This article was written and originally posted by The Financial Diet in partnership with M&T ��������.

I lived in D.C. for five years and spent four of those working for a community health center that I love dearly. I started at an entry-level job there in 2015 and worked my way up to earn $47,000 a year in 2017.

By Sarah Doyel

March 18, 2020

We partnered with The Financial Diet to bring you a series of smart savings tips from real women who’ve made their money work for them. We’ve always focused on bringing you personalized money success stories (and learning experiences!) because, at the end of the day, there is simply no one piece of generalized money advice that’s going to apply to absolutely everyone. At M&T we don’t believe in a one-size-fits-all approach to finances, because everyone’s situation is different. We take the time to understand what’s important to our individual customers so we can help with their specific needs and goals.

Washington, District of Columbia: Land of cherry blossoms, happy hours, and bros in J.Crew button-downs who ask “So, where do you work?” before they even know your name.

I lived in D.C. for five years and spent four of those working for a community health center that I love dearly. I started at an entry-level job there in 2015 and worked my way up to earn $47,000 a year in 2017. My 2017 tax return shows that my take-home pay after withholding was $38,682.83. I left my job at the end of October that year to travel, so my total monthly take-home pay was $3,868.23, or my annual pay divided by ten months.

This is how I spent my $3,868.23 monthly take-home pay in D.C.:

Healthcare

I’m listing this expense first because the vast majority of my healthcare spending is already accounted for in my total net income figure. I enrolled in health, dental, and vision insurance through my employer and had the monthly premiums for each deducted directly from my paycheck twice a month. My health insurance cost $100 a month, and I paid about $30 for my dental and vision combined.

This may come as no surprise given that I worked at a health center, but my employer’s health insurance was amazing. As in, better than my six-figure-earning boomer parents’ insurance amazing. I saw hundreds of different health insurance plans in the years I worked there (I was basically a professional insurance nerd), and not a single one was more comprehensive or cost-efficient than the one my employer offered. I say this because it means that other than my still-pretty-low monthly premiums, my health care costs were minimal. I paid $10 for primary or specialty medical visits, including labs, and my dental exams were free. The fact that high-quality, inexpensive medical care is a luxury still boggles my mind, but it’s true.

I also spent $10 a month for my prescription maintenance medication and $16.50 per weekly therapy session after I got reimbursed. When I first moved to D.C. and had terrible health insurance at my first job, I paid more for my mental health care on a monthly basis than I did for my rent, so this is a huge improvement.

Total: about $85 a month

Retirement

I also signed up to have my retirement contributions deducted directly from my pay, so my retirement savings are also already included in my take-home pay. I allocated 10 percent of each paycheck to retirement, and in retrospect, I wish I’d saved more.

Pro tip: Planning for tomorrow begins today. One of the biggest financial mistakes people can make is not planning for retirement. We are here to help you plan for the future with products, services, and experience you can trust. You can be confident knowing you’re working with a local team that is dedicated to going above and beyond for our customers. M&T ��������’s teams of professionals will listen to your needs and help you find retirement solutions that are compatible with your current financial picture and your long-term goals*.

Housing

Washington ranks consistently in the top four or five most expensive cities for renters in the United States, along with San Francisco, Boston, and New York City. The median rent in the D.C. metro area was $1,361 a month for a 1-bedroom apartment in January 2020, and that’s including the more affordable Virginia and Maryland suburbs outside the bounds of the District. Want to live in a centrally located neighborhood near restaurants and nightlife? Chances are, a studio will run you about $1,500 to $1,800 a month, and a 1-bedroom could easily go for $2,100 to $2,300.

So what do Washingtonians do in order to find affordable housing in the District? Many, especially longtime residents, have had to leave. Gentrification is a huge topic of conversation in D.C., and for good reason.

For those of us who stayed or were new to the city, group houses are the answer to that question. I lived in a 3-bedroom rowhouse for most of my time in the city that I shared with two other housemates. The house was a hundred years older than me and frequently fell apart in various ways, but it was inexpensive and in a lively neighborhood with tons of local eateries, bars, and shops. I lived in two of the three bedrooms over the years and paid $575-$750 a month for my room, depending on which one I was in at the time. Those amounts are significantly cheaper than the $900 to $1,300 range most of my friends paid for their rooms in shared houses or apartments, and the hallway ceiling literally caving in at one point was a small price to pay.

Total: $662.50 per month (average between my two rents)

Pro tip: M&T is dedicated to helping you finance your dreams. Every borrower has different needs. That’s why M&T offers such a wide range of home buying and refinancing options — with experienced representatives — to help find the right solution for you**.

Utilities

Many D.C. transplants will beg to differ, but the weather there really isn’t that extreme. Sure, summer is hot and winter is cold, but isn’t that the way things should be? (Climate crisis notwithstanding. Yikes.) My house had radiators in most of the rooms for heat and window units in the bedrooms and living room for air conditioning. I paid an average of $22 a month for gas and $20 a month for electricity. Water cost me about $40 a month, and we maintained paying $28 per person for Internet and a modem rental by periodically calling Comcast and threatening to leave whenever they increased our rates.

