The Answer - How much money do I need in Sydney (Also relevant to other cities)

[Nev]

How much money do I need in Sydney (Also relevant to other cities)

 

There have been quite a few comments about “What is the minimum I need to live in Sydney”.

 

The average salary in NSW is $80,132 and this would have been dragged up by the super wealthy so it should be lower, add that at least 50% of the people earn less than this number if we ignore the distortion, that sets the average wage amount, so if you are earning this you are smack bang in the middle of the bunch.

 

So what is the minimum number…. The problem is that it depends on what you consider to be a minimum, I am pretty sure there are peeps on this forum that would consider anything less than a mansion to be slumming it:

 

While I was getting my business up and running here in Australia, my wife and I with a 1 year old managed just fine on $1k per month for about 4 months, living in national parks @ $12 per day or sometimes free if we headed far out into the sticks, we still bought good quality food with a serious plan, kept petrol usage to an absolute minimum...etc, even once the finances started recovering we lived on a serious budget for over a year.

Now that the business is doing well (7 staff here in Australia) I still cannot bring myself to hand over packs of unnecessary cash.

 

Here is our budget with me working in Sydney:

We live in a 3-bedroom house with a sealed garage and a garden, 26 min drive to the beach, a 10 minute walk to a train station, in a nice area on the central coast (Narara – got a Durban / Margate feel to the place), it takes me 1 hour 15 min to the city by train, so I sit and work or read a book in the morning and evening.

Rent = $1680 per month

Food = $800 pm – we really spend more than we need to here, but like lots of fresh fruit, meat, fish etc.

Power = $100 approx per month - fans not aircon, don't run the heater all winter just when needed, then keep it in one room, I swapped every light for LED so we don’t care if they get left on, no tumble dryer (Clothes line works just fine)

Medium Hospital plan for the family = $200 pm (extras are a rip so skip those)

Train Fare = $290 Per month

Home Internet = $100 – lots with extras

Mobile = $ 40 – I have a contract, but 40 bucks with Telstra gets you unlimited calling in Auz & 5gigs of data (Times 2 for your partner to get one as well)

 

So $3 210 a month will keep a family of 2 adults and a toddler happy and healthy long term, that is $38 520 per year, even adding spending money you will be able to manage just fine on a salary of $60k for a family, and if you are earning more you can save really nicely by keeping your costs down, and if the going gets tough you could make do with $12k per year, we have done it, not fun but you roll with the punches.

 

It is all about what you consider to be good enough, I am perfectly happy with what we have and living debt free with the ability to have my wife stay at home and look after the little one (and one on the way) plus still be able to save, sure i travel to work and back, but even living in the city you will still need to travel, so the difference is not as high, living the dream in my books, others feel that they have to buy a place, it must be close to the city, they have to keep up with the Jones’s and that makes them happy, but needs a heck of a lot more money to make it work.

 

(Required Australian disclaimer)

Note this is not financial advice, I just really like the subject, have done a lot of reading up and number crunching on spreadsheets, this is my personal opinion that I find interesting to discuss, don’t get me started abut if buying a house is a good investment….

 

 

Edited December 2, 2017 by Nev

[ShaunR]

Very nice detail, think people can definitely use this a starting point and work from there. Also saw a lot of questions/queries about it, we also looked around and asked because every person situation is different. I will add our way of life and maybe this will also help with some idea what to work with if someone is in a similar situation.

 

Our situation is a bit different so we have to deal with the "expensive" way, but it works for us for now.  :-)

 

Just to put our situation in perspective our sons daycare is more than your yearly expenses! :-(

Most people with 2 kids have some parent staying home or their kids only attend daycare 2-3 days per week to keeps costs to a level of sanity. :-)

 

We both work because we always have in South Africa and we "career" people and not one of us can see staying at home, to work keeps us sane and get a chance to mingle with other people and make friends. To put our son in daycare we felt it's important to give him social skills and learn new things, the daycare/schools are light years ahead of South Africa. He really enjoys it there and made lots of friends.

 

We stay close to the CBD in the Lower North Shore (Castlecrag, it is very close to Willoughby), time is important to us so we have to "pay" a bit more to spend time as a family. The benefit for us staying so close to the CBD is that there is so much to do and we can just hop on a train or bus there in 10-15 min, do our thing and come back. We love our trip to Watson's Bay to go and eat fish & chips, our son loves the train/ferry, quick trip to Taronga Zoo, festivals in the city, etc. But that is what works for us,  as I said it can get expensive but we have the 2 incomes that makes it easier.

