- Thomas Minter, 33, lived and worked abroad for over three years before relocating to the Bay Area and buying a small, one-bedroom condo.
- By increasing revenue streams, Thomas is on a mission to reach financial freedom before he turns 40. He writes about this journey on his blog, City for Millennials.
- For Business Insider's "Real Money" series, Thomas shares how he spent his money during a week in August.
- Want to share a week of your spending? Email your money@businessinsider.com.
I knew moving to the San Francisco Bay Area was going to be expensive. I was prepared...or so I thought.
My 20s were a decade of adventure, risk taking, and good fortune. During my last semester of graduate school, I applied for a job with this description:
"Must feel comfortable working long days in remote areas of the world. May work from helicopters, on boats, or walk many miles by foot. This position will require extensive travel, sometimes with only 24-hours notice."
I got the job, and two weeks later, I was on a plane to Haiti, where I spent the next few months supporting a USAID earthquake response effort.
Later that year, the Deepwater Horizon Oil Spill occurred. I flew back to the US, and hopped on an airboat for a year. Saudi Arabia was next. Three years in-country, working on a large scale marsh restoration program.
I loved the adventure. I also loved the cash flow and tax minimization that came with living and working abroad.
During this time, I prepared my personal finances for an eventual move back to my home state of California. $80,000 of student loans eliminated. $75,000 invested. $30,000 home equity. $25,000 cash.
At 29, I felt financially ready to plant roots in the Bay Area. Boy, was I in for a surprise.
As mentioned, I knew the cost of living would be high. But, if I had known the magnitude, I may have done a few things differently.
I soon learned that the average income needed to afford a median-priced home in the San Francisco Bay Area is $187,000 ($334,000 in the city proper). In my search for a place to live, I came across listings that I thought were a joke. They weren't. So much cost for so little house.
Luckily, I landed a small 700-square-foot, one-bedroom condo in Oakland...for $441,000. An identical unit next to me just sold for $520,000.
In my 20s, I gallivanted around the world, making more money than I knew what to do with.
Now, I live frugally in one of the most expensive areas in the world. But I couldn't be happier.
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Here's a look at my monthly spending (not my including fiancée's spending or expenses), which totals around $8,027. My biggest expense is housing, followed by aggressive retirement contributions which I can cut back on if needed.
Yes, our situation could be worse. We are very lucky. My fiancée and I both have decent jobs — I'm a market strategist and operations manager at an engineering firm and she's an environmental planner. Our combined annual income is about $200,000 (before any bonuses). We also work multiple side hustles, including freelance writing and food delivery, and have the ability to save for our future retirement. But we work very hard to achieve this, and we have to be strategic with our spending.
According to the Bureau of Labor Statistics, the average American spends over 60% of their income on housing, food, and transportation. When you add in healthcare, entertainment, and clothing expenditures, there is little to nothing left over to save, particularly if you live in a high cost of living area.
We decided to reduce the top three expenses (housing, food, and transportation) as much as we could. As you can see, housing is my single largest cost. Since I own our condo, we are building equity over time, as opposed spending money on rent. The mortgage is on par with the rental costs in the area.
Currently, we are evaluating a duplex purchase with the intention of moving into one of the units. We would cover half of the mortgage by renting out the other unit. This is called house hacking, and may reduce our housing costs over time. But for the time being, we are unable to reduce our housing costs any further.
Our monthly food costs fluctuate based on how often we eat out. We save over $500 by eating at home every day for a week during a month. This simple lifestyle adjustment adds up over the year. Lastly, when we shop for groceries we take advantage of cash back and rewards apps which helps us reduce our food costs even further (and we split the total cost).
As for transportation, we only use the car one day a week. We ride our bikes most places. Great savings and amazing exercise — especially on the hills of San Francisco!
During a recent week in August, I spent about one-fourth of my typical monthly spend, including one $0 day.
August may be the best month to spend outside in the Bay Area. Karl the Fog typically goes on vacation, so the skies are clear, and the views are incredible.
My favorite activities include cycling around the Marin Headlands, hiking in the East Bay Regional Parks, or watching our dog gallop along the sandy beaches.
Unfortunately, nearly every activity comes with a high price tag in the San Francisco Bay Area. For those trying to reach financial freedom while living in an expensive city, you need to get creative to spend less and make more.
Since we are getting married at the end of the month, I have not been doing the best job at spending less.
On Monday, I was determined to start the week off right and save money by bringing my lunch to work.
I work in Downtown Oakland. The San Francisco culinary influence stretches across the SF Bay, and with it, the big-city prices. On average, if I eat lunch out during the weekday, I prepare for a $15 bill.
In an attempt to save money on weekly food costs, my fiancée, Rachael, and I try and bring our lunches to work during the week.
Today, I brought my lunch to work and ate both breakfast and dinner at home.
To optimize our evenings together, Rachael and I order our groceries online with Amazon Prime Now. This frees up time for some exercise after work before we start working on our side gigs.
We have our food for the week delivered on Mondays. Our total grocery bill added up to $134.58 today (of which I paid half, $66.29).
My largest expense today was $93.33 to a virtual assistant who helps manage my blog's social media presence.
See the rest of the story at Business Insider