The LearnVest
Guide to Money in
Chicago
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The LearnVest Guide to Money in Chicago
Contents
3 Chicagoland
6 Why Budget?
8 One Number
12 Non-Monthly Expenses
15 Work Your Numbers
19 Beyond Budgeting
20 Get Your $50 Credit
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The LearnVest Guide to Money in Chicago
Chicagoland
Chicago is perhaps the most American of American
cities—a major metropolis in the country’s heartland,
thousands of miles from either coast. And although it is
the third most populous city in the US, it is considered
to be one of the most livable, compared to the more
congested and high-priced New York and L.A.
Of course, with world-class amenities, there’s plenty to
spend on in the Windy City. We crunched the numbers
from our LearnVest clients to learn more. Here’s what
we found by comparing Chicagoans’ spending across
expenses to that of urban dwellers in other US cities.1
Looking Good
Although often characterized as unpretentious,
Chicagoans still want to look their best. They spend
32% more than the average on personal care than nonChicagoans. They also spend 8% more on shopping.
We get it—nothing less than Canada Goose will do in
those winters!
1
Total sample of 13,628 people between January 2013 and July 2014.
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The LearnVest Guide to Money in Chicago
Moving on Up
Chicagoans also seem to prioritize their future: they
spend 78% more on business and career development,
which makes sense when media mogul Oprah is your
hometown hero. They also save a whopping 164% more
compared to non-Chicagoans. Fist bump!
Out and About
It seems locals are not often splurging on dining out,
but rather chowing down on comfort food and craft
beer or skipping dinner altogether to get to Wrigley
Field. Chicagoans actually spend the least on restaurants
and bars compared to their urban counterparts in other
areas of the US.
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The LearnVest Guide to Money in Chicago
The Bottom Line
Overall, Chicagoans seem well-positioned to make
some major financial progress. They’re thinking about
their future, and some are already saving. If you’re
ready to start tackling your own money goals, you’ll be
in good company!
Read on to learn about our budgeting strategy. It is
designed to be flexible based on your priorities. So
whether you’re splurging on Bears tickets, saving for a
Wicker Park brownstone — or even both! — we’ve got
you covered.
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The LearnVest Guide to Money in Chicago
Why Budget?
At LearnVest, we think budgeting is one of the
most important building blocks of a solid financial
foundation. But you shouldn’t think of budgeting just
for the sake of budgeting. Budgeting is important
because it is the means to accomplishing what you’re
working toward—a tool that, used month-to-month,
can help bring to fruition a big trip, paying off student
loans, retirement, etc.
So before we even get into the “how” of budgeting,
spend some time thinking about your “why.” What
do you value most? Chicagoans might have different
priorities than Americans elsewhere, so cookie
cutter financial advice might not apply. What are you
working toward in the next 5 years? 10? Even if you
don’t have all the answers or they change over time,
keeping them in mind will help you stay motivated—
and on budget.
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The LearnVest Guide to Money in Chicago
Eventually, I think Chicago
will be the most beautiful
great city left in the world.
—Frank Lloyd Wright
But when I go to Chicago,
I know I’m home.
—Hank Sauer
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The LearnVest Guide to Money in Chicago
One Number
Traditional methods of budgeting require a
considerable amount of effort. You sit down in front
of your Excel spreadsheet, and start to itemize. It’s
tedious—and often confusing. (Do cocktails go in the
dining out category? Or entertainment?) Itemizing
every purchase isn’t fun—or even really sustainable.
By creating an arduous process, you could be setting
yourself up for eventual failure.
We call our recommended budgeting strategy “The
One Number Strategy.” It requires a bit of number
crunching up front, but eventually leaves you with just
one number to think about each week.
At a very high level, the strategy is pretty
straightforward: subtract your fixed costs (like rent)
and your financial goal contributions (like saving for a
down payment) from your take-home pay (post-taxes).
Then you’re left with one number, which represents
the amount available for you to spend each week.
And you can put this amount toward whatever you
choose to prioritize. Want to spend it all on Uber?
Dining at Alinea? GrubHub? Second City tickets? It’s
up to you. No judgment!
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The LearnVest Guide to Money in Chicago
Here’s a more detailed breakdown of each bucket
you’ll be working with:
Take-home pay. This is the amount that hits your bank
account after taxes and 401(k) contributions.
Fixed expenses. These are costs you can anticipate
each and every month, without (much) fluctuation.
Your fixed expenses may include things like:
• Housing (either rent or a mortgage payment)
• Utilities
• Cell phone bill
• Gym membership
• Transportation
• Minimum payments on loans, credit cards, etc.
Goal contributions. These are things you’re working
toward that require savings. Your goal contributions
may include things like:
• Building an emergency fund
• Paying off student loans
• Funding a 529 Plan
• Contributing to an after-paycheck retirement account (like a Roth IRA)
• Saving for a big trip
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The LearnVest Guide to Money in Chicago
One number. Once you’ve subtracted your fixed expenses
and your goal contributions from your take-home pay, this
is your one number! We recommend dividing your monthly
total by 4, and tracking your spending weekly. It doesn’t
really matter what you spend your one number on—as
long as you’re not going over your total weekly amount.
