Words of wisdom from Miss Mazuma when I got too caught up in the noise from one person’s opinion.
The past couple of weeks, there was a lot of chatter (mostly sometimes heated) about what is needed income-wise to be considered middle-class. I think I heard maybe $300,000? Could be a rumor. 
Now, I’m not going to dispute anything that was said, but I do want to provide another perspective of what it’s like to NOT live on a huge income in a very expensive city. For me, that’s Los Angeles.
We live in a world with 7 billion unique individuals, and no two people – no two stories will be the same. No two experiences will be the same. And no two combined household income and expenses will be the same either.
Post breakup trip to Hawaii in Nov 2007
My history, journey, experiences, mistakes and successes are all based on the luck/curse of my DNA (hi mom and dad), and every choice I have made since I was launched into the world 40-something years ago. Although I’m sure I didn’t make any financial decisions until I was at least 5.
I could go way back to let you in on how much debt I had in my 20s and early 30s, and what my income was at my first several jobs, but I sincerely don’t remember. If I had to guess about debt, it was probably around $20,000 (credit card and car loan) at some point, with my salary as a video professional averaging around $35,000-$45,000 in my 20s and early 30s.
In my mid to late 30s I started making in the $70,000 range, which you will see outlined below.
During most of my working career, I paid little attention to money. But, I wasn’t struggling. I mean I knew I could have saved more money, but hey, I was just out there enjoying life.
I do not remember my savings rate, but I did contribute something to my 401k.
I’ll never forget the day I moved into my apartment in El Segundo in November 2007 (where the COL gets an F), my friend who was helping me move told me he got an email that we were probably going to get bought out by another video game company, which probably meant layoffs.
I signed a year lease for $1,450 and at the time I paid for gas, electric, and cable/internet. Luckily, with Southern California weather the first two are not that bad most of the year. But I was still worried!
I was sort of lucky in that I had until September of 2008 to save money before I was officially laid off, then had 6 months of severance, which was damn good compared to most people who got laid off during the recession.
I also pulled some double duty and got big freelance jobs straight out of the gate. I had also saved ALL of my vacation time to get that payout as well, so I thought I was rolling in the dough. I was an idiot.
Playing in a CBVA beach volleyball tournament in Long Beach. It was so hot that day!
This is the part of the story that my longtime readers know. I had been dumped by my boyfriend of 5 years a year earlier and had now lost my job, so I was kind of depressed. But, earlier that year I discovered beach volleyball. It was my drug of choice and I became so obsessed that I let my hefty savings drain to nearly nothing.*
I didn’t touch my investments early on, but towards the later years of freelancing I did have to dip into my brokerage account.
At the same time money was flying out the door, the recession took hold and nobody was hiring (full-time or freelance).
For the next 7 years I was stuck in a pattern of living paycheck to paycheck. I cut way back on spending, but it was almost like it was too late.
My landlord did drop my rent to $50 less and took over the gas payment, and I had long since cut my cable, but it was still a struggle to keep money in my main accounts.
I think the one thing I could have easily done, but didn’t, was give up my apartment and move in with a roommate (although I thought about it many times). I accept the choices I made because anytime I thought about it, I literally had a nervous breakdown. I was over 40 and done with roommates.
I started my blog and found other ways to earn income, including coaching beach volleyball, babysitting, sponsored posts, helping my friends out with their companies/businesses, and last but not least, cleaning my friend’s disgusting toilet.
I’m scrappy I’ll tell you that. And I’m sure my friends in real life who read this post will finally understand why I laid low in my apartment and said “no” to so many things.
Here is a breakdown of the income I earned since I moved to LA, and how much I was paying in rent each year:
Rent: (Shared 2-bed, 2-bath in Marina del Rey): Aprox. $925-$950
View from my Marina del Rey apartment
- 2003 (Age 33): $74,009 – moved to LA from Seattle as part of a job relocation. They gave me a bonus to move.
- 2004: $55,024
- 2005: $60,983
- 2006: $75,075
Rent (Jr. 1-bed, 1-bath in Playa del Rey): $1,350
My 2nd apartment located in Playa del Rey. Tiny!! But cute!
- 2007: $76,804
Rent (1-bed, 1-bath in El Segundo): $1,400-$1,450
- 2008: $100,842 – Sept 2008 I was laid off but I did double duty with severance and a huge freelance job.
