Two adults "surviving" on 85k in San Francisco in 2023

I know it seems like we just did our 2023 status check... but I wanted to do another so that they are on a yearly cadence!

Two adults living in San Francisco, where does our money go? After making projections for the future and possible retirement, this was an interesting exercise. This will at least validate my numbers for lifestyle spending, even though most things will change once we have kids.

Spending

Needs

Wants

That's $85,530 ($88,053 in 2025) all-in. It's very likely a bit less, but my wife did not track some restaurant meals that were reimbursed by her work.

Surprising things

I estimated we would spend about $85,000 ($87,507 in 2025) this year and I was surprisingly close!

Entertainment was higher than I thought. At first I thought it was just music and movies, I forgot that I also buy games. I also didn't remember that we include date night. After realizing that, I'm surprised it's not higher. There is some spending that should probably be categorized as Entertainment, but my wife is not as granular of a categorizer as me.

I already knew my housing fixed costs, but seeing it in comparison to everything else still surprises me. It's clearly the area to focus on if we ever want to reduce costs.

Anomolies & trends

Shopping is a bit high this year due to computer and expensive electronics purchases, but those should be infrequent.

We barely spent anything on Transportation, one of the benefits of living in a city with decent public transportation. Most of what we spent on was car rentals, rideshares, or trains when we took trips outside the city.

Travel is also a bit higher due to some expensive plane tickets and meals that we decided to splurge on.

Changes

Clothing and personal care are pretty low, we could double our spending and it would not materially change our overall spending. I do enjoy massages and clothes that feel good, so I'll try to give myself permission to spend more there. Maybe I'll spend less on Alcohol and more on Personal Care instead.

Reduction opportunities

If we really had to reduce spending, either due to necessity or opportunity, I'd look at the top categories: Housing, Restaurants, Travel.

Housing is obvious, but moving is expensive and disruptive. If we really had to make a large cut in our spending, this is the biggest lever we have. Unfortunately, unless we move to a very low cost of living area, this will probably go up or stay the same once we move to a bigger place for kids.

Food would be a lot cheaper if we cooked our own more often. If we did not have to spend time working, we could probably willingly reduce our food cost by about $3,000 ($3,088 in 2025) . This is not the maximum amount we could possibly reduce our food spending, we could go to extremes, but professionally made food and fine dining are things we really enjoy. Currently, the time saved by eating prepared meals is worth it since we are so busy.

Travel is a luxury, but there are definitely ways to travel for way less. Cheaper destinations, hunting deals a year ahead, playing the churn game for points, or just travel less. Optimizations like that are a hassle and our spending isn't high enough to reliably get free flights with points, but maybe every few years we can. Seeing as how it's a luxury, there's no limit to reducing this.

If we retire, these reductions would be partially offset by healthcare and transportation costs if move to a city with cheaper housing but poor public transportation.

It's nice to know that if we are no longer working and had to be very flexible with spending, we could easily cut back by about 10-20% per year.

The percentages

There are tons of guidelines that people invented as general starting points for how much you're supposed to spend, save, or invest relative to your income. I don't follow any of them, but while I have the numbers I might as well see how we stack up.

For the purpose of this exercise, I'm going to use W-2 pay - taxes as our income, excluding 401k/HSA contributions: $288,000 ($296,494 in 2025).

We allocate about 17% on needs, 13% on wants, and 70% to savings/investment. This is very surprising to me, I could have sworn we were at a 50% savings rate but our shared expenses are disproportionately handled by me and I make less than my wife on paper.

Goals

The ultimate goal is $4,500,000 ($4,632,725 in 2025) by May 30, 2025.

Portfolio

We have about $4,097,000 ($4,217,839 in 2025) invested across taxable, tax-deferred, and tax-free investments.

Looks like we gained about $300,000 ($308,848 in 2025) in two months because capitalism and interest rate news. We'll need roughly $266,000 ($273,846 in 2025) per year to meet our goal. Who knows what the market will look like in 1.5 years, but it seems doable!

Feelings

My wife and I have frugal natures. As we get closer to FI, I've been trying to introduce the concept of spending more, something my wife firmly resists. She still has a scarcity mindset to avoid spending money unless it's necessary. When we talk about moving to a bigger place for kids and how much that will cost, she starts having severe allergic reaction.

Our parents passed down this allergy. Growing up, we both saw our parentss avoid unnecessary spending because they had to. But, thanks to our parents, we are in a vastly different financial world. It will take a lot of explaining and time to get over these feelings. There's nothing wrong with spending less, but if we are going to spend less than our projections, then we might as well retire now!