How We Live Comfortably For Under $3k per Month in the Bay Area

Have you heard about the couple that makes $500,000 a year and still feels average?

The story originally appeared on Financial Samurai, and discussed further on sites like CNBC and LATimes.

It details the expenses of a couple living in Brooklyn, New York. They each make $250,000 a year as lawyers, and have two young children (3 and 5 years old). Yet somehow they feel like they’re just “scraping by” on this $500k per year salary.

As the LA Times article and post commentators pointed out, a lot of their expenses are luxuries and not necessities. For example, having two cars in NYC ($9,600) or taking three family vacations per year ($18,000).

Here’s how they spend their $500k per year salary:

It’s pretty obvious this couple could reduce a significant amount of this spending and still live a very comfortable life. But how much exactly?

I decided to compare their annual expenses with the annual expenses of my household (consisting of myself, my wife Allison, and our two 18-year old Siamese cats).

I’ll get into the particulars and caveats in a moment, but let’s first look at our numbers for each of their line items. (Note: some of our expenses didn’t line up exactly with theirs, so I included a “Notes on our Budget” column):

Despite living in similarly priced cities, our yearly budget checks in at a mere 12.3% of their budget!

Of course, there are some major differences in our households. They have kids and we don’t. They also have a mortgage, car payments, and student loans, and we’ve paid all of those off.

Chances are you fall somewhere between our budget and the $500k couple’s budget. While it may not be feasible to get your expenses as low as ours, you can certainly do some serious trimming.

Here’s how we’ve gotten our monthly budget below $3,000 while living very comfortably in the Bay Area...


This is almost always going to be your largest expense. Even though we’ve paid off our mortgage, more than half our budget goes toward property taxes and HOA dues.

We’re frequently asked “How did you pay off your mortgage at such a young age?” In our blog post How We Turned a $20k Down Payment into a $1 Million Paid Off Home, we go over the details of our 18-year Real Estate journey.

We started off very modestly with a one-bedroom condo in the Oakland Hills. We then upgraded several times over the years in different neighborhoods of San Francisco.

Eventually, we were able to downsize back to Oakland. We rolled all the equity from our previous properties, and it was enough to pay for our current home in full.

Views from our current residence in Oakland

If you want to pay your mortgage off faster, pay a little more each month toward your principal or make one extra payment per year. Also, monitor interest rates and refinance when they go down.

And don’t feel like you have to buy. Check out our Rent vs Buy Calculator to see which option makes the most sense for you. In some areas, renting can actually be less expensive than buying (and it provides more freedom and flexibility).


The $500k couple spends $23,000 per year in food expenses. Allison and I love food, but we’ve been able to keep our food bill to about $4,200 per year.

How do we keep our food bill low? First, we shop smart. We get most of our groceries in bulk from Costco or Sprouts (a natural food store in Oakland).

Here are some of the food items we get for less at these stores: coffee, options for breakfast, lunch, and dinner, and snacks like peanut butter (my favorite) and Oreos (you have to live a little).  We also get all our pet food & litter in bulk.

For produce, Allison’s found the best deals at our local Chinatown. She’ll come home with great big bags of broccoli, bananas, corn, oranges, strawberries, etc. Most of the bags will be $1 or $2 each.

Allison bought this whole bag of broccoli for $1 in Chinatown

And when it comes to eating out, we’ll splurge at a fancy restaurant occasionally but usually try to find good local spots that offer cheap eats.

If you live in or near a city, just go on Yelp and search for local restaurants. We try to go with the ones with the most reviews, most stars, and in the lower price ranges.


One of the ways we’ve kept our transportation costs low is to continue driving our 2003 VW Jetta. We bought it brand new (putting the down payment on a credit card that earned us a rebate), paid it off within the first year, and have been driving it ever since.

Fortunately, we don’t drive very often, so it only has 105k miles on it. But even if you drive more than we do, try to get a car that’s at least a couple of years old. If you take care of it, you should be able to drive for well over 100k miles.

