An Exercise in Accounting: About as boring, yet informative, as the title.

A couple of months ago, my Dad visited me in Pittsburgh to spend some one-on-one time talking about “job stuff”: what I was looking for, companies I might be interested in, contacts and resources that I have collected over the past four years. Truthfully, the weekend was not so successful in this regard because we were searching the Internet (Google) before I really started to get in touch with me Innernet. Nevertheless, as one of what seemed like a thousand unanswerable questions, my dad asked me how much money I thought I would like to make next year.

This is a really loaded question.

My first reaction was, I’ll admit, one of disgust. I was upset that he was asking me about money when I felt that this was really the last item on my list of priorities. I want a purpose, a reason to get up in the morning, and to be a part of something that is larger than myself, my company, and my financial needs. I felt like he was missing the point. I didn’t see how money factored into the equation at all, because, the way I saw it, I would make it work! Maybe it would even be fun for a little while… to be forced to be creative and resourceful. So what If I have to live off oatmeal? That builds character, right?

But I couldn’t shake this notion that perhaps I was being slightly Romantic, and perhaps elitist? After all, a Carnegie Mellon education costs a small fortune. Was I selling myself short in my willingness to live so minimally? Maybe I don’t feel compelled to compete with my friends who will earn upwards of $80k in their first year of work as a Chemical Engineer, but livin' isn't exactly $Free.99. Do I have to resign myself to a low salary in order to do the kind of hands-on, small project, start-up work that I want to do?

While I am not aiming for the status or security that comes with a large salary, it is naïve of me to think that I could (or should) live paycheck to paycheck. I decided to actually try to answer the question: How much money would I like to make in my first year of work? As in, how much money does it cost to LIVE? I didn’t want this number to just come from out of the blue – plucked from the list of average starting salaries for engineering majors graduating from Carnegie Mellon, or an amount similar to what my friends would be earning next year doing more traditional engineering work. For now, all I would like is to be self-sufficient. So this is how I broke it down:

Housing. It seems to me that housing is by and large the most expensive part of living. It’s also probably one of the factors that vary the most depending on where one decides to live after graduation. Over the past couple of years, I’ve realized that environment matters to me. Ask my Mom and she’ll tell you that the happiest she’s ever seen me was during my time in Montana, where I could run and bike and ski and go for a hike whenever I wanted… where I found peace connecting with myself in nature.

So, here’s my thinking: I don’t want to live in New York City (my hometown, if you can call NYC a hometown). I don’t feel compelled to stay in Pittsburgh, and at this point, my gut tells me that if I don’t end up moving to some country in South America, I’ll probably move to some place in or near the mountains. In Pittsburgh, I live with four roommates and my portion of the rent is $450 per month, plus utilities. In Montana, my rent was $367 per month. But to be on the safe side, let’s say I end up living in an outdoorsy city (Portland, OR?), so maybe rent costs $800 per month (utilities included).

Food. I will be the first to admit that I love food, and farmer’s markets, and cooking, and having people over for dinner. But as a student, I don’t have the time to have as much fun in the kitchen as I might like, and so I keep it pretty basic. When the farmer’s markets are in season, I’ll buy produce from Jeff (my favorite farmer) every Wednesday outside of Phipps Conservatory, but in general, I shop at Giant Eagle and Trader Joe’s. This is a typical shopping list: granola, yogurt, oatmeal (once every couple months), apples, bananas, eggs, soymilk, quinoa (in bulk from the Co-op), lots of greens, squash, sweet potatoes, chocolate covered something (raisins, pretzels), and maybe a couple other things that look interesting. I probably spend a little over $100 per month on food. But hopefully in the future I’ll have more dinner parties, and maybe I’ll drink some wine, so let’s budget for $200.

Clothing. I really hate shopping, and I am not the biggest fan of the American consumer culture that we’ve gotten so accustomed to. I buy clothes when I am home in New York over winter or summer break when there are things that I really need. I’m learning (from my mom, who is a pro) to make economical purchases – to invest in a few great things that I will have for years, rather than to buy cheap stuff that won’t last. I don’t even know how to budget for clothing, because I really think that depending on where I’m working, I could go all year without buying a single thing. But, let’s say I need to buy a pair of heals (god forbid) or some nice dress pants or a blazer or a handbag. I will allocate $100 per month.

Toiletries. As someone who thinks showers are often over-rated, this is an expense that I originally overlooked. But have no fear, my Mom reminded me that I do need to wash my clothes, and I do still need to buy toilet paper. And I’ll need soap, shampoo, razors, deodorant, tampons, toothpaste, and maybe a new toothbrush every once in a while. What sounds reasonable for personal hygiene? Let’s say $100 per month.

Transportation. The idea of owning a car is very scary to me, on several levels. But if we disregard the fact that I have only been a licensed driver for five months (thank you very much!) I just don’t really see myself as a car person. But what if I live in the boonies? I’ll need a car! Having grown up in NYC, I am quite fond of public transportation, although I will admit that the inconsistency of the Pittsburgh bus system has inspired a romance between my bicycle and I that is infinitely more personal and reliable. All this just goes to say that I have no idea how much I will need to spend on transportation. Will I need to buy a car and pay for gas? Will I need to buy an unlimited ticket for public transportation? Will I only need to buy spare tubes for my tires? Again, I’ll be conservative and assume the worst: $200 per month.

Travel. This is another expense that almost slipped my mind, until I remembered that I would like to be able to visit my family and friends, wherever they and I might be. Granted, if I’m on another continent it won’t be so feasible for me to just go visit a friend one weekend. But if I am in the states, it is worth it to me to spend some money on airfare or a train ticket to go visit the people I love. How often I visit depends on where I relocate, but hopefully I see my peoples at least a couple times a year! I don’t know how to budget for this because I have no clue where I’ll be, but let’s just say $75 per month.

Entertainment. This category would include going out for dinner and/or drinks with friends, occasional live music, movies, etc. Does $200 per month sound reasonable?

Phone. This is the final straw. If I want to be completely self-sufficient, I will have to pay my own phone bill. Skype will prove to be a life (read: money) saver if I live outside the U.S., so I think it’s safe to assume that all calls will be domestic - $50 per month.

Wellbeing. I made this category because I have learned that in order for me to be a productive person out there in the world, and to make meaningful contributions, I need to take care of myself. This part of the budget includes all purchases that serve my physical, mental, and emotional wellbeing: Yoga classes, running sneakers, books, and music, for example. Yes, I could choose to limit myself, buy yoga videos on DVD and practice in my living room. But for me, part of what makes Yoga so special is the community, and the energy in the room that radiates from all of the other people who I don’t know a thing about, but to whom I feel connected. I would say that yoga also counts as my healthcare, but my guess is that I’ll probably (hopefully) be insured. Some things, I think, are worth the extra money: $200 per month.

Monthly Expenses:

Housing: $800

Food: $200

Clothing: $100

Toiletries: $100

Transportation: $200

Travel: $75

Entertainment: $200

Phone: $50

Wellbeing: $200

Monthly Total: $1925

Annual Total: $23,100

Salary: $25,000

This number looks really low, but it’s pretty amazing all that it can buy. I’m not saying that, if asked in an interview how much I would like to earn, I would say $30,000, but it’s helpful to know that if this is all I made – or if I earned less – I would be A-okay.