Total: $110 per month

Transportation

I love my home region of Southern California a lot. I do not, however, love the car culture there. After four years spent living in Los Angeles during my college years and borrowing cars from friends and family, I vowed to move to a city where I wouldn’t need a car once I graduated. D.C.’s public transit system has been the subject of criticism among city residents for a long time, but it’s a paradise for someone raised in a town where you can’t even get an order of fries without getting in the car or walking 2.7 miles.

I was even luckier than the average resident and lived a 20-minute walk away from work, so most days I didn’t even use public transit. When I did, I had two Metro and several bus lines right next to me. I filled up my SmarTrip transit pass on a monthly basis for less than the cost of the average DC restaurant meal. I rarely used ridesharing apps like Uber or Lyft and probably took two or three rides a month when I’d had one too many glasses of wine or worn one too few layers to want to walk home.

Total: $60 per month ($30 for public transportation and $30 for Uber/Lyft)

Groceries

Ah, groceries. My best friend and my worst enemy. I love to cook and would often have friends over for dinner rather than go out, which was definitely a boon to my budget. I also often made the common money mistake of choosing an elaborate recipe that resulted in one-time ingredients languishing in the back of my pantry or fridge. On top of that, I’m vegan, which doesn’t have to be more expensive, but it certainly can be. I occasionally fell prey to the sexy store-bought versions of vegan substitutes I could easily make at home for way less.

Total: $300 per month

Personal spending

This whole article is about my personal spending, but this particular category encompasses all of the smaller line items in my budget that might be categorized as “discretionary spending.” A girl’s gotta eat and have a roof over her head, but those tiny succulents I kept buying at Trader Joe’s and weekday happy hours weren’t exactly necessities. The biggest chunk of my discretionary spending went towards eating and drinking out at restaurants, bars, coffee shops, and the occasional late-night greasy spoon (I miss you, Amsterdam Falafel). I’ve never been someone who feels compelled to try out all the latest hotspots, but much of the social life in D.C. takes place out and about.

I countered my food and drink spending by keeping other costs (like fitness, personal grooming, and clothing) relatively low. I ran, and I did a work-exchange at a yoga studio for free classes. I kept my hair short, even buzzing it myself once. I did clothing swaps with my friends and shopped mostly at secondhand and thrift stores. Other than going out with friends, I didn’t spend much to entertain myself in D.C. since there’s so much to do that’s free: museums, picnics in Malcolm X Park, hiking in Rock Creek, outdoor concerts in the summertime. Protesting and organizing is also free and usually fulfilling, if not always fun. I spent a lot of time doing that. It is D.C., after all.

Other than that, I used several subscription services like Netflix and Squarespace and made a few of those miscellaneous Target purchases we all know so well. I spent a fair amount on gifts for loved ones and both monthly and one-time donations for causes I care about.

• Eating out: $200 per month
• Fitness: $0 per month
• Skincare, makeup, and grooming: $50 per month
• ����dzٳ���:��$40 per month
• ���Գٱ���ٲ����Գ���Գ�:��$55 per month
• Subscription services: $43.17 per month
• Miscellaneous/”oops” purchases: $40 per month
• Gifts and donations: $170 per month

Pro tip: Discover unique insights about your personal spending habits with M&T Money Smart™,��a tool that can help you manage your money and simplify your finances. M&T Money Smart™ lets you keep track of your finances through an easy-to-use dashboard where you can set goals, track your transactions, customize your budget, and more.

Travel

Other than my basic needs like housing and healthcare, travel is by far the most important category in my budget in terms of my values. It is also the most expensive. I’m from California and my family still lives there, so I usually bought one or two cross-country round-trip plane tickets a year. I also visited friends a few times a year, which sometimes meant a bottom-of-the-barrel Megabus ticket to New York City for $12 and sometimes meant a plane ticket for hundreds. Unless I was going to my parents’ house, travel also meant more meals and drinks out, extra costs for entertainment or activities, and additional transportation costs.

I made the major budgeting mistake of not setting aside a separate checking account to create a sinking fund for travel expenses, so I don’t have an exact record of everything I spent in this category. If I had to guess, I’d say I probably spent around $3,500 a year on travel, or just under $300 a month.

Total spending: approximately $300 per month

Adding it all up

In total, I spent $2,115.17 a month, which left me with $1,753.06 from my take-home pay. I saved this money, regrettably, in a checking account that paid me no interest. I’ve since learned the error of my ways and opened a high-yield savings account. I later spent much of my savings on six months living in Spain, during which I had no steady income but an infinitely steady supply of cheap wine, tapas, and new friends. I don’t regret the decision to spend my savings on travel, though I made more than a few mistakes along the way. Coming back to D.C. and achieving a higher-earning job later on, however, made replenishing my savings much easier than it would have been if I’d kept earning $47,000 a year.

For access to additional financial education resources, for wherever you are in your financial journey, visit our Financial Education Center.

Like this story? Follow The Financial Diet on Facebook,��Instagram, and Twitter for daily tips and inspiration, and sign up for our email newsletter here.

Individual circumstances may vary and additional terms and conditions may apply, please consult a tax advisor regarding specific tax effects.