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Can you live on $1,250/month in Silicon Valley?


Can you live on $1,250/month in Silicon Valley?I was talking to my younger brother, Chris, recently and he told me his cost of living is only about $1,250 per month. That’s extremely low considering he lives in Silicon Valley, one of the more expensive areas in the USA. How does he do this? I hope he isn’t eating ramen noodles every night. That’s not healthy at all. $1,250 per month sounds like a very Spartan existence for that area of the country. We live modestly and our monthly expense is around $4,000 per month. Portland is quite a bit less expensive than Silicon Valley as well. How does he do this? Let’s see if he can answer some questions for us.

Can you break down your monthly cost of living?

  • Housing and Utilities: $550. I rent a room from a friend who owns a home in an older, but safe neighborhood in the East Bay. Everything is close by and accessible within a half hour drive w/o traffic.
  • Food: $250. I go out to eat with friends once or twice a week. The rest of the time I cook at home. Cooking at home is cheaper, healthier and just as tasty when you know how to cook.
  • Transportation: $75 for gas. $75 for auto insurance. I have a short half hour commute to work and I also have the flexibility to work from home part time so I don’t spend much time on the road. A safe driving record coupled with an economy car keeps my insurance cost low.
  • Phone: $50 for phone. I have a grandfathered plan with Sprint that includes unlimited data, unlimited text and more minutes than I have use for.
  • Misc: $250. This is the discretionary fund for miscellaneous expenses I have every month. It includes everything from entertainment (clothes, gadgets, etc…) to routine oil changes that come along every few months.

You make a decent income as a techie in Silicon Valley, so how come you don’t live it up a bit? Can you give us a little background on why you are so frugal?

There are two main reasons. First, I don’t believe spending more money and “living it up” would make me any happier in the long run. I’m perfectly happy living a modest and comfortable life style. Example, I could afford to buy a new luxury car but my current Mazda hatchback can accomplish everything I need. No, my car doesn’t have a neat dashboard rear view mirror display, but who really needs that stuff anyways.

Second, I spent way too much time in school pursuing an advanced degree and started working later than I would have liked. Yes, I have a couple of nice calligraphies papers in a drawer, but not much to show for it in my bank account for those years. While I didn’t incur any debt because I worked and had scholarships and assistantships, I wasn’t able to put much money away, either. I feel like I need to make up for that lost saving time now. I’m still single so I can live the way I do now but I know that eventually when I have do have a family, my expenses will rise considerably.

What do you do for entertainment? Do you go to concerts or movies? Going out on a date can cost a lot of money, too. $250 doesn’t sound like much for a single guy.

Like any other large city, the San Francisco bay area offer more venues for entertainment than I can count. I just stick to ones in my price range. If I skip the court side seats, I can still afford to go to a Warrior’s game at Oracle Arena or a Giants game at AT&T park.

As for dating, I admit it. I’m a cheap date. Pinkberry frozen yogurt and a walk around Mission Peak, coffee and a movie or maybe a picnic at Crissy Field looking out at the Golden Gate Bridge. If I get a good vibe, I’ll make fancier plans. I’m not going to get along with someone that demands I take her out to a $200 dinner every time we got out.

Can you share some of your long term goals? Are you trying to hit a certain amount of net worth?

It’s hard to predict how much money I’ll need in the future, you don’t know what will happen, but I share my brother’s aspiration for financial independence. I want to save enough money so I can make any decisions without worrying about whether I will have enough money to pay the bills. My main goal right now is to save and invest soundly so I can be semi-retired and have financially freedom by the time I’m 50.


Thank you Chris for sharing your frugal lifestyle with us. I think it’s great that he is working on financial independence. He is in software engineering and that’s not a lovable field. You never know when you’re going to get laid off. It’s best to save as much as you can while you’re making good money. I think he should splurge a bit when he goes out on dates, though. Pinkberry isn’t going impress anyone. 🙂

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.

Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.

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{ 44 comments… add one }
  • Ms. Frugal Asian Finance July 3, 2018, 10:42 am

    “I think he should splurge a bit when he goes out on dates, though. Pinkberry isn’t going impress anyone.”

    Haha I love your honesty! When I read this line, I literally thought about what I’d do if hubby took me out to get froyo on our 1st official date. Maybe I’d be thinking to myself “Do you really like frozen yogurt that much?”

