There has been a lot of discussion on what the employers ARE paying designers. Your employers, especially consultancies would not (should not) sign off on a work proposal unless it pays their expenses as a minimum. Yes I know there are other factors such as PR, promised future work, and China that may influence the decision.
But my point is that you canâ€™t stay in business unless you make a profit. So on the same note, I think you should ask yourself how much does it cost you TO BE designer and ask for what you need.
I am a designer in SF with several years of experience and here is what it costs me to live as a designer. Keep in mind this is a minimum.
(per day cost)
Food = $15
Clothes = $3
Car payment =$15
Gas = $6
Parking = $6
Insurance = $4
Maintenance = $2
Mortgage = $71
Property Tax = $9
Retirement = $12
Total = $143/day and $52,195/year
This is net pay. You will have to factor in taxes and any other expense that would affect your take home pay. Basically you will need a salary of $68K to just live here (not to just subsist)
Also note, that I did not include any entertainment expense or miscellaneous expenses.
The costs quoted would get you a Honda civic or Mazda 3 and a 1-bedroom condo. Not exactly living the life of luxury but I am not a student either. At todayâ€™s current housing prices, you should double the mortgage and property tax. (This would put you over $100K)
First of all, yes it is FU#!^& expensive to live here. Second, you canâ€™t expect to get all the things your parents had at the same age. You will have to wait awhile before the condo. But the point is that you need to figure out what it costs you to do your job and ask for that much.
If you are lucky enough to have a significant other who still stays with you after you work so much, then you can lower your expenses but donâ€™t take from their salary to supplement your employer. And never, never put off paying into your retirement.
personal finance should be an required class at design schools. It’s crazy that it isn’t
How else are we going to be able to afford all that cool design stuff?
Seriously though, the government doesn’t care if you have to eat cat food when your old, and everybody says social security is a joke for our generation. Some of have the corporate jobs with the 401Ks and matched TDSPs, but I know lots of ID at big companies who are classifed contractors so the employers can get away with zero benefits… let alone all the guys freelancing or at smaller companies
You have to take care of your own savings alot of times, or your not going to be able to afford that house, car, expensive girlfriend, kids, or 351st pair of Nikes
Brilliant. Technically you should be looking at retirement as a series proprotional to your age and percentage of your income, compounded relative to your retirement goal date. That way you can get a relative idea about your spending and what you can get away with. Let me know if you need help with the math on this one. (Manage the forum at forum.cadtalent.com – if you post there I’ll get it quicker).
The retirement notion is dead on: Pay yourself first, no one else is going to.
This is an excellent topic. I hope we can come with something like this for different places, as a basic cost-of-living point of comparison. If we’re talking about a bare minimu, the following two seem rather steep:
I live in Boston, which has a high cost of living comparable to SF. I don’t own a home or a car, so here is my daily breadown:
Food = $10
Clothes = $1.50
Public Transit = $3.50
Rent = $42
Utilities = $6
Cell Phone = $2
Health Insurance = $1
Student Loan = $10
Retirement = $0 (changing this soon; must start planning!)
Total = $78/day and $28,470/year
I didn’t include computer, magazine, etc. costs, because I don’t have a reliable way to break those down to a daily average. I included my cell phone as a separate expense just to point out that expense. Utilities in New England vary seasonally. Last winter, my heating bill was roughly $200/month. This winter, it will be higher.
I cut costs by not having AC, rarely eating out (I always bring my own lunch to work), buying clothes only on sale, and walking whenever I can instead of taking the T. For food, I’m estimating $2 for breakfast, $3 for lunch, and $5 for dinner. For clothes, I’m estimating that $500/year covers all my purchases as well as laundry and dry cleaning. This fall, I will finally start investing in my retirement, which is long overdue.
Now that I see that my daily rent is $42, I feel like I need to move.
I do earn more than 28k/year, but not a whole lot more.
Not being a beginning designer, I have to meet with clients and network, which costs money. For example, when I meet with a client I am wearing somewhere between $500 and $1000 in clothes. Also, there is networking, beyond IDSA, that will keep me employed or land me side work that I have to pay for which I canâ€™t get Uncle Sam to pay. (about $500 a year)
I have forgotten many expenses such as cell phone, IDSA related (several thousand) and personal computer costs that would raise the pay needed to do business. Thanks to everyone for the reminder. My quick estimate is most certainly low.
Still the point remains, those designers making less than it takes to go to work AND build your future are getting used by their employers.
Donâ€™t get me wrong, I am not against the employers, they also need to look at what it takes to live and grow and charge their clients accordingly.
Mighty, if you donâ€™t make at least $40K you should start looking for something else. You should start paying into your retirement today ($4K into a Roth IRA). You need experience to grow. Not just work experience but life and purchasing experience. It always helps me to think of the last thing I can remember purchasing, and what led me to the decision to buy, in designing what I am working on.
Mighty had a good idea with comparing cost of living with area, although I am sure this is available on the net, but I would be interested to see what designers spend their money on with relation to level of design experience. I am sure we would identify some paradigm shifts that all could learn from. When does your thought go from buying CDâ€™s and markers to buying suits and memberships to networking clubs?
I’m really glad we’re going through this exercise. I’m finding it very helpful to note all my expenses (I’m still missing some, but thanks for everyone’s tips) and to break them down in this way. There are cost-of-living calculators online, but this is good because it also breaks down some design-specific expenses, and it points out some often-forgotten expenses.
While I agree that I could/should be earning more, and that I definitely need to start the retirement fund, I do think that some financial corners can be cut without being detrimental to the designer and his/her career needs. For instance, you don’t need to shop at Men’s Wearhouse to get a good deal on a suit. There are other ways to be savvy and avoid paying full-price while looking appropriately professional. I also find it generally helpful to question my purchases, whether it’s clothing or a pastry shop. The point is not to be a martyr, but simply to keep track of one’s spending and the reasons for it.
In any case, I do hope some people from other parts of the country will contribute with their own expenses.