We also always fill up the gas tank at Costco, where the prices are typically anywhere from $.07 to over $.40 per gallon cheaper than other gas stations (not including the Costco rebate).


Allison and I love to travel! We even have a site dedicated to travel and adventure called Experiencify.

But even when we’re out enjoying a big trip, we try not to break the bank. We enjoy cruises and try to find deals that average less than $100 per day. It’s a fun and inexpensive way for us to visit a number of new places.

We’ll typically add additional travel before or after our cruise. This gives us the ability to explore on our own time and schedule, and see a lot more than just the ports.

Overlooking our cruise ship in Huatulco, Mexico

When traveling on our own, we like to look for Airbnbs and higher-end hostels. It can be a little hit or miss, so you have to make sure to do your research and read reviews ahead of time.

But if you do your research, you’ll many times find you can stay a lot more cheaply than at a hotel. And you get to experience your destination more like a local!

You can also find deals for getting around if you do some digging. We found a great deal with AirAsia when we were in SE Asia to take us to all the cities in Vietnam, Thailand, Hong Kong, and Singapore.

Other Expenses

Once you’ve tamed your top household expenses, you can look to further trim down with some smaller costs.


We’re very conscious about turning off lights when they’re not in use. We even plug most of our electronics into power strips, so we can turn the whole strip off when not in use (otherwise those electronics continue to use juice even when they’re turned off).

Another way we save energy is by drying our clothes on a clothing rack instead of using our electric dryer.


The $500k couple spend $9,500 per year on clothing for four people. On the flipside, Allison and I essentially spend $0 on clothing.

Rather than purchasing expensive new clothes every few months, we get free clothes from our friend Monica’s clothing swaps. If you want to try one out for yourself, check out for swaps in your area.


To keep your insurance costs low, opt for high deductible plans. These will cover you for catastrophic events like major accidents or illnesses, while keeping your monthly payments low.

Also, if you drive an older car like we do, you may want to cancel your collision and comprehensive car insurance. Since our car is only worth about $1,000 now, we could easily replace it if it were totaled.


As you can see, there are many ways to reduce your expenses if you’re diligent and creative. And all that money you save can go to funding your retirement nest egg.

Whether you want to retire like we did, or plan on working into your later years, you still need to sock money away now. You need time and compound interest to grow that nest egg.

And the good news about our budget is that we don’t actually feel like we’re “on a budget.” We live in one of the most expensive and interesting places in America, and we’re very happy.

You can do the same thing!

To learn more about managing expenses, increasing income, paying off debt, and investing, check out our online course How To Retire Early in 6 Easy Steps.

10 Responses

  1. erik ellenes

    i am gonna try your method!

  2. Terry Whalen

    Hi Dylin, we rent out our single family home via AirBnB and VRBO when we are traveling, and that helps to pay for our travels. It’s definitely some work and coordination, but it seems worth it.

    • dylinr

      I like that idea! Unfortunately, we can’t do it, because our condo HOA doesn’t allow short term rentals.

  3. Andy Hill

    Excellent overview Dylin! I would say my wife and I fall in between the Brooklyn family and your family. We’re continually working on decreasing our expenses. The mortgage (our biggest expense) will be gone in December and that will catapult us forward big time!! I’m very intrigued by the clothing swap concept. That’s amazing!

    • dylinr

      Yes, paying off the mortgage will help tremendously! And yes, definitely try doing a clothing swap. It saves a lot of money, and you’ll get some cool stuff that you probably wouldn’t have bought on your own.

  4. […] You can learn more about how we reduce our expenses in this blog post. […]

  5. David @iretiredyoung

    This is a good read. I’ve also retired young, although my costs are more than yours, so may be I can pick up a few tips here. We’re planning to travel from mid next year, and I’m trying to persuade my wife that carefully selected hostels are a good idea. I think we’ll be able to travel for the same or less than we spend now, and we’ll have fun finding out.

  6. Kim

    Curious, what about health insurance?

    • dylinr

      We use Covered California, which is California’s version of the ACA.

  7. […] times get tough, do what you can to keep your income and benefits coming in, and look for ways to trim your budget. […]