    That said, it’s a good test of whether the girl is genuinely interested. Chris did say he’d make fancier plans if he gets a good vibe, so there’s room for making a good impression right there :p

  • Kate September 10, 2015, 12:06 pm

    I live on $1250/mo from SSDI in Alameda, CA, a small island in San Francisco Bay, off the south coast of Oakland. I live in a 100sq foot room & bath (SRO).
    It’s very small. It’s depressing. If this had been my choice, I would probably feel better about it.
    Yes, sure, it can be done. I know, I’m doing it.

  • Smart Money MD May 10, 2015, 10:13 am

    I think that the key for your brother is that he is single and willing to live with a roommate. When I lived in Manhattan, I lived a similarly frugal lifestyle but without a roommate. My monthly expenses averaged around $1700. I was cooking most meals at home or bringing lunch to work. My income was in the mid-low 6-figures along with a ton of debt so my savings rate was somewhat low.

    • retirebyforty May 11, 2015, 9:48 am

      That’s really good for Manhattan.

  • anonymous December 5, 2014, 1:41 pm

    Your brother’s lifestyle isn’t anything to be celebrated as admirable as most commenters seem to feel here. It’s ok to live that way while building a nest egg, but long term extreme frugality doesn’t contribute much to the economy at all and actually end up resulting in more layoffs, local small businesses shutting down, and more power in the hands of the multinational corporations.

    • retirebyforty December 5, 2014, 10:26 pm

      He has been working for less than 5 years so this is the right time for frugality. Once he’s more settled, then I’m sure he’ll loosen up a bit.

  • Lisa December 1, 2014, 1:43 pm

    I live in the North Bay and work on San Francisco, so I know how expensive living in the area can get! $550 is a great price for East Bay housing! Now if only I can get my car insurance that low…

  • Joseph Hogue November 29, 2014, 12:50 pm

    Wow, that’s pretty impressive for San Francisco. Being married makes it a little easier. Both my wife and I keep to the frugal lifestyle. Finding the things to do at public venues like the park is the best.

  • Dividend Diplomats November 27, 2014, 8:11 am


    Great guest post to show a few big ticket items/reasons:
    -Living in simplicity can be as fulfilling or even more than a luxurious lifestyle
    -In today’s age, we have the ability to truly control our expenditures
    -Keep a good balance (occasional time going out to eat and a game, coupled with making food at home and free entertainment)
    -Save and Save, Save more.

    Thanks for the post and Happy Thanksgiving!

  • Ginger November 27, 2014, 7:19 am

    I’ve very impressed by your brother! I know students that don’t spend that little. 🙂

  • freebird November 26, 2014, 7:51 pm

    I was doing exactly that until I semi-retired a few months ago to SoCal. My spending was $900/mon for a studio apartment (Union/Camden area), $60/mon for food (vegan), $100/mon for car, and less than $200/mon for everything else. It’s not a lifestyle that inspires envy from most, but it was plenty for me, even as my “decent income” averaged paying out six figures in annual income taxes over the past decade. Like Chris my S-curve has a low saturation point, meaning it doesn’t take much to satisfy me, and I feel hardly any gain from spending more. Unlike Chris I finished school early, and I guess if anything maybe I regret having overshot my savings target by quite a bit. The Bay Area has many great places for young adults to go out, but that’s pretty expensive so I stayed focused on work. This too may have been a mistake, as I’ve lost interest in many things over the years.

    Anyway Chris is a couple of decades behind me, so if he wants to know what it looks like from my angle, I’d say that financial independence is definitely worthwhile and the sooner the better. Tech work can be unstable and it’s a great feeling to not be needing the paycheck when we hit middle age. For me a layoff would have been icing due to the severance. My feeling on dating is that what counts is the conversation, the menu and the venue don’t matter at all. OTOH I’m still single so maybe my attitude is a problem.

    • retirebyforty November 29, 2014, 11:50 am

      Oh wow, your cost of living was so low in the Bay Area. I hope you’re enjoying your semi-retirement in sunny So Cal. Are you spending a bit more now?

  • Frugal Pediatrician November 26, 2014, 4:33 pm

    Good to be frugal but I think you need to loosen up on the dating budget. As college kids my husband and I would at least go to the movies!

