“How much should I save before moving to Los Angeles?” is the most common question I hear.
Anywhere on the web, you’ll hear a bunch of ambiguous answers:
- “Save up for at least 3 months”
- “Save a year’s salary”
- “You want to have at least $10K in the bank… $20K if you can swing it”
I wanted to remove the guess work for you — which is why I created a “Moving to LA Calculator.” If you haven’t downloaded yet, you can download it here (downloads an excel file).
Three things to remember before you start:
- Don’t treat the final number as the “be-all-end-all” number.
It’s not. It just gives you a concrete and realistic goal to hit.
- Use the calculator as a GUIDE.
In other words, don’t worry whether a number in the “Variable Costs” column should actually be in the “Fixed Costs” and vice versa. It doesn’t matter. You’re trying to budget your move to LA, not pass a CPA exam.
- “What if I don’t know how much X costs?”
Whenever possible, use PAST BEHAVIOR to determine these costs. For example, if you paid $400 in groceries last month, don’t count on magically cutting that number in half to $200 when you move.However, for certain numbers (gas, electric, etc.) you will be making your best guess. That’s okay. Remember, this is a guide: You can always change the numbers as you gather more information (I included a sample calculation based on my current spending habits so you could see it in action).
- Play with the numbers.
You may realize, “Oh, I didn’t realize I needed to account for this” or “Hah, I would never pay for the gym — that Chris guy is a fool.” The calculator is robust, so make it work for you.
Feel free to share the calculator with anyone you think it may help.
Any questions or suggestions on how to improve this, please email me anytime: chrisming [at] fightingbroke [dot] com.
(You can download the calculator here.)