 

We've only been in Australia (Sydney) 15 months but busy scouting to buy a house next year, Sydney houses is just CRAZY, they do say Sydney is the 2nd most UN-AFFORDABLE place to buy in the WORLD. We'll have to look very carefully...it's a completely different ball game.

 

Rough Idea in Sydney if you both working and want to live in Lower North Shore/close to CBD with a kid in Daycare:

 

Oac Neutral Bay - $3500 pm

Rent [3 bedroom house with some grass at the back] - $4800 pm

Groceries at Woolworths - $1100 pm

Car - Bought one cash, still think it's the best way not having that expense in your budget. No need for a big fancy one because of the public transport.

Gas/Electricity - $300 pm

Pertol - $70 pm

Foxtel(Aus version of DSTV)/Internet - $150 pm

Mobile [Husband and wife] - [2 x $40] $80 pm

Opal (Train/Bus) - $500 pm [husband + wife]

Insurance [Car and household] - $120 pm

 

*** The above outline does not include spare cash for clothes, "luxuries" or entertainment money because it will depend on your lifestyle, this is a framework of basics in our situation. This can add a significant amount to your overall budget because to eat out in Sydney is VERY expensive.

 

We have Life cover and some of those but that is entirely up to the family if they want to have it. We like to eat out on a weekends, example a pizza dinner for us (2 adults plus a 4 year old) with a bottle of wine works out around $150, breakfast at coffee-shop, etc.. Then you still have to factor in some coffee and odds and ends in the week, lunch with the boys/work colleagues, etc.

 

Edited December 2, 2017 by ShaunR

[Husky]

Thank you @Nev And @ShaunR

Like the different perspectives and would encourage other locals to share. This is really useful. We're a family of 4 with 2 teenagers (one going to uni), Melbourne bound in a few weeks. I have budgeted that we'll need around $12k per month. Both my husband and I plan to work. Will confirm once we have settled.

@ShaunR Excuse my ignorance, but what is oac?

Edited December 2, 2017 by Husky
Added

[Nev]

Yep, my wife likes the idea of staying at home with the little on, and as mentioned there is another one on the way.

 

How crazy is that difference though,

$ 38 520 per year for our expenses,

vs

$127 440 for your expenses, living in the city is really crazy expensive

 

And as i said, different folks have a different outlook on life and want different things, so how much money do you need can be really situational

 

[SimpleSimon]

Castlecrag is however one of the most expensive suburbs in Sydney and the rent that @ShaunR is paying is 3x that which you’d pay in say Hornsby or Carlingford. There are other expenses due to living in an expensive suburb: Oac (childcare) is double that of other suburbs.

 

That said, our daughter is planning to move out and she showed us her budget for a single person sharing accommodation and it’s more than @Nev‘s family of 3.5. We’re closer to spending what @ShaunR does but for different reasons - 2 cars, more entertainment, running a business etc. 

 

If I was a new immigrant in Sydney I think $100K per year would give a very nice life style but assumes no full time childcare.

[Nev]

Yep, thanks Shaun & Simon,

 

I hear you, a persons costs are a factor of what you have available and what you want from life, for some people having a 15 minute trip to work has a high priority, for me i must be within walking distance of a train station but i don't mind an hour to the city center, with that said i really find it interesting looking at what different lifestyles cost, how cost of living can vary, so thanks for the input above, this post will be useful for a lot of people i suspect.

 

Hopefully others will be willing to add their situations as well

Edited December 2, 2017 by Nev

[ShaunR]

6 hours ago, SimpleSimon said:

Castlecrag is however one of the most expensive suburbs in Sydney and the rent that @ShaunR is paying is 3x that which you’d pay in say Hornsby or Carlingford. There are other expenses due to living in an expensive suburb: Oac (childcare) is double that of other suburbs.

 

That said, our daughter is planning to move out and she showed us her budget for a single person sharing accommodation and it’s more than @Nev‘s family of 3.5. We’re closer to spending what @ShaunR does but for different reasons - 2 cars, more entertainment, running a business etc. 

 

If I was a new immigrant in Sydney I think $100K per year would give a very nice life style but assumes no full time childcare.