  • Natalia November 26, 2014, 3:34 pm

    Actually if your family of 3 spends $4000 it’s really only $1333 per person which I think is pretty good, and you get to live in a fabulous urban area in a place that you own. Renting a room in East bay may be cheap, but you have to consider the quality of life too. I live in the bay area akso (mountain view) and just came back from a 4 day trip to Portland yesterday. Didn’t mind the rain and could totally see myself living in that area someday.
    Also, as soon as your brother have a small family of 3, and is still living in the Bay Area, I doubt he can keep his cost under $5k/month.

    • retirebyforty November 29, 2014, 11:46 am

      We love it here in Portland. The math is more complicated when you have a family. You save on something, but spend much more on others. It’s tough in the Bay Area. The housing is ridiculous.

  • Josh November 26, 2014, 10:22 am

    How old is your brother? Pinkberry and renting a room doesn’t exactly scream second date from any woman in demand. $500/mo for food and entertainment? Does he get free food at work? Or does he bring lunch most days.
    There’s a cost of being so frugal in the long run. Going out to lunch and drinks after work with coworkers and friends costs money but builds camaraderie which is necessary for building relationships. As people age, relationships built with other people will matter more than people realize when they’re young. You’re his big brother. Tell him to stop being so cheap.

    • Ginger December 2, 2014, 4:06 am

      As a frugal woman who lived in the Bay Area, I would have gone on a second date with him. I wanted someone frugal because financial independence is a goal of mine. There are a lot of free/ cheap things to do in the Bay Area, as long as he is not mooching I don’t see a problem with what he is doing.

      • Josh December 3, 2014, 5:28 pm

        Everyone wants to become financially independent, but there’s no point in earning money to lead an extreme frugal lifestyle after certain age. His brother works as an engineer in SV, which means he probably earns six figures. Also he doesn’t sound to be in his 20s any longer. Unless he has lots of debts to pay off, at some point, why continue to live like a poor college student only to continue to amass more money just for old age. Don’t overspend, but just as importantly don’t constantly deny most desire just to save a buck.

        • Ginger December 4, 2014, 8:43 am

          I don’t understand your first sentence, if someone is happy that way, what is the problem? An age does not determine how you should spend, your goals do. And if his goal is to get to independence ASAP he is spending his money exactly the way he should. You are assuming that his other desires are more important than his desire to be FI, why is that?

          • Josh December 4, 2014, 9:32 am

            What I see with most frugal people is a scarcity mindset. They claim they’re happy being frugal, but keep denying themselves of their desires to save a buck. It’s good idea to have decent savings, but go on that big trip and at least get your own place instead of renting a room from someone if you’re over 30. After a certain age, time becomes more important than accumulating money, so that’s why age matters. What’s the point of having muli million after 60 if you’ve being very frugal all your life? To leave an inheritance?
            Instead of being so extremely frugal a better way is for his brother to invest himself in ways to think of ways to increase his income. If his employer allows, he can easily take on contract work to increase his income, or generating online income from a finance blog or something.

        • retirebyforty December 4, 2014, 9:20 am

          He doesn’t have debt, but his net worth is low because he has been working only for a few years. Hopefully, he’ll loosen up once his net worth is more substantial.

          • Ginger December 4, 2014, 10:31 am

            Being financially independent does not mean having multi-millions, it means that your expenses are covered by passive income. I am thirty, my husband is 32 and we have a roommate. We enjoy having him there, he is a friend and I definitely enjoy the extra cash. What is the negative you see in roommate? And why is it that others have to conform to what you think is acceptable behavior for someone of a certain age? And having a roommate often saves time, so I again don’t understand your mindset.

          • Josh December 4, 2014, 12:21 pm

            Obviously we disagree and that’s perfectly fine. Most of RB40 readers and people I know personally who are frugal seem to want to amass multi million dollars net worth while they’re perfectly happy at 50k/yr lifestyle. I would bet his brother is in that category too. That doesn’t make much sense to me unless they plan to leave a huge inheritance or just are paranoid about running out of money. Spread the wealth and help the economy out, especially the mom & pop business.

  • Justin @ Root of Good November 26, 2014, 10:04 am

    Probably. If we are talking just me as a single guy and not me and Mrs. Root of Good and 3 kids. We manage to live on about $500 per person in Raleigh, NC, and I could probably hit $1250/mo in Silicon Valley and live a similar life to your brother.

    Oddly enough, I just finished a wonderful lunch of spicy tom yum noodles and a sliced up apple. The noodles were ramen style, but not the cheap 6 for a dollar kind (which are good too!). These are 3 for a dollar fancy kind imported straight from Thailand and include the lemon grass spicy paste, the seasoning packet and the chili powder. That plus a sliced up apple made for a great meal at under a buck (though I might be hungry before dinner).

