Help me build my monthly budget for living in Los Angeles.

January 24, 2007 10:42 AM

Help me build my monthly budget for living in Los Angeles.

This question may be way too specific and fact intensive, but I thought I'd give it a shot.

I'm moving to LA in May. I'm trying to put together a budget now so I will know what kind of life I will be able to afford.

What I need help with is general advice on how accurate my estimates are.

Here is a link to my budget spreedsheet (via Google Spreadsheets). Note that there are two tabs:

(1) Income Estimates -- how much money will I actually bring home each month after taxes, deductions, etc. Note that I used this site to help estimate our state income taxes, and this site for Federal taxes.

(2) Monthly Budget -- how will I spend my money.

I have one specific question, and one very general "how's it look question."

Specific Question: to estimate "Deductions & Benefits" (stuff like insurance, retirement, teacher unions, social security, Medicare, etc. -- all the non-tax deductions) I used 14% of our incomes, which is roughly what it is right now for us in Texas. Is this accurate? How can I better estimate this? If it helps, I'll (hopefully) be working as a Hollywood assistant and my wife will be a teacher at a LA public school (likely LAUSD).

General Question: do you see anything that is clearly an under- or over-estimation?

Is there anything that is likely missing from the monthly budget?

Thanks in advance for anyone willing to help with this.

posted by JPowers to work & money (14 comments total)

The only two potential problems I see off the bat are your income estimate and the gas costs. You might get a job that pays that, or your first job might be CA minimum wage at 40 hours a week. It might be over that too (Production Assistants where I work get paid minimum wage, but on very long days, so it's more money per week), but I would count on irregular and poorly paid work for a couple years. Gas I would budget for $2.40/gallon, though it has been over and under that in the last year. On the other hand, I have a nominally long commute (16 or 22 miles each way, depending on if I take the freeway) and still only fill up a couple times a month.

I also don't see your own health insurance costs anywhere there.

I think you could scrimp and spend even less on food, and you may be able to get a cheaper deal on internet. Your utility bills might be less too. Not much home heating costs here! Most of the other number look about right to me.
posted by mzurer at 11:32 AM on January 24, 2007

Where are you planning on working? Your income guesstimate seems low for all but a really specific subset of assistant, jobs.
posted by thehmsbeagle at 11:46 AM on January 24, 2007

Um, I'm not sure why I felt the need to throw in that random comma there. SIGH.
posted by thehmsbeagle at 11:46 AM on January 24, 2007

If your wife is going to be a teacher, I'd add some money on there for buying her own supplies for the classroom - whiteboards and whiteboard pens, paper, copies, transparencies, coloring markers, butcher paper for decorating her classroom, etc. Once she knows which school she's teaching at and what she can get for free, estimate those costs ASAP at a discount store (Big Lots is usually a good deal). This estimating out-of-pocket costs is doubly important and packs a double whammy if she's a new teacher. Sad but true.
posted by universal_qlc at 11:47 AM on January 24, 2007

Have you decided where you'll be living yet? Location may have a noticeable impact on some of your costs.

Your car insurance cost looks pretty specific -- did you already get a quote from your insurance company? Personally, I paid $2200/year for my car alone when I lived in W. Hollywood (it looks like you'll have 2 cars), but your rate of course depends on where exactly you'll be living and what kind of cars you have.

Energy costs look a bit high -- I only paid about $30-40/mo. but that was without needing heat except during February (as mzurer mentions) and without central A/C. My place covered the water bill so unfortunately I can't offer any input, other than: Find a place to live that pays your water bills.
posted by puritycontrol at 11:50 AM on January 24, 2007

Things that will likely be highly variable for you are gas (depending on how far both you and your wife will live from where you work) and car insurance (depending on the neighborhood you live in). If you live in an apartment, you might not need to pay water and/or garbage. Or you might need to pay water, garbage and natural gas. You can eat cheap and very well in Los Angeles. Think tacos, tacos, tacos.

Overall, looks pretty good! Good luck on your move! I grew up in Los Angeles and love it and miss it.
posted by pazazygeek at 11:55 AM on January 24, 2007

(I just moved to LA and did not do such a detailed estimate beforehand...so take my advice with a grain of salt).

Your car insurance bills may be higher (I pay $125/month for one newish inexpensive car, I'm 26 and have a totally clean driving record). I have pretty much the bare-bones insurance, and yes I know that is bad, but what can you do. Your zip code or city will matter *a lot* for car insurance rates; people who live across the street from me, in a different zip code/city, have lower rates. It's hard to get an accurate estimate of these costs until you have an address and a parking situation-- on the street vs. in a secured garage makes a big difference, as well.

