Have a family and starting a company in San Francisco? Here’s what you’re in for.

Our apartment in Cow Hollow

In November, 2012 my (very) pregnant wife and I decided to leave our lives and our jobs in San Diego so that I could start a company called popexpert in San Francisco. It had been a dream of mine to move to “tech Mecca” and build a business from the ground up. My two co-founders already lived in the city, and San Francisco made a logical hub for our activity.

We knew that rental prices were obscenely high, but what we didn’t anticipate was just how expensive was to live in San Francisco with children.

We competed with 20 other couples to get an amazing, two-bedroom apartment in Cow Hollow (including a parking space in a garage). Our rent was $3,400/month and, by San Francisco standards, a great deal.

In December, 2012, our first son was born. Two years later, our second son was born.

There are two very important expense items that those living the startup life with families need to consider:

  1. health insurance
  2. day care

The best deal we could get was $1,400/month for “silver-level” health coverage through Kaiser. This covered me, my wife, and our two young boys. That number is similar to what folks anywhere in the US can expect to pay.

The real kicker was day care.

Day care was more expensive than rent in San Francisco. We ended up paying $2,000/child/month, or just over $4,000 (yes, about $48,000/year). Pre-schools are hard to get into, so we hired a nanny to watch our sons.

What really threw me off is that San Francisco nannies expect to be paid their hourly rate to go on vacation every year. This means that, unless we could align our vacation schedules, we’d have to hire a fill-in nanny and pay twice the day care costs while our primary nanny was away. One of our nannies (we had five over the course of three years) never went away for Christmas and took her two weeks off in the summer. So, we’d get stuck paying her when we’d take the kids to visit their grandparents for The Holidays.

Combined, my wife and I made pretty good money. But given the cost to live in San Francisco with kids, we had to eat into savings every month. Here’s insight into our average monthly spend in 2015:

Our average monthly spend by category

Sure, there’s some wiggle room in here. We didn’t need to eat organic food, for example (despite my wife’s insistence to the contrary). Even if we could find $1,000/month in savings, we were still being killed.

Move to Walnut Creek

We spent three years in San Francisco, and we spent two of those years trying to figure out how to reduce costs. We tried a nanny share. We thought about moving to my parent’s basement in Colorado for a couple of months to save about $20,000.

Then we found Walnut Creek.

Walnut Creek is a Bay Area suburb about 1 hour out of San Francisco by way of Bay Area Rapid Transit (BART). Nannies are 50% cheaper there, and they don’t expect to be paid to go on vacation. And Daycare is about 40% cheaper.

The other great thing is that Walnut Creek has one of the best public school systems in California (Marin is up there, too).

Walnut Creek schools “GreatSchools.org” ratings.

This system stands in stark contrast to San Francisco:

Our rent is $3,100 for a three-bedroom house with a backyard. And the backyard is like a built-in babysitter. BART runs through Walnut Creek, so commuting to San Francisco is possible (about 60 minutes).

In Closing

If you have the startup itch and a family, look to live in the East Bay. Startup life is hard enough without the added financial pressure brought on by supporting kids. It’s worth extra commute time, in this man’s opinion, to save each month.

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