webatManaging your finances in a high end state like California can be a bit tricky. Sales tax is at 7.5% and its marginal income tax rate is at 13.3%, according to Smart Asset. Where I am from, Minnesota, the marginal tax rate is at 9.85%, the fourth highest in the nation. However, there is no sales tax when it comes to shopping for food or clothes (I do miss that). I had to learn some things the hard way coming to SoCal but there is a way not to live paycheck to paycheck.

It’s just going to take a lot of work.

I grew up in a conservative family. My father was a businessman/chiropractor and taught me how to save my money at a very young age, how to invest, bargain shop (I’m stuck up when it comes to fashion though, sorry dad!), the differences between a Roth and a Traditional IRA – the list goes on. I am glad I learned these principles young.

As I had mentioned in a previous post, I wouldn’t have moved to California if I wasn’t financially prepared. I know there are so many people that move out here on a whim, but there is no way in hell I would’ve done that without some kind of backup.

I used to wonder what it would’ve been like if I moved here in my 20s vs my 30s and I am so happy I waited. I lived with my parents after college until age 30 and they allowed me to save, thank god! It’s hard living with your parents throughout a majority of your 20s and I’m a lot more thankful to them now than I was back then. I’m older and wiser now and I think if I would’ve moved here in my 20s I would’ve gotten myself in some kind of financial trouble. I don’t like going to my parents for something unless I absolutely have to!

savingsI left Minnesota in August 2010 with a little more than $20,000 with a savings account that I could touch. The rest was already invested. Seems like a lot of money. Well it’s not a lot of money when you only have a part time media job that can call you in last minute and schedule you on different shifts throughout the week, hence why I couldn’t get another part time job in the meantime. Then you have groceries, bills, gas, rent to pay your roomie ($760) and I would treat myself to something fun but not too overpriced once in awhile. So I had a part time paycheck and the rest of the time I would have to dip into my savings.

So now we’re in the spring of 2011 when I finally got a full time job. Now I’m at about $12,000. Had I not gotten that job, I thought I was going to have to move back to Minnesota by that summer. I didn’t want to keep going through more money in my savings account then I’d have to.

Today, I have a great full time job in public relations and I freelance/contract on the side with news writing and being a liquor rep.

So how do I do it? I would get asked this by a majority of newbies or people considering moving to California. 

In a nutshell, with my full time job, a majority of it goes towards bills, my hair, nails, clothes, groceries, gas, entertainment and of course rent at the end of the month, which for me is $1,280 for my 600 square foot studio. It seems like a lot of money for a studio, but it’s a steal for being on the water (I live in a harbor area) near the beach! The average I’ve seen is about $1,700 for a one bedroom. I also try and take $100 out of each paycheck and put it into my IRA. Then I have my freelance money. About 75% of the time, this goes into my savings account.

I’m not going to sugar coat it and say that I make 100% smart choices all the time, but those figures are what I aim for monthly.

Here’s some tips for getting ahead in the California money game:

piggyGet a Piggy Bank. You know, those cute little pigs you had growing up to save for candy? I still have one, he’s a shimmery pink color. I’m not one to carry cash on me a lot unless I go down to LA because god forbid some parking nightmare awaits – but when I do have loose change it goes into my piggy. <3

Get a financial advisor. I’ve had one since I was a kid because of how I was raised/set-up, but having these guys on your side is what you need in order for you to be guided for a successful future and retirement. It’s also good when you get a new full time job to have them look at your 401k and tell you where to invest. Mine advisors are still based in Minnesota and I wouldn’t have it any other way.

Always save 10% of your paycheck. That’s the standard. I try hard to follow by this rule.

budgetingBudget monthly. Factor in your bills, gas, groceries, rent (or mortgage if you own), entertainment, etc…Sometimes unexpected costs will happen, like when my car got rear ended and I had to pay so much out of pocket. You need to be prepared with an emergency fund.

Ask yourself, do I really need this? I find myself running into this situation when I go shopping for clothes. Because I work in an industry that is about keeping yourself looking good, I always “window shop” online every week and that’s the first question I ask myself. About 80% of the time, the answer is no. On an average month, I maybe spent about $50 on clothes. Most of my “fun” money usually goes towards my hair.

Bargain shop. Great deals are everywhere, you just have to know where to look for them! Every Tuesday I get coupons in my mailbox that I use at the grocery store or I’ll go to the Dollar Tree for items like Kleenex. When I decided to redesign my apartment a bit last month, I spent $650 total for a new couch, area rug, wall mirror, painting, coffee table, desk items and a piece of small wall decor.

Stay focused. I can’t stress enough to newbies when they first move here to stay focused on your goals. There were so many times where I would go to my part time job and then just come home for the rest of the day just to find a full time job (more on this in another post).

It’s so easy to come to SoCal and get caught up in the glitz and glam of things. I came out here with half rose colored glasses and half seriousness but I refused to just party my money away. I was going to do this in one shot and give myself a reasonable deadline so I wouldn’t have to move back to Minnesota broke. In the end, my determination paid off and I still stay focused to this day.

Happy saving! 🙂


Photo Credit: My Daily Life Tips, Robb Corbett, Capreform