    I love Chris’s take on spending more: “I don’t believe spending more money and “living it up” would make me any happier in the long run”. I subscribe to that theory as well. I could spend double what I do now and might only be a tiny bit happier. I already allocate my spending to the areas that bring me the most joy.

    A house twice as large or twice as nice wouldn’t mean I’m able to enjoy life much more. I only occupy one room at a time and I rarely find myself ogling the beauty of my interior spaces.

    A luxury car instead of an old honda civic wouldn’t make much difference. I rarely drive my car because I possess the luxury of living near almost everything so I enjoy walks for most of my trips. Whenever I rarely find myself stuck in rush hour traffic, I don’t think sitting in a luxury car would make the experience any less frustrating.

  • Tawcan November 26, 2014, 9:40 am

    Smart guy for living frugally. Maybe don’t spend more on dates, you don’t want to get a girl that think you’re an extravagant spender.

  • SavvyFinancialLatina November 26, 2014, 9:17 am

    It’s awesome your brother is being frugal. $1,250 is super cheap!

  • davidmichael November 26, 2014, 9:08 am

    Amazing! Having lived and worked in Palo Alto for 20 years, I am amazed that anyone can live that cheaply in the Bay area. I remember paying $10 for a Danish and coffee in a local bakery on my last visit. The rents are typically $2000 and up for a one or two bedroom apt. And, my home, which was $37,000 in Los Altos in 1967, went up to 2.5 million over a 30 year period and then paved under to make way for a modern 5 million dollar home.
    Crazy down there! But…the Bay area has great weather and job opportunities. Plus horrendous traffic.

    I left in the middle of my career and moved to Eugene, OR and never looked back. Hated to give up a great teaching job, but I love the Oregon lifestyle. Money was way down on the list of considerations. I always felt I was a prisoner living in a rarified atmosphere of Palo Alto-Los Altos where driving to the Sierras took anywhere from six to 12 hours one way. Finally the traffic drove me out into a more sane and simpler lifestyle. Today I can travel to the coast or Cascades in an hour or so with little traffic to block the way. And two rivers with great rainbow trout fishing cut through town. Not to mention Oregon Duck football.

    I have the greatest respect for anyone who can live on less than $2000 a month in the Bay area. Bravo!

  • CL November 26, 2014, 8:07 am

    I love this budget, because I’m increasingly worried about the slum, The Jungle, in San José. It’s really good to see that your brother is living on a reasonable amount. Who knows, he might hit FI before he has kids!


  • Kate November 26, 2014, 7:58 am

    Inspiring post! I also live in CA and we’ve been discussing relocation to a more affordable location but I’m having a difficult time dealing with the idea of leaving my grandchildren. Your brother has inspired me re-think the idea and see if there are any other ways we can scale back living expenses. Housing is the big ‘kicker’.

    I especially like his dating budget and philosophy behind it. His method gives him the best opportunity for finding someone as genuine and authentic as himself.

    Thanks again!

  • bill November 26, 2014, 7:41 am

    that’s for a single guy that rents a room. good luck with a family of 4

  • Emily @ Simple Cheap Mom November 26, 2014, 7:33 am

    I think he’s doing great by recognizing that he can rent a room with a friend he likes instead of needing his own place. Housing is our biggest expense and I think that’s where he’s saving the most. We had friends rent rooms from us when we first bought our house and I loved having friends around so close, and they liked the cheap rent, it worked for us too. Sounds like he’s well on his way to financial independence!

    • nicoleandmaggie November 26, 2014, 8:39 am

      $550/mo is a pretty big discount for that room– our friends in silicon valley get >$100/night for Air BNB guests, and that’s what my sister charges for a room in her house in a much less expensive part of the country.

  • [email protected] November 26, 2014, 7:29 am

    So if Chris can get by off of $1,250 in Silicon Valley, I should be living like a king in Metro Detroit. It’s very inspiring to see someone live off of 15K/year in California. What’s the poverty line for America, 25K?

  • nicoleandmaggie November 26, 2014, 7:18 am

    I couldn’t– that’s about what daycare costs per month. There would be nothing left for food or rent! (Of course, there are four of us.) I’m guessing living in the bay area will cost us around $5-6K/month ($3-4K for housing, 1.5K daycare, then everything else), not including taxes or insurance.