 

Most surprisingly is that someone at least know about Castlecrag!

Big kudo's for you @SimpleSimon 

Best kept secret in Sydney, no flats only house surrounded by trees and just around the corner from CBD.

[SimpleSimon]

Thanks @ShaunR, our work, personal  and social life takes us all around Sydney. This includes places like Mt Druitt, Bankstown, Huntingwood, Minto, Kogarah, and Blacktown. Not the best areas but I’ve never felt unsafe.

 

That’s why we settled in Macquarie Park, it’s very accessible.

 

We’ve done a walking tour of Castlecrag with an architect friend who lives in your area. He showed us hidden Harry Seidler gems. We’ve also been to the lookouts over middle harbour - spectacular.

[ShaunR]

On 12/2/2017 at 5:49 PM, Husky said:

Thank you @Nev And @ShaunR

Like the different perspectives and would encourage other locals to share. This is really useful. We're a family of 4 with 2 teenagers (one going to uni), Melbourne bound in a few weeks. I have budgeted that we'll need around $12k per month. Both my husband and I plan to work. Will confirm once we have settled.

@ShaunR Excuse my ignorance, but what is oac?

 

Hey @Husky

 

Oac is a daycare school, "Only About Children"

 

http://oac.edu.au/

 

 

[Wessmuts]

Trying to figure out how much money in a month is enough is honestly my biggest panic. We have signed a job offer and pretty much will be there (Rockhampton) by end march, but reading all these threads makes it very difficult to discern what is enough to be comfortable.

 

I have as a matter of interest discussed the same question with a few South African friends to see what they deem to be enough while living here and the answers vary dramatically.

 

I think the secret is to try and setup as small as possible from the get go.

 

We will be on 175k per year before tax plus      Supers, car allowance and retention schemes which push the total package up to 320k per year before tax. 

 

Considering we have to setup from scratch as our SA assets are pretty valueless once converted it is daunting to think you need to get on your feet and setup a good life especially being in our late 30’s.

 

Thanks alot guys for the very valuable input and ideas

[Husky]

@Wessmuts

I have been researching and doing budgets for over a year now in preparation for our move. My husband and I are both professionals and quite advanced in our careers. From what I can tell, your package is on the very high end. Remember that Australia does not have the huge income differentials we do in South Africa. If you are going over on a permanent residence visa (i.e. 189 or 190), expenses such as schooling and medical care are significantly lower than in SA.  

[Bonny]

@wessmuts  that is a very good package and you will be fine. Just don't fall into the trap of spending too much from the get-go. Rather be cautious. You can avoid a brand new car, use Netflix instead of Foxtel, keep phone contracts at around $50pm each, sign up for Flybuys with Coles, learn to enjoy cleanskin wines, there's lots of little ways to save. You could almost save half your salary. Find out from an accountant what you can put into Super pre-tax (age dependent), and use an 'industry super fund' which has low costs. Paying for things like private medical, life insurance, pvt school fees, etc annually gets you a good discount, but try to stagger this so you don't have to fork out $20k once a year on stuff! 

Edited December 19, 2017 by Bonny

[Wessmuts]

Thanks @Bonny - I certainly dont expect to live like we do here and the plan is to try and live smaller, but I just want to make sure we are at least being realistic. The package includes some super, but topping it up is certainly key as retirement in AUS and RAND are two very different things.

 

There is alot to consider @BonnyI am also trying my best to get budgets from online sources and once I start converting my income to dollar it will also help, but as I still have rand based clients I am not even considering my income as part of our setup budget. I just want to make this transition as smooth as possible and I find budgeting to be the best way to do that.

 

Again Thanks for all the feedback

 

 

[Wessmuts]

On 12/19/2017 at 3:23 PM, Wessmuts said:

Thanks @Bonny - I certainly dont expect to live like we do here and the plan is to try and live smaller, but I just want to make sure we are at least being realistic. The package includes some super, but topping it up is certainly key as retirement in AUS and RAND are two very different things.

 

There is alot to consider @BonnyI am also trying my best to get budgets from online sources and once I start converting my income to dollar it will also help, but as I still have rand based clients I am not even considering my income as part of our setup budget. I just want to make this transition as smooth as possible and I find budgeting to be the best way to do that.

 

Again Thanks for all the feedback

 

 

Very interesting reading this now after living here for three months.

