First Year Analyst Budget (HC at SF BB)
(This is a throwaway account for purposes of anonymity)
I have been reading various posts about budgeting and savings as a first year analyst but most posts were dated (ie 70k base instead of 85) and did not go very in depth. As the title says, I will be starting as a first year analyst at a BB in SF this coming summer. (85k base, 10k signing). I did not intern in CA so I am unsure exactly what I will be able to expect for take home pay and savings. Most important thing is to be able to get my own place in a decent area. Other than rent I plan to be as conservative as possible.
I have prepared a monthly budget and was hoping that some current or former west coast analysts could tell me where I might be incorrectly estimating certain items or leaving out charges. The tax rates are derived from a tax calculator online and I believe it assumed no deductions so I am hoping this will be a conservative scenario. For simplicity sake I have assumed a 50k bonus here. (I took the tax rates from a 145k salary) Thanks in advance!
85k/12=$7083.33 per month
Assume: Effective tax rates - Federal 20.81%, State 7.45%, FICA 6.34%
Leaves: $4629.67
-401k $425
-Insurance/Benefits $150
-Rent (Studio in a nice area) $2500
-Utilities $150
Leaves: $1404.67 for food/ent/trans
-Lunch/Groceries $500
-Cellphone/NFLX/Spotify $81
-Transportation (Assuming walking to work) $100
-Going out with group (Don't drink so just food and water) $100
Leaves: $623.67 for saving/spending
Yearly: $7484.04 savings from base if no additional spending occurs (unlikely)
$10200 savings from 401k w/ match
$32700 for bonus (50k taxed at same rates)
Total Possible Year 1 Savings: $50384.04
Bump
At a BB, not SF, my benefits + dental / vision / disability come out to like 45/mo. Might give you some more wiggle room (assuming it is similar across geographies and banks).
I agree with others you're being a bit too optimistic. Though you're budgeting aggressively so even if you exceed spending by a bit I'm sure it wont kill you to be saving 40k / 45k as opposed to 50k. (Also remember the bonus, while most likely being along the lines of 50k, DOES have semi-significant variance).
Thanks for that insight, that's exactly what I was looking for.
That's definitely true. In my limited experience I've found that there are always unknowns that ruin a budget. In the end if I could bank the 401k and bonus that'd be solid, just don't want to be worrying with no money in the bank until bonus time
Did my banking in SF as well. That’s roughly what I saved in my first year.
Thank you for the response. I assume you have a good sense of the city. I have been having trouble finding even a studio in a decent area for less than 3000 a month (I found one place for a little over 2500 but I don't feel comfortable gambling it all on that place.) Were you able to live by yourself during your banking stint, and is my 2500 goal for a studio doable (in a place that isn't the tenderloin)?
So, you’re not going on a single date or buying a single plane ticket all year? No new clothes or shoes? Lot’s of additional expenses you’re leaving out. It’s good that you are already planning ahead though - it’ll serve you well in the long run.
Thank you for the response. All valid points. I am willing to forego things like dates and flights (aside from those for work which will be paid for) for at least my first year. My idea was to allocate my signing bonus for clothes/shoes/security deposit, hence it was not included in my calculation of savings. Obviously I agree that this will be incredibly tough. Moreover, a preliminary search of studios in decent areas has the price looking more like 2800 to 3200 which I worry I will not be able to swing.
Pretty fortunate guy - I'll probably end up in SF for the upcoming year myself, but the "Going out with group (Don't drink so just food and water)" expenses would probably come out to $50,384.04
Are you being serious with this one? I believe my group goes out maybe once a week, so I figured $25 per outing for a club soda and an appetizer was pretty realistic. Hope it doesn't exceed $100 a month!
I think your calculation is too optimistic, I do not know what is your financial situation but I would try to enjoy things a little more and relax your spending standards a bit, your life quality will significantly improve and you will perform better at work.
A bit confused here. I felt like 2500 for an apartment is pretty relaxed, as most people seem to aim for a few roommates and 1800 in SF.
I've found that if I have no roommates and live in a nicer area that typically results in the best performance, hence budgeting only rent so high. Even now I tend to be very frugal in all other areas and don't mind it.
In SF, if you can save that much, kudos to you.
More realistically a first year analyst who doesn't live off seamless and goes outside will be saving ~7.5-15k after-tax before 401K + match.
You're accounting for a bare minimum lifestyle. Add in the cost of clothing, shoes, watches, laptop, TV, internet, etc; + juulpods/alc/weed (its cali) and other vices and you're adding an extra 500-600 a month on average in post-tax expenses minimum, and that's if you're still barely living a life.
I think that is fair. However, wouldn't saving 7.5k to 15k imply that I would have outstanding credit card debt until bonus time rolls around? That is something I am trying to avoid at all costs.
As stated above I plan to use signing bonus for clothes and only use work sponsored electronics (internet included in utilities). Also, as I said I don't go out on my own/smoke or drink so I guess that is kind of right in line with having 500-600 left at the end of a month like you said. Obviously most people wouldn't be okay with this but I'm quite used to doing nothing but work and sleep so I really don't mind for another 2 years. End goal is at least 45k saved in total.
$116k per year is considered low income in SF. This city is much more expensive than NY.
45k after tax saved, even with the company match on 401k (which is likely 4%?) is basically 80k pre-tax income. That means you're living on roughly 60-70k pre-tax income, which is basically poverty levels in this city man.
Way too optimistic on bonus tax rates, it's much closer to 50%
Why would you say that? I know initially they may tax it at the highest bracket (around 50%) but I would assume I'd get back a lot with my tax return. Bonuses are supposed to be taxed at the same rate as regular income (since that is what the count towards).
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