    • retirebyforty November 26, 2014, 10:43 am

      Yeah, it’s much more difficult when you have a family.

  • Dave in Sunny FL November 26, 2014, 7:13 am

    Medical expenses? Visit to the dentist? Health insurance? If he’s relying on his strong income, he should have disability coverage in case he loses his ability to work, too. I don’t know what he’s doing with the difference between his income and his spending; but if he’s not banking or investing it, he’s living on a knife’s edge.

    • retirebyforty November 26, 2014, 10:42 am

      He’s pretty young so he doesn’t have to go to the doctor much. He really should get some disability insurance. I’m sure he has some with work, but it’s probably a good idea to get a bit more.

  • craig November 26, 2014, 6:41 am

    Will $1250 take you much further at other US locations?
    I think the quality of life will be similar at this budget for singles anywhere.

  • Financial Samurai November 26, 2014, 4:25 am

    Wow! Now that is frugal and inspiring!

    It also helps prove the point that the SF Bay Area is an inexpensive place to live if you want it to be!

    Sounds like you have inspired Chris, Joe!

    • retirebyforty November 26, 2014, 10:41 am

      He isn’t spending much at all. That’s pretty amazing.

  • Petrish @ Debt Free Martini November 26, 2014, 2:28 am

    Chris is a smart guy and he is making really great choices. I don’t know why most of us Americans need so many possessions just to feel comfortable. Since I have adopted a frugal mentality I realize how foolish I have been in my early 20’s. If I thought more like this guy, I would be a lot better off now.

    • retirebyforty November 26, 2014, 10:41 am

      It’s really important to get the frugal spending habit down in your 20s. You get such a huge head start if you start saving and investing early.

  • Ernie Zelinski November 26, 2014, 1:10 am

    Joe, I agree that your brother is doing great living the frugal lifestyle with the goal of being semi-retired and financially independent by the time he is 50.

    You say, “I think he should splurge a bit when he goes out on dates, though.”

    Actually, I think that Chris should splurge more — but not on dates. In fact, dating expert David deAngelos advises guys to spend very little money or none at all on first and second dates. Meeting for coffee or in a park makes it a lot more casual and places a lot less pressure on the guy than meeting for an expensive dinner. A casual and cheap atmosphere also makes it easier for a quick and easy getaway if things are not going well.

    Having said that, I agree that Chris should learn to splurge more on himself.

    These quotations offer some food for thought:

    “He neither drank, smoked, nor rode a bicycle. Living frugally, saving his money, he died early, surrounded by greedy relatives. It was a great lesson to me.”
    — John Barrymore

    “It’s better to live rich than to die rich.”
    — Henry David Thoreau

    “It’s a wise man who lives with money in the bank; it’s a fool who dies that way.”
    — French proverb

    “To die rich is to have lived in vain.”
    — Jiddu Krishnamurti

    “Thy money perish with thee.”
    — New Testament

    “We deny ourselves the smallest comfort or pleasure; even if it only costs a few dollars. This is not prosperous spending. Prosperity says you can have red bell peppers instead of green, rib eyes instead of sirloin, and romaine instead of iceberg. It’s not about spending everything you make, but enjoying what you do spend without felling guilty about it . . . The positive feelings and emotions that prosperous spending brings is what attracts more positive things in your life.”
    — Joe Vitale

    “If you can’t enjoy spending money with the same satisfaction that you experience while earning it, then your prosperity consciousness needs some serious work.”
    — from “Life’s Secret Handbook”

    In short, what these quotations tell us is that there is only one ultimate purpose for money — and that is to spend it! And spending money is made more enjoyable by splurging on oneself occasionally.

    Ernie J. Zelinski
    The Prosperity Guy
    “Helping Adventurous Souls Live Prosperous and Free”
    Author of the Bestseller “How to Retire Happy, Wild, and Free”
    (Over 225,000 copies sold and published in 9 languages)
    and the International Bestseller “The Joy of Not Working”
    (Over 275,000 copies sold and published in 17 languages)

    • retirebyforty November 26, 2014, 10:40 am

      That’s what I meant. He should spend a bit more on himself. Going out is fun and you should enjoy it while you’re young.
      This quote is me – “If you can’t enjoy spending money with the same satisfaction that you experience while earning it, then your prosperity consciousness needs some serious work.”
      — from “Life’s Secret Handbook”
      I really don’t enjoy spending money as much as earning it. I’ll have to work on that.

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