For rents, I just found Rentslicer where you can see what the average rents are by neighborhood and type of apartment. It may help you as your estimate those costs.

Depending on where you live, you may need to pay sewer costs (in addition to water) and trash removal costs. Sewer, water, & trash are all included in my rent so I can't speak to their actual costs.

My deductions from my paycheck for taxes (state & federal), retirement, health insurance, union dues, etc., are about 21%.

When you make it out here, we can have a "new to LA" meetup!
posted by holyrood at 12:07 PM on January 24, 2007

In addition to what others have said, a couple costs you might be missing:
- health costs - e.g. co-payments on visits (in addition to your medicines category), deductibles (in addition to health insurance)
-rental insurance - shouldn't be much. I'm not sure if you have to/can pay for earthquake insurance in LA or how much that runs.
-I know you grouped disposable income in one lump sum, but you might want to break down sure expenses, such as travel, gifts, body maintenance (haircuts, at least), work clothing, if your wife needs to by clothes. Sometimes I find those secretly kill my budget.
posted by Amizu at 12:18 PM on January 24, 2007

Trying to think of things I pay for pretty much regularly:
-parking (at home, could be you pay for a sticker or a space, and at work)
-entertainment - might want to budget an amount and stick to it
-dry cleaning (your wife?)
-glasses (insurance often doesn't cover)
-regular car tuneups
-gym
-student loans
-credit card loans outstanding
posted by Amizu at 12:34 PM on January 24, 2007

Lots of good thoughts for additional expenses here (esp., in my experience, medical copays or deductibles, gym membership, dry cleaning, and parking). And I'll second the likelihood that car insurance for the two of you will be higher (I pay about $120/mo. for a 2005 Hyundai), unless you've already gotten a reliable estimate.

Also, just as a heads-up when you decide to go out to spend some of that disposable income: be prepared for sticker shock in bars and restaurants. Drinks and food, even at a neighborhood bar-and-grill type of place, can seem outrageous if you're not coming from a similarly pricey city. Movie prices, too, will stun you ($14/ticket at the nicer theatres). So be prepared for the fact that your entertainment dollar will not go as far here.
posted by scody at 1:07 PM on January 24, 2007

Oh, one last thing -- I'm assuming in your "deductions and benefits" section under income, you are including automatic deductions for retirement and savings accounts, yes? But if not, don't forget to add those in.

And if you truly do have no student loan(s), no car loan(s), and no credit card(s) to pay off (I don't see those under your monthly bills), congratulations on being debt-free!
posted by scody at 2:44 PM on January 24, 2007

"And if you truly do have no student loan(s), no car loan(s), and no credit card(s) to pay off (I don't see those under your monthly bills), congratulations on being debt-free!"

Yup. Debt free.
posted by JPowers at 4:03 PM on January 24, 2007

Good for you -- that's awesome. I'm on track to get there this year myself.

And don't forget to suggest a meetup in MeTa when you get settled! The SoCalMeFi crew sometimes requires a little nudge to get together.
posted by scody at 4:26 PM on January 24, 2007

Here's a really cool tool that lets you compare the cities side by side. I estimated that your current income is equal to that of your wife's expected income and here's the results. The bottom line is that the little calculator estimates you'd need a salary increase of 77.29% from your current income to maintain your current standard of living.

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What about renters insurance and cable? Do you have any other subscriptions (TiVo, US Weekly, etc?). Are you going to travel to see family and friends? Will you have to pay a monthly fee to park at work or home? (parking eats up a significant amount of money for me, almost 10% of my takehome, I'm not in LA though).

I agree with everyone above that you'd do well to break out the disposable income further with items such as clothing, entertainment, gifts, car repair, household supplies, toiletries and personal care, etc. I'd imagine many of those items are more expensive in LA, particularly since I see you were/are probably in Waco, TX. It might be better to track where your money is currently going and use that as a starting point. If your wife regularly spends $100/month on clothing, that needs to be factored in through more than just the "money to spend or save" category I would think. A lot of stuff hides in that "money to spend or save" category.

Also, rather than allocating $X to "save or spend" I would build in a separate line item of $100 (or whatever) towards savings, which leaves you with X-100 of disposable income and is a better way to save than "well, whatever's left of X will go into savings." I'm not sure of your current financial health, but your budget doesn't appear to include saving for all the things that take you by surprise and can really impact your financial well-being: car repair, medical bills, travel, weddings (see previous in many cases), lost jobs, etc.



Good luck in LA - congrats on being debt-fee!

Not a financial guru, just a girl who has started taking this budget stuff seriously. Here, have some salt. Maybe a grain or two will do it.
posted by ml98tu at 4:37 PM on January 24, 2007