How I Budget My $2,200 Monthly Income While Living In Los Angeles

A few weeks ago, I moved a few thousand miles across the country for my first post-graduate, real-world, big-kid job. It’s been a really exciting and only slightly terrifying experience. I’m all set to get my first paycheck at the end of this week, so here’s how I’ve set up my imperfect, first-draft budget. I know this will change over the next few weeks as I adjust for different expenses, but here’s how I’m starting.

Paying myself first

First, my monthly take-home pay is about $2,200, split up into two paychecks per month, so I created a budget for $1,100 per paycheck. I can divide my direct deposit up to six ways through my company’s HR portal, so I started with my three automatic savings accounts and sent the rest to my general checking account at Wells Fargo.

1. Emergency savings account with Capital One: $100
2. Roth IRA retirement account with Fidelity: $50
3. High-yield savings account with Goldman Sachs: $50

It was important that I paid myself first, and by automating my savings, I have no excuses for not consistently building up these accounts. An emergency savings fund is my biggest priority right now. Once I save three months of living expenses, I will decrease the emergency savings automatic contributions and redistribute the money I normally would have sent there to my high-yield savings account and my Roth IRA. I realize $50 isn’t a whole lot, but I think it’s important to get into the habit of saving money, so I’m starting now regardless of the amount. And, outside of my long-term savings accounts above, I have a savings account and a second checking account with Wells Fargo, into which I manually transfer funds depending on the category.

Budgeting “sad money” from each paycheck

After my savings, I have $900 left to work with each paycheck, which is the amount that’s directly deposited into my primary checking account. Next, I budgeted for my fixed expenses: student debt, rent, car insurance, and my website subscription, which are all due on the first of the month. I calculated the total amount due each month, take out half of that amount from each paycheck, and transfer it to my aforementioned second checking account at Wells Fargo. I like to call this my “Sad Money” account because it’s solely a place to hold the funds that go towards all of the sad things in my life:

Student debt: $50

I didn’t take out college loans with an institution, but I did borrow from the Bank of Mom and Dad. Thankfully, they don’t charge interest and I pay them $100 total each month via Zelle. I know how lucky I am to have such a low monthly payment, but I’d like to increase this amount because the sooner I’m debt-free, the better!

Rent and utilities: $550

My portion of the rent is $1,100 each month, which includes the gas, WiFi and electricity, for the 2-bedroom/2-bathroom apartment I share with a roommate (I live in a suburb of Los Angeles, and trust me, that’s considered “affordable” around here).

Car insurance: $40

I’m really proud of owning my car outright – my name is on the title and everything! – and being responsible for the monthly $80 insurance is truly the most “adult” feeling I’ve had to date.

Squarespace website: $8

Having a personal website for my portfolio and reel was a necessity in my academic field as I transitioned out of college and into the professional arena. I don’t share it nearly as often now that I’m employed and not actively job searching anymore, but it’s still good to have. I’m figuring out how I can expand my website to make the $16 monthly subscription fee worth it until I’m job searching again.

Budgeting with two checking accounts

At this point, I’ll transfer $648 into my “Sad Money” fund and have $252 left. I don’t have a debit card for my “Sad Money” account, because it’s just for the bills that I pay online. Everything else that I budget for will come out of my general checking account.

A girl’s gotta get to work and put food on the table, so gas and groceries are next. These categories are the most flexible because I’m still trying to figure out how much I should expect to spend each week. I do know, however, that the cost of gas doubled when I moved from Ohio to California, and $4.19 for a gallon of gas makes me want to cry every time my I pass a gas station. It costs me about $50 to fill up my tank and I’ve been filling up once a week so far. My average grocery costs are also about $50 a week because I meal prep religiously, but my grocery prep is a story for another time. To make things easier, I’m sticking with the $50/week for gas and groceries, and I prefer to pay for these categories in cash because it’s easier to hold myself to a budget if I physically hand over the money each time. There are plenty of fee-free drive-through ATMs in my area, so it’s convenient to take out $200 in cash every pay period for gas and groceries.

That leaves a whopping $52 of fun money, folks! I’m basically rich! I know unexpected expenses will occur and I’ll probably need more gas money from time to time, so I’m not budgeting this $52 down to the dollar for now. It’s what I’ll use if I grab drinks with friends, want to get my nails done, catch a movie, or something like that. Anything that I don’t use from this fund will go into my short-term savings account for things like flights back home or new furniture for my apartment.

At this point, I’m safely covering my bare minimum, non-negotiable expenses and putting away a little bit into different savings with each paycheck. Soon, I will need to figure out where medical expenses, like new contact lenses and the inevitable doctor appointments will fit into my budget. But I’ll use my emergency savings to cover any of those costs that might arise until I’m a little more settled into my budget. I’m really eager to see how this budget holds up in real life… and in the meantime, I’m going to go find a side hustle.

Taylor Alexander hates the word “adulting” but is learning how to do it anyway. You can see more of her work at www.tayloralexandermedia.com.

Image via Unsplash

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