Has this happened to anybody else? Since I got into the workforce about 10 years ago, the entry-level salary I had back in 2003 has nearly tripled. And though I've continued to contribute to 401ks over the years (where I had them; not all my workplaces did, including one I was at for 4 years, which means my 401k isn't in as good as a place as I'd like it to be), my other savings accounts have really not grown in the way I'd like them to. And I can't figure out how to make this happen, short of winning the lottery or having a fairy godmother leave an enormous bag of cash under my pillow one night.
I've been a lot more diligent about tracking my expenses and income since 2010, when I turned 30 and promised myself I'd be better about my finances. That year, I also started an extra savings account that gives me emergency padding and lets me take extravagant vacations when I want to. (The fact that I travel as much as I do plays into this whole lack of savings thing.)
But the fact is that I'm struggling to keep the savings accounts I have growing, even though I make so much more money now than I ever did before. The biggest culprit of this that I can see? My rent. It just. Keeps. Going. Up.
It's no shock to anybody that DC is a high-rent city; it always has been. But when I really look closely back at my trajectory of paid rent it grosses me out and makes me hyperventilate at the same time.
When I moved out of my parent's house in 2004 (a year after I returned from a post-college year in Italy and got a job), I moved in with 3 girlfriends into a house in East Falls Church. I think I paid something like $400. We each had our own bedroom and a large yard.
Then I moved into DC with an ex and a friend; a 2 bedroom in Shaw. I think my share was like, $700. I can't remember exactly.
Then I moved to Chicago for grad school and paid $650 for a one-bedroom in a great neighborhood.
Then I moved back to DC and paid $400 for a (very tiny) bedroom in the infamous and glorious flophouse.
This is where the money issues really start. I decided I was ready to live by myself and moved into a great basement apartment in Bloomingdale that I paid $1100 for. It was really a steal considering how cute the place was and the location (basically next door to Big Bear Cafe). That was a huge leap in rent, but my income had sufficiently risen to that point where I could take it on.
After a few years there, I moved in with my ex and we paid AN EXTREMELY LARGE AMOUNT OF MONEY for a nice 1 bedroom right in Logan Circle. It was $2350. $2350!!! Can you imagine? But, given that we were splitting the rent, it didn't really change what I'd been paying for rent overall or impact my budget.
Then, when we split, I'd become so accustomed to a) living without roommates 2) living in a great neighbhorhood that I went and found and rented a good 1 bedroom place in the 14th and U neighborhood that now runs me $1700. Ugh. (BTW, that is relatively cheap for the area. And also BTW, it was cheaper than anything I was able to find in Bloomingdale.) I'm used to a certain quality of life/location in my residences, and I'm clearly paying for it.
But in the past year, as I've seen my savings accounts stay relatively stagnant, and realized that I've paid OVER TWENTY THOUSAND DOLLARS IN RENT IN ONE YEAR, I'm starting to take a harder look at what I might be willing to/able to change in terms of where I live.
I'm not sure I ever actually want to own real estate, but it'd be nice to at least have enough savings to one day theoretically be able to put a down payment on a house or apartment should I so choose. Or, like, to travel the world or whatever. And after reviewing my finances, there's basically just a few ways to do this:
-No more international vacations until this money is saved, or, really, vacations at all
-I've got to somehow reduce the amount of money I spend on rent
I do dine out and pay for movies, concerts, books, etc, but it's not an excessive amount and not enough to really change anything should I indeed actually cut out all socializing/eating/drinking out. Which would also make life miserable.
So, reducing rent. It's not as easy as one might think, especially in the DC area. There are three things I could change about my rent situation to reduce its costs: living with roommates; downsizing to a studio; and/or changing my location.
Size: I could live in a studio. In fact I would sort of relish the downsizing of material items I own to make that happen.
Roommates: Blergh. Not that I haven't had great roommates, but in my old age and years of solo living I've become quite particular in my ways, weird habits, cleanliness levels, etc. I just don't know if I can do it again. If the right situation came up, and if I knew it was just for 12-18 months while I saved enough for a down payment, it could possibly be tolerable.
Location: I'm somewhat amenable to changing this. I mean, I could move back in with my parents, I guess. (Hi mom and dad!) And pay zero rent. But that would be incredibly tough, and I imagine isolating.
I could also move to (gulp) Northern Virginia or (smaller gulp) a more-remote part of DC, like Brookland or Van Ness.
Any way you look at it, though, it involves some serious sacrifices (I mean, relative sacrifices, that is; it'd be moving to another area, not giving up a kidney or, like, my first-born). But still -- it's sacrifices about the way I've gotten used to living my life. And even though it wouldn't be forever, and ideally would be short-term, I'm a person who's used to instant gratification, an easy commute, close-by bars/restaurants/friends, and it would be a difficult change.
So! As you can tell by the jumbled mess that is this blog post, this is a subject on which I'm just starting to gather my thoughts, and a process I'm not sure how to best move forward on.
The tl;dr version? I want to start saving money to buy some real estate (or, do something), and I've realized I've got to make some relatively drastic-to-me changes in my current living situation to facilitate that.
Thoughts, ideas, experiences, bags of money all welcome.