 

Budget is very different to what I expected, but we are able to save and still survive.

[Bonny]

@Wessmuts will be interesting if you want to give a bit more detail, ie. are you spending more, or less than you expected? 

 

 

[Wessmuts]

22 minutes ago, Bonny said:

@Wessmuts will be interesting if you want to give a bit more detail, ie. are you spending more, or less than you expected? 

 

 

 

Well, certain things more. Others less. Getting used too, fortnightly, monthly weekly and quarterly bills have been weird.

 

I have attached our current budget which is what we sticking too, apart from needing to pay for a few bigger items.

 

We have two cars on novated leases and renting a two bedroom flat. Obviously 'holiday', 'save' and 'clothes' all go into a savings account and we are not actually spending it. So we are managing to save a good amount monthly. We also don't spend nearly as much on 'going out' as in the budget, but it goes into a CC for when we do.

 

I am getting a cleaning lady in every fortnight and take worksheets to be ironed, but everything else we do.

 

In the beginning it is just really confusing keeping track of all the expenses and to make sure you don't over commit, because the numbers are to small it sounds like not a lot of money. So mentally you need to remind yourself 50 AUD is a lot of money.

 

 

 

[F1veClaw]

1 hour ago, Wessmuts said:

 

Well, certain things more. Others less. Getting used too, fortnightly, monthly weekly and quarterly bills have been weird.

 

I have attached our current budget which is what we sticking too, apart from needing to pay for a few bigger items.

 

We have two cars on novated leases and renting a two bedroom flat. Obviously 'holiday', 'save' and 'clothes' all go into a savings account and we are not actually spending it. So we are managing to save a good amount monthly. We also don't spend nearly as much on 'going out' as in the budget, but it goes into a CC for when we do.

 

I am getting a cleaning lady in every fortnight and take worksheets to be ironed, but everything else we do.

 

In the beginning it is just really confusing keeping track of all the expenses and to make sure you don't over commit, because the numbers are to small it sounds like not a lot of money. So mentally you need to remind yourself 50 AUD is a lot of money.

 

 

 

Apart from your fixed expenses such as rent, how close do you get to your floating expenses such as food and electricity?

[Wessmuts]

1 hour ago, F1veClaw said:

Apart from your fixed expenses such as rent, how close do you get to your floating expenses such as food and electricity?

 

In terms of food it very much relates to what you buy and used to. In south africa I spent about R10k a month on food. I buy lots of fresh produce and meat which is expensive here.

Our local friends here spend alot more on food and buy only from delis and butchers and I think it is possible to spend less of you are considered about it. I shop mostly at Woolworths whick kind of like spar in SA.

 

Electricity is charged quaterly here. 

 

 

[Bonny]

@Wessmuts I think there may be a mistake in your spreadsheet wrt electricity. I went to check our last quarterly bill was $680, so around $225 per month. You have $540pm...more than double? Having said that, our bill is for 3 adults’ use. Maybe you are including water, but tenants don’t usually pay for water. 

 

Also your mobile bills look really high. Mine is around $85 per month with Voda and includes calls to SA, lots of data and a new phone too. So that is a bit weird.

 

We also used to pay that amount of medical for Visitors cover on Medibank but when we got PR & our kids finished with braces we went down to about $300pm. The ‘extras’ (like physio) were a total waste of money for us, we didn’t use any if it for years and years. I would also rather reduce my premiums and pay a higher hospital admission, because you may not go to hospital during the year, but the difference it makes to your premium saves you that amount annually anyway. Please note if you work for ANY large corporation in Aus, your medical fund will probably give you a corporate discount, but only if you ask them about it 🤔 Also, diarise to call them in March next year and pay your annual premium up front. If you do it before April you pay this year’s prices instead of next year’s. Everyone in the know does this 🤗

 

I am going to assume your SA expenses might include life insurance...I would phone around for quotes here too, if that’s the case. I hung on to my SA life insurance for years and it was cheaper here (much less likely to die!)

 

I agree it is very confusing checking on what is weekly, fortnightly, quarterly etc 🙀 I am still confused. 😹

Edited November 23, 2018 by Bonny

[Wessmuts]

9 minutes ago, Bonny said:

@Wessmuts I think there may be a mistake in your spreadsheet wrt electricity. I went to check our last quarterly bill was $680, so around $225 per month. You have $540pm...more than double? Having said that, our bill is for 3 adults’ use. Maybe you are including water, but tenants don’t usually pay for water. 

