Build a smart budget for tech salaries in high cost-of-living cities. Learn to allocate base pay, plan for RSU taxes, and maximize savings on a developer's income.
Housing, food, utilities, insurance, transport
Entertainment, dining out, subscriptions, hobbies
Emergency fund, investments, debt payoff
Annual Income
$120,000
Needs/yr
$60k
Wants/yr
$36k
Savings/yr
$24k
The golden rule for developers: budget your needs and wants based on base salary after-tax only. Never factor RSUs, bonuses, or ESPP into your monthly spending plan. On a $150,000 base, your after-tax monthly income is roughly $9,000-10,000 depending on state. Apply 50/30/20 to this number: $4,500-5,000 needs, $2,700-3,000 wants, $1,800-2,000 savings. Treat all variable comp as bonus savings.
In San Francisco, Seattle, or New York, the 50% needs allocation might feel impossible — rent alone can be $2,500-4,000/month. The fix: adjust to 55-60% needs while protecting your savings rate. Share housing (common even for senior developers), use pre-tax transit benefits, and leverage employer perks (free meals, gym, commuter benefits). These employer perks effectively reduce your 'needs' by $300-500/month.
RSU vesting creates tax surprises if you're not prepared. When $50,000 in RSUs vests, roughly $15,000-20,000 goes to taxes (federal + state + FICA). Set aside 35-40% of every RSU vest for taxes. Many developers get hit with an unexpected tax bill in April because their W-2 withholding didn't account for RSU income properly. Open a separate 'tax reserve' savings account.
Needs = Income × 0.50Wants = Income × 0.30Savings = Income × 0.20
Enter your monthly after-tax income and the calculator instantly shows the dollar amounts for each category. The visual breakdown helps you compare these targets against your actual spending. Use the results as guardrails — if needs exceed 50%, you may be overextended on fixed costs.
With $6,000/month after-tax income: needs budget is $3,000 (rent, groceries, utilities, insurance, minimum debt payments), wants budget is $1,800 (dining out, entertainment, subscriptions, shopping), and savings target is $1,200 (emergency fund, retirement, investments). If your rent alone is $2,200, your remaining needs budget of $800 for all other essentials is tight — a signal to consider housing alternatives or increase income.
Start by categorizing your last 3 months of spending into needs, wants, and savings. Compare the actual percentages to the 50/30/20 target to see where you stand.
If needs exceed 50%, focus on the largest fixed costs first. Housing, car payments, and insurance premiums are the biggest levers for reducing this category.
The 20% savings category includes all savings and debt repayment above minimums. If you're paying off high-interest debt, count those extra payments as savings.
Treat the savings allocation as a "pay yourself first" transfer. Set it up as an automatic transfer on payday before you have a chance to spend it.
For aggressive financial goals (FIRE, early home purchase), consider a 50/20/30 split — flipping wants and savings. Your lifestyle still gets 20%, but wealth building accelerates significantly.