Save 30k A Year (Stanley: rental, credit card, house)

[Deeman804]

Agree with the above comments. People over dramatize the cost. It cost a lot to live here but you can definitely do it and the decrease in savings more than makes up for the increase in the quality of life for a young person.

[LocalGuy61]

What is your goal, other than saving $30,000 per year? If you get a year's worth of living expenses saved, or even two years, as your emergency cash reserves, it's probably time to stop putting your savings into cash. You need to redirect it at that point to a more diversified collection of investments (stocks, bonds, natural resources, real estate, precious metals, etc.). Do you have a grand total in mind that you want to put into cash, or do you plan to save $30,000 per year until you retire?

Originally Posted by Mishra100

Easy question, but hard answer. I live in Louisville currently and try to save up to 30k a year off of my salary. I don't quite make it but that's basically my goal.

I have the opportunity to take a job located in Ashburn, VA and Reston, VA. From all the research of cost of living, I don't think it will be much of a raise. But it will be a title/opportunity increase.

I'm a single male (long term g/f that lives with me) that is frugal-very frugal. My life style looks like this, and I don't expect it to change at all until I can reach my goal:

* 2000 Honda Civic, 150k miles
* Ranch Style Home, 1,200 sq ft. on top, but probably 800 downstairs. 950 a month on a 15 year loan. (already paying more into principal than interest... very good stuff)
* Dinners range from chicken noodle soup / Chicken dinner / Taco Bell (cheapest I can) / Five guys. Maybe a sit down restaurant every now and then
* 0-1 Cheap Vacations a year
* Entertainment from cheap projects on the house, video games, board games with friends, going for walks/exercising
* Almost 0 shopping for things like clothes / random crap / electronics

Hardest thing in this equation is housing... I won't be able to find the nice little ranch in VA. Sterling looks good in term of real middle class housing, but they sure don't have middle class housing prices. I'm probably going to have to condo it up to reach my goal (very sad about this).

What salary will I have to make in order to reach this goal you think while maintaining my life style?

[Mishra100]

Originally Posted by MountainMen

I think you'll have to choose between living in a house and your 30k savings goal. Doubt you could have both.

Sadly, that's what it sounds like. I keep going back and forth since interest rates are so low.

[Mishra100]

Originally Posted by GoHokiesGo

Don't forget that you'll need to find and pay for parking in DC as well - there's not going to be free parking for several days downtown. A friend may be able to drop you off, but just other things to keep in mind.

If you're really as disciplined as you say and can get a salary to match the increase in housing costs, you might be able to hit your goal. It certainly wont be easy, and I'd venture to say that you wouldn't be able to enjoy all those perks you gain by moving to the DC area if you're strapping yourself to that much of a budget. Ashburn is typically about an hour from DC in average traffic, and a nice area in general. Good luck

I wouldn't be able to enjoy it as in spend a ton of money there. But being to DC before, there are a ton of free things to do. It's free to sit on the beach in Virginia beach. It won't cost too much to go to New York just to look and adventure. When I think of those perks, I don't think of hotel suites, expensive restaurants, dance clubs, and so on. It's more of an exploration of what is out there.

[Mishra100]

Originally Posted by kuntz

I have been living here in DC with a wife and 2 small kids. I make roughly $95k a year and we are in our mid-30s. My wife is not working because we want to raise our children at home. We owe only one car, live in Alexandria in order to be close to work and I can still save over $18,000/year. Now considering you are a single guy and like me, you enjoy saving money, I am sure you can save enough if you follow your current lifestyle here in DC.
There are a lot of naysayers, and if you have to follow everybody, you won’t make your dream come true. DC area is very expensive, but you can make it as long as you make a decent salary and live a simple life.
Most people here want to follow the crowd by living in a huge mansion and driving nice cars, that’s where they get into financial trouble. would say, take a step of faith and follow your dream. Come on in.

I think you hit it on the head when you said "follow the crowd". I have no interest in spending money until I can equate it to very tiny percentages of my net worth. For example, the most I think I can spend on a car is 5% of my net worth or less. And that even sounds high. It's crazy to think people spend 100%+ of their net worth on a car.

[Mishra100]

Originally Posted by oneasterisk

The car isn't too much of an issue IMO. It's a Honda Civic, they're pretty reliable and if he needed to buy another one they're pretty cheap to replace. Also repairs aren't too expensive in comparison to say a BMW/Mercedes.

I have to give kudos to the super savers out there though. It's good to see there are folks willing to save while having to live in our high COL area. Is the $30k including retirement funds?

Not really. I think I might ramp up my retirement funds more into this 30k. But currently, I'm counting retirement savings separate. This would be only the max 401k match like I'm doing with my current employer.

[halfabuck]

Well sorry to say I do not like cheap people because invariably they end up scrounging off of others to satisfy their own needs. Hey, I'll be your friend but let's eat at your house and use your services so I can save mine. And if you are not that cheap what happens if your life changes and you don't make it past the next year? Who gets your money and your house? I feel bad for you because it sounds like your life is passing you by the wrong way.

[Mishra100]

Originally Posted by eastli84

Completely agree with this. Just live within your means, save your butt off, enjoy the proximity to great cities, and you'll hit your goals while having a good quality of life.

Additionally, I looked at your salary scenarios and at 90K your estimated savings rate matches my current rate as well. You could also get by at 60-70K, not save as much, but be able to get a 1br place for 1200-1500. Personally, once I started earning over 60K I was able to easily afford my own apartment, save money, and have fun with friends. If you're earning under that in DC, it's best to rent a room within a house.

To clear the air, it's a 4 hour drive/bus ride to NYC. Tack on an extra 1-2 hours if you're stuck in rush hour traffic or a construction zone.

Are you renting or owning to reach that savings rate? Any roommates?

[Mishra100]

Originally Posted by LocalGuy61

What is your goal, other than saving $30,000 per year? If you get a year's worth of living expenses saved, or even two years, as your emergency cash reserves, it's probably time to stop putting your savings into cash. You need to redirect it at that point to a more diversified collection of investments (stocks, bonds, natural resources, real estate, precious metals, etc.). Do you have a grand total in mind that you want to put into cash, or do you plan to save $30,000 per year until you retire?

Yes, I have my emergency fund sitting in a 2.5% interest checking account.

Retirement funds sit in a mutual fund.

All other liquid savings sit in stocks, 1 earning dividends (want more).

I own a tiny amount of gold.

Real estate is the rest. (my current home)

[Mishra100]

Originally Posted by halfabuck

Well sorry to say I do not like cheap people because invariably they end up scrounging off of others to satisfy their own needs. Hey, I'll be your friend but let's eat at your house and use your services so I can save mine. And if you are not that cheap what happens if your life changes and you don't make it past the next year? Who gets your money and your house? I feel bad for you because it sounds like your life is passing you by the wrong way.

That's why freedom in awesome. I really enjoy saving and know that compound interest will make me rich and be able to enjoy a retirement beyond my dreams.

That may not be your thing so you can spend it how you feel. I love that dynamic.

And just in case you care, I definitely feel good about being a fully independent person and not requiring anyone else to save how I need to save. And if I do pass, then my family will be able to fully enjoy the choices I made in life. That makes me feel great.