Step 2

time required: depends on how much research you need to do

Now that you know what you want, figure out how much money you need. For this, you need to know advanced calculus.

Just kidding, you just need to know addition. 1

The method for calculating how much money you need differs with the goal. I'll break down my goals as an example.

Here they are from the last post:

  1. Get my own apartment, store 12 months rent
  2. Take a gap year

Goal #1

How much do I need to pay for a year's worth of rent in my area?

Well, let's figure that out.

If I search for the average rent in San Francisco on Google, the first result that comes up is from They say this:

Time to go be a landlord?

That's what they have found to be the new normal price for a one-bedroom apartment in the city.

Seems a bit high for a place that I'm probably going to spend very little time in. I just need a place that's comfortable for sleeping, cooking, relaxing, and working. It doesn't have to be the nicest place.

Let's keep looking.

The link that goes to Rentcafe has a table that lists the average rents by apartment type:

That's better. Still time to go be a landlord

That's headed in the right direction. The average studio is $1k less than the average one bedroom. They're basically the same thing though, so I'm a bit confused how one is priced so much less. 2

Another thing is that I'll be sharing the room with my girlfriend, so the rent will be cut in half.

Ok, well I still think it's a bit high, but for now I'd say I'm comfortable setting my rent ceiling at $1200.

12 times that is $14400.

Adding in the security deposit, which in San Francisco can be as much as twice the rent, we have $16800. I'll round this up for good measure.

Goal one target amount: $17000

Goal #2

I need to fund my living expenses for twelve months. So the amount for the second goal is simply 12 times my monthly expenses.

Well, I don't know what that is yet. 3 There are also things that I'll have to ballpark that I don't have right now, like a gym membership and maybe a personal trainer. After a few cycles, I'll be able to determine this number, so I'll update the target amount for this goal later.

What you should do for this step

Calculate how much you need to do the thing that you want to do. Rough estimates are fine. What you should end up with is a number.

That's it.

After you're done, go to the next step.

1. Well, isn't all math simply addition, multipilcation, and subtraction at its core? Further, subtraction is just the addition of a negative, and multiplication a shorter way of writing addition. (go back)

2. Yes, I know the difference between a studio and a one bedroom apartment. (go back)

3. Well, I know what that is today. But, we're doing this from scratch, remember? So I'll be starting a new budget and figuring out what my spending is all over again.