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07 Jul 2015
Cost of Living
A Dollar is a Dollar

The Dilemma

I love living in San Francisco. Moving from Atlanta to the West Coast is easily one of the best decisions I've ever made. I've met some of the smartest people I've ever known. I discovered running and Nerd Nite. I met my best friend and proposed to her two years later. We are getting married in the Bay Area next summer.

There's so much to do here. You can walk virtually anywhere in the city. The weather is fantastic most of the time. Golden Gate Park is RIGHT THERE -- not to mention nightlife in the Mission, geekiness at the Exploratorium, and shopping right downtown at Union Square. The Golden Gate Bridge, one of the most recognizable landmarks in the entire world, is within just a few miles of my apartment.

We're progressive, too. Events like Bay to Breakers are unlikely to happen anywhere else in the country. The Castro is home to one of the largest gay populations in the country -- if not the world. San Francisco is well on the way to being waste-free by 2020.

It's my favorite place to be.

So, naturally, I want my friends to be here, too. Every so often, my friends back in Alabama or Georgia will complain about how they're bored and broke. About how they can't find a job. About how the weather sucks. About this and that and that and this.

I offer to help. "Move to San Francisco," I say. "You can stay with me until you get on your feet."

Inevitably, their response: "It's too expensive."

Hogwash, I say!

Cost of Living

First, let's get some numbers. These are numbers for jobs I've worked in these cities, fudged a bit and rounded for simplicity, but the ratio between them is accurate for my own experiences. You can check out Expatistan for more general numbers, especially if you don't live where I've lived.

Some caveats:

  • I lived in Alpharetta, GA, a suburb of Atlanta, while I live in downtown SF.
  • I lived in downtown Chicago
  • Rent is for a 1BR/1BA apartment
  • Utilities include electricity, water, and gas
  • Taxes are assumed to be 30% and rounded for simplicity of calculations
  • Annual expenses are all-encompassing: rent, food, fun, clothes, ER visits, etc.
  • Annual expenses are averaged across all years living in that city
  • Salaries are rough numbers and are not my exact salary
Atlanta Chicago San Francisco
Rent $650 $1000 $4,600
Utilities $210 $200 $150
Public Transit $83 $100 Free (company perk)
Dinner for 2 $33 $40 $45
Average Salary $50,000 $70,000 $120,000
Annual Expenses $25,000 $40,000 $60,000
Annual Expenses (%) 50% 57% 50%
Taxes (30%) $15,000 $21,000 $40,000
Savings $10,000 $9,000 $20,000

As you can see, my expenses stayed roughly 50% of my salary whether I was living in Atlanta, Chicago, or San Francisco. In reality, taxes varied a bit, depending on salary and state/local taxes, but in my experience, it's really just statistical noise here. The numbers are a bit on the conservative side, for the sake of argument.

But regardless, no matter how you look at this, by living in San Francisco, I can save about $20,000 per year -- twice as much as I could in Atlanta and Chicago! Even though my expense ratio stayed the same, my absolute compensation went up.

Which leads me to my final point.

A Dollar is a Dollar

It's 2015 right now. Let's try two different scenarios: buying a house, and retiring.


Let's say in 2020, I want to move back to Alabama and buy a house near my family. As a benchmark, let's say the house is going to cost $250,000. Here's how the savings breaks down (ignoring interest):

Atlanta Chicago San Francisco
Annual Savings $10,000 $9,000 $20,000
After 5 Years $50,000 $45,000 $100,000
Equity 20% 18% 40%

By living in San Francisco for just five years, I've saved twice as much money as I would in Atlanta and Chicago, meaning that not only can I afford a 20% down payment, but I can also pay down 40% of equity right off the bat! (Note: In reality, you probably wouldn't do this... but I could!)

One thing you won't see on that chart is how much things cost. That's because at the end of the day, the cost does not matter, only the savings!


Retiring takes a lot of money in savings. I'm planning on retiring in suburban Atlanta where my brother lives. If I want an annual income of $50,000, I'm going to need $1,000,000 (1 million) in the bank in order to retire. Let's see how long it would take to do that in Atlanta, Chicago, and San Francisco.


  • Salary stays the same (in reality, you get promotions, raises, etc)
  • Expenses stay the same (e.g., same apartment, same # of kids, same lifestyle)
  • Using Bankrate's Save a Million Dollars Calculator, which accounts for compound interest and inflation
  • Assuming 5% interest, 3% inflation
Atlanta Chicago San Francisco
Annual Savings $10,000 $9,000 $20,000
Time to $1M 37 years 39 years 26 years

As you can see, I can retire over a decade earlier by working in San Francisco versus Atlanta or Chicago!

Why is this? Well, a dollar is a dollar anywhere in the country. Things may be more expensive here, but I'm saving more money here. In ten years, I can take my $500K in savings and waltz on over to Atlanta or even Alabama (where my father lives), and my money will got a LOT farther... and it will last longer simply by virtue of having more of it.

It's a no-brainer

There are some places where the math just won't work out. NYC vs San Francisco isn't such a bargain. Chicago vs Atlanta isn't much of a bargain either. And remember, these are just my own numbers -- I might have been able to get a higher salary in Chicago than I have in SF, or even a better salary in Atlanta.

All this is to say something quite simple: the benefits of San Francisco outweigh the costs. For my friends back home who have no jobs, no money, and no options, San Francisco is the land of opportunity. There are jobs, opportunities to earn money, and entertainment to keep you happy. Not everyone will have the opportunity to save as much as I have been able too -- I'm well aware of how lucky I am -- but the costs? They're worth it.

C'mon, people. Move out here. I just want you to be as happy as I am.



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