July Money Diary: How Much Does It Cost to Live in Los Angeles?
We use the app GoodBudget to track all our expenses. The app uses an envelope budgeting system, where you set up a budget for each category. At the beginning of every month, each "envelope" is filled and you subtract your spending.
We prefer GoodBudget to Mint because it forces us to log every expense manually. Why? We believe that the process of saving money should be made easier and spending should be made harder. Logging our expenses as they happen help us to make more conscious choices. And we never get blind-sided by our bank statements.
The app also has a great reports feature that breaks down our expenses by category. Let's take a look at our spending for the month of July. We think it's a pretty good representation of what a typical month looks like.
Expenses for the Month of July 2016
1. Rent and Bills ($1709.62)
Our fixed monthly costs. This is how this envelope breaks down:
- $1400 for rent (including all utilities and parking)
- $150 for the phone bill (For a six line family plan. We take care of the bill.)
- $55 for internet (includes a modem rental)
- $100-150 for gas and other household essentials
$1400 is a little on the high end for a studio apartment, but we live in an expensive part of town that's just a 10 minute commute to work. Usually you can get a studio for about $1100-1200 in other parts of LA. In our case, we value our time much more than the savings. LA rush hour traffic is no joke.
Think about it. One extra hour a day sitting in traffic means you lose almost 24 hours every month. That's the equivalent of taking close to two weeks out of every year. Would you pay $2000 a year to live 3% longer AND save yourself a lot of unnecessary stress? You bet we would.
2. Eating Out & Entertainment ($328.68)
We go out a little under two times a week and try to keep it under $50 a day (with the exception of birthdays and anniversaries). This is a warm-up for when we eventually go on our round the world trip in 2018. If we can do $50 a day in Los Angeles, we can make it pretty much anywhere (outside of maybe Western Europe and Scandinavia).
3. Groceries ($305.27)
We buy in bulk at Costco and Trader Joe's, with occasional trips to an Asian supermarket. We don't go out of our way to cut back on groceries and it always works out to about $300 a month.
4. Savings, Education, Investments ($232.87)
The title is a little misleading (we don't save just $232 per month). This tracks the money that we use to invest in ourselves. This includes things like books, registration fees for courses or exams, tools/electronics for work etc. In July this was mainly website and domain registration fees plus other costs related to starting The Origami Life!
5. Miscellaneous ($156.53)
Morning coffee runs, afternoon ice cream and midnight snacks go here. Sometimes it's the little things that make life worthwhile.
6. Life Happens ($54.40)
Unexpected expenses. These are the things we didn't budget for. Usually around $50-100 a month.