Living the Dream: What It Costs to Live in San Francisco

San Francisco, without doubt, is one of the greatest city in the world. It is a top vacation destination spot and one of the best cities in the world to live. If you are in technology, there is, arguably, no better place (outside of living down the Peninsula if you work there). The tech boom has created great opportunities, high wages, and a lot of fun. It is perhaps the top restaurant city in the world.

The cost, literally, of this boom, is higher prices. In step with this technology boom, is a real estate boom (perhaps coupled with a regressive city housing policy), driving housing and rental prices very high. And, in general, the cost of living is quite high.

This begs a practical question: What does it cost to live in San Francisco? And, there is the follow up question, Is it "affordable?" If you are new graduate contemplating moving here, I hope the answers provide some insight into whether you want to live here.

Let's do some simple math.

TL;DR; -- If you are a software engineer, it's close. If you are careful about entertainment expenses, you can live here!

Assume you are a software engineer. And single. You want to take advantage of all the City has to offer you. According to Glass Door, the average salary for a software engineer is about $125,000/year in San Francisco.

I've done a little spreadsheet work to created a hypothetical situation for what it take to live in San Francisco. Of course, YMMV.

Some observations the income side:

• I assume you will save money and do so efficiently, namely through a tax deferred 401(k) plan that hopefully your employer provides. 
• I also assume you don't have other streams of income (trust funds, parental support, investments, etc.).
• It might be surprising -- your total tax rate is over 39%.

Note that, on the expense side, I reflect what I consider a "single" lifestyle. If you are married and/or have kids, this calculation is waaayyy off.  Some observations on expenses:

• If rent is $2,500, I'm guessing you might have a roommate. 
• Entertainment expenses dominate -- all in. I calculate this is about $2400/month. 
• Owning a car is a big swing. $400/month probably underestimates owning a car and possibly overestimates an Uber/Getaround habit without a car.
• Dating relationships can change expenses dramatically -- especially in terms of rental and entertainment expenses. Do you pay 100% for your partner? Or does your partner(s :-)) pay for you? This calculation assumes you pay your own way.
• I've left off a bunch of other miscellaneous things, such as media (NetFlix, books, online subscriptions), household expenses/creature comforts, automobile, electronics. Could this be another $500/month? 
• There is no line item for savings -- except through your 401(k) plan.

Conclusion

If you back off a little on a big social life, don't own a car, and don't have to support anyone else, it's doable! Barely. And pray those stock options pay off.