- 2009: $37,138- Freelance
- 2010: $30,160 – Freelance
- 2011: $23,468 – Freelance
- 2012: $24,387- Freelance
- 2013: $42,874 – Freelance
- 2014: $32,981 -Freelance
- 2015: $27,014 – Freelance
Finally, my financial struggle came to an end in December 2015, when I got my current full-time job.
I wish I could tell you what I make, now but that would be frowned upon. What I can tell you is that it’s comfortable, but less than 100k. I also make a pretty much guaranteed $3,300 in passive income each year.
With side hustles I may make around $2,000 on my blog, depending how lazy or guilty I’m feeling about sponsored posts, which makes up pretty much 100% of my blog income. I also might make another $1,000 in video work…again, depending on how much I want to spend time on that working nights and weekends, which, has been not much lately.
My 40th Birthday. We went to the Ellen Show!
I wish I could give you an accurate amount of money that I spent during those years, but I didn’t track much. I had a budget, but I called it more like “wishful thinking.”
I mostly spent wisely over that time but I still did some dumb-ass stuff like taking life coaching courses, thinking that was my calling in life. Clearly, I’M the one who needed help! I also did travel during my low-income years as well, but it was minimal.
And, I also had some unfortunate things happen, like my car dying in the middle of the 405 freeway in rush hour traffic in 2014. I ended up buying a used Rabbit (which I still have and just paid off!) for around $9,000 and yes, I financed it but for a very low rate. One thing I had going for me the whole time was awesome credit!
I didn’t track my net worth prior to getting my full-time job, but when I did start tracking, it was around $140,000. Today it stands at $266,000…oops $263,000 (stupid stock market!).
My rent is still $1,450 thankfully, because the area I live in is exploding with hi-tech companies (known as Silicon Beach) and this area is not rent controlled. I’m hoping it’s because I’m a model tenant who has lived here for 10 years.
Expenses:
According to Personal Capital, I spent $53,000 last year. Now, the only thing I don’t like about PC is, let’s say you go out to dinner with your friends and they all have cash but you have a credit card. You offer to put it all on your card and take the cash. PC doesn’t know this, so it might look like you spent $100 or more on a dinner, when that isn’t accurate. Does anyone else have a workaround for this?
Anyway, let’s just say it is around that amount.
$17,400 went to rent, and $369 towards electric. Rent was by far my biggest expense. Second to that this past year was travel, and I spent more (not using any kind of credit card rewards) on that this past year ($6,208) than other years because I took a big trip to Europe. No regrets!
Saving:
- 401k: I contribute 13% of my income to my 401k – not quite maxing out. My company matches.
- Brokerage account/Emergency fund: Currently saving $1,388/month to either account, depending on what needs filling. Currently my emergency fund needs attention because I use that to contribute to my Roth IRA.
- Vacation: $120/month.
- Digit: It varies based on my spending algorithm. Anywhere between $200-$800/month. I use this account for a variety of things like travel, emergencies, big expenses that happen infrequently, etc.
- Roth IRA: $5,500 annually.
Free whale/dolphin watching with my mom thanks to my friend Jon.
Right now I would say my lifestyle is pretty comfortable. I spend money on wants, but nothing too extravagant. I try to optimize spending where I can, but in some cases I spend more than other people perhaps would (hair, food, health/fitness).
I strive towards frugality because it wasn’t that long ago when I was very financially stressed. I learned my lesson the hard way, and although my friends sometimes give me crap for being “stingy,” I don’t ever want to repeat going through that experience again.
I’m not here to tell anyone else what to do and how to live their life, because in reality people are going to do whatever they want. Sometimes people DO need to learn for themselves.
My situation is way better than some, and way worse than others. I have lots of aerospace engineer friends doing very well and who own homes nearby and hardly spend any money, and I know people making a lot less than me taking fancy vacations and eating out every other night.
You gotta do you!
I just wanted to present one person’s real-life scenario of what it’s like earning far less than “middle-class” income while still living in an expensive city.
Cheers!
*ETA: I did finally come to my senses and stopped playing tournaments and paying for classes. Actually, thanks to some generous friends and coaches I got a lot of training for free. And I never really enjoyed tournaments that much to be honest. I just want to hang out with friends and play (for free).