 

Also your mobile bills look really high. Mine is around $85 per month with Voda and includes calls to SA, lots of data and a new phone too. So that is a bit weird.

 

We also used to pay that amount of medical for Visitors cover on Medibank but when we got PR & our kids finished with braces we went down to about $300pm. The ‘extras’ (like physio) were a total waste of money for us, we didn’t use any if it for years and years. I would also rather reduce my premiums and pay a higher hospital admission, because you may not go to hospital during the year, but the difference it makes to your premium saves you that amount annually anyway. Please note if you work for ANY large corporation in Aus, your medical fund will probably give you a corporate discount, but only if you ask them about it 🤔 Also, diarise to call them in March next year and pay your annual premium up front. If you do it before April you pay this year’s prices instead of next year’s. Everyone in the know does this 🤗

 

I am going to assume your SA expenses might include life insurance...I would phone around for quotes here too, if that’s the case. I hung on to my SA life insurance for years and it was cheaper here (much less likely to die!)

 

I agree it is very confusing checking on what is weekly, fortnightly, quarterly etc 🙀 I am still confused. 😹

 

Oh yes! Electricity is 500 per quarter!!!

 

I need to adjust that:)

 

Mobile is optus for two phones and includes our 250 gig data we use for streaming etc. 

 

I will definitely relook the medical. I got this straight from SA so might drop the extras and restructure.

 

Thanks for all the tips @Bonny, really always helps to have someone who has been here a while to give you some perspective and advice.

 

 

[Bonny]

1 minute ago, Wessmuts said:

 

Oh yes! Electricity is 500 per quarter!!!

 

I need to adjust that:)

 

Mobile is optus for two phones and includes our 250 gig data we use for streaming etc. 

 

I will definitely relook the medical. I got this straight from SA so might drop the extras and restructure.

 

Thanks for all the tips @Bonny, really always helps to have someone who has been here a while to give you some perspective and advice.

 

 

Don’t worry, soon you will be like me and all the Aussies 🤭 We never spend an extra $10, haha!

 

While you’re at it, get a Flybuys card and shop at Coles. You will easily score 24 bottles of red wine every Christmas with your points (Having said that, never take a bottle of wine costing less than about $22 to those fancy friends of yours who spend so much on food 👏🏻👏🏻) In our first month I took a cheap bottle of wine to someone’s house (converting to ZAR and not knowing the  brands, I thought it should be ok) and they gave it straight back 👀

 

I forgot you didn’t have internet on your spreadsheet, so that makes more sense. 

[satosa]

Hi Nev, thanks for your budget post.  We are a family,  nsw ss visa grants due next year, hope to move there before July 2019. I wanted to get more info on the cheap accommodation you mentioned,  like national parks etc. Any info will help with my planning...  Names, websites, areas,  what type of accommodation it was...thank you in advance

[Nev]

So if you buy camping gear and are prepared to live in a forest with no power and drop toilets the family can live on around $70 a week or even zero if you head far into the sticks.

 

With that said you will need more than a few pointers to be able, we did it for nearly 2 years and it was a learning curve, it will also be far from the cities, so you couldn't live for cheap and then still head into the city unfortunately

 

There are camp places within train range of the city that you can get for as low as $260 per week with hot showers if you are willing to spend 2 hours on the train to get to the City

 

If you are really interested in living for cheap and want to do this, shout and i will run you through it all

 

 

[satosa]

Thanks Nev, appreciate your response.

 

It clarifies it for me - it will be far out camping.

 

We also have young children, but they are a bit older, so I am not sure that camping will work us for too long a period. I think it will also be better if I am closer to the cities in the job hunt stage.

 

[Bonny]

Just to go a little off topic here (sorry), I have been watching quite a few tv programs about living in ‘tiny houses’ , mainly done to save money. Obviously it is bigger in the States but gaining a following in Aus.

 

I think it’s more difficult to make it work in Aus for various reasons. The main problem seems to be that you have to keep moving around to avoid the authorities. I wonder if a cheap caravan is ever viable?

 

The other big problem is that if you want to stay off the radar in a caravan you will need to go rural, causing problems with transport to work etc. If you are visibly living in a caravan someone will 100% dob you in. Any thoughts?