noise, but I realized I could pay $1000 for extra-thick blackout curtains, smart lightbulbs, etc. to mitigate this, which has saved me thousands over the past couple of years.
As for everything else, my sense is it’s not for most people. To have expenses as low as OP’s you basically need to have only zero-cost or cost-saving hobbies like cooking and thrifting, and enjoy all aspects of them. I got into cooking at one point but didn’t like shopping and wanted to use moderately nice ingredients, so when cooking for my housemates the ingredients (from an expensive grocery store through Instacart) came out to $18/serving. A basic car is also super useful, bay area or not.
I am probably one of the people OP mentions, with a bunch of financial anxiety despite being able to save close to $100k/year, but this is largely due to a psychological block keeping me from investing most of my money.
This resonates with me. I’ve always been a fan of Mr. Money Mustache’s perspective that it doesn’t take much money at all to live a really awesome life, which I think is similar to the perspective you’re sharing.
Some thoughts:
Housing is huge. And living with friends is a huge help. But I think for a lot of people that isn’t a pragmatic option (tied to an area; friends unwilling or incompatible; need privacy), and then they get stuck paying a lot for housing.
Going car free helps a lot. Unfortunately, I think most places in North America make this somewhat difficult, and the places that don’t tend to have high housing costs.
Traveling is expensive. Flights, hotels, Ubers, food. I find myself in lots of situations where I feel socially obligated to travel, like for weddings and stuff, and so end up traveling maybe 4-6x/year, but this isn’t the hardest thing in the world to avoid. You could explain to people that you have a hard budget for two trips a year.
Spending $200/month or whatever on food means being strategic about ingredients. Which I very much think is doable, but yeah, it requires a fair amount of agency.
I also live in the Bay area, and live similarly.
Pay 800-ish a month in rent for one room in a shared house.
Pay a few hundred a month for a PA to help me with tasks like laundry and packaging supplements.
Walk to and from work, am happy to use ubers when I travel farther afield.
Eat almost exclusively at the office, and generally buy simple groceries that require minimal prep rather than eating out.
If I think something might make me more effective, and it costs less than ~150, I buy it and try it out, and give it away if it doesn’t work out. (Things like “kneeling chair”, “lifting shoes”, “heart rate monitor”, “backpack that’s better for running in”, “shirt that might fit me”, “heavy duty mask and filters”, “textbooks”, “bluetooth headphones”, “extra chargers”.)
I currently save (and invest) something like 90% of my income. Though my my income has changed a lot in different years. When I’m working a lot less on paid projects, and don’t have a salary, I make less money, and only save like 20% to 40%.
However, I’m semi-infamously indifferent to fun (and to most forms of physical pleasure), and I spend almost all my time working or studying. So my situation probably doesn’t generalize to most people.