(And if you do, the weekly tracking can help provide some
protection, enabling you to modify the following week so
your total monthly budget stays on track.) Instead of adding
up what you spent, you just keep track of how much
you’ve got left to spend.
You might spend your one number on things like:
• Groceries
• Lunches at work
• Eating out
• Shopping
• Entertainment
(We include groceries in flexible spending because even
though food is a necessity in your budget, how you spend
on food can vary—some weeks you might eat out more,
while other weeks you might actually cook at home.)
Monthly
take-home pay
Monthly
fixed costs
Monthly financial
goal contributions
Flexible
spending number
Take the time now to
crunch your numbers.
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The LearnVest Guide to Money in Chicago
Non-monthly expenses
At this point, you’ve calculated your basic budget, and
that’s a great first step. But to get more accurate, you
also need to account for non-monthly expenses—the
curveballs that can be some of the biggest budget
saboteurs. Go to the next section for a deeper dive
on these kinds of costs.
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The LearnVest Guide to Money in Chicago
Non-monthly
expenses
There’s plenty that happens on a non-monthly basis, and a
well-conceived budget needs to account for these. Some
you can anticipate when you think about the year ahead
(like vet bills and auto insurance premiums) and some
come up sporadically (like a black-tie wedding invite). But
do your best to estimate everything that could potentially
come up in the next year.
Your non-monthly expenses may include things like:
• Quarterly taxes
• Annual insurance premiums
• Vet bills
• School tuition
• Back-to-school shopping
• Holiday gifts
Add everything up and divide by 12 to arrive at your
monthly average on non-monthly expenses. Now add this
to your One Number equation:
Take-home pay
Fixed costs
Financial goal
contributions
Non-monthly
expenses
Flexible
spending number
So crunch these additional numbers, and you’re
well on your way to becoming a budgeting maven.
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The LearnVest Guide to Money in Chicago
Saving for non-monthly expenses
By accounting for non-monthly expenses proactively, the
One Number Strategy minimizes many of the curveballs
that come up with more rigid budgeting methods. But it’s
worth delving more deeply into how, in practice, to save
for these expenses.
Here are three ways to cover your non-monthly bases:
A single savings account. If you feel like you might get
overwhelmed by having a bunch of different accounts
(and you have the discipline to refrain from blowing your
entire savings on the fun stuff!), you might opt for a single
account. You’ve already estimated your annual expenses,
so take that number and divide by 12 to get your target
monthly contribution.
Multiple savings accounts. With this strategy, you would
open a separate savings account for each non-monthly
expense. For example, you’d set up a separate account
where you’d save money earmarked for your travel
expenses, and another for your insurance costs, etc.
Many online banks and credit unions will allow you to set
up multiple savings accounts with no minimum balance
required. (Just make sure that you aren’t paying fees.)
With this method, you probably won’t be as tempted to
take savings earmarked for real estate taxes, for example,
to pay for your next vacation. This method may also be a
good choice if you really like the clarity of seeing exactly
how much you have saved for a vacation versus holiday
spending versus insurance premiums.
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The LearnVest Guide to Money in Chicago
The balanced approach. With this strategy, you would
open just two savings accounts—a “boring” one for nonmonthly payments like insurance premiums, and a “fun”
one for things like travel and holiday shopping. This can
keep things relatively simple, while still helping to make
sure that you don’t use real estate tax money for
a weekend getaway.
Visualize this:
Set up your budget in your
free LearnVest account. 
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The LearnVest Guide to Money in Chicago
Work Your
Numbers
So now you’ve got a budget that reflects your existing
spending and saving. The next step is to evaluate how
well your budget aligns with why you are budgeting in
the first place. Revisit your answers from the first section.
What do you value most? What are you working toward?
If your budget isn’t getting you where you want to go at
a pace you’re happy with, its time to optimize. You’ll need
to look at adjusting other areas of your budget to beef up
your goal contributions.
Want to make progress on your goals
faster? Read on to re-evaluate your one
number, fixed costs, non-monthly expenses,
and take-home pay.
Another reason you may want to work your numbers
is if you can’t stick to your one number. After all, a
budget doesn’t just exist on paper (or in your LearnVest
account). It’s a practice. So if your one number is too low
for your desired lifestyle, you’ll need to figure out how to
adjust elsewhere.
Want a higher one number? Read on to
re-evaluate your goal contributions, fixed
costs, non-monthly expenses, and takehome pay.
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The LearnVest Guide to Money in Chicago
When our LearnVest Planners work with clients, we give
them three spending and saving options to choose from.
The idea is to help you make moderate progress on your
goals with minor adjustments to your one number, or
accelerated progress with more aggressive adjustments.
To us, it’s all progress. Whatever strategy you’ll actually
stick with is the right approach.
Visualize this:
One Number
The first thing to think about when it comes to adjusting
your one number is prioritization. If you love to travel and
want to spend on that, go for it and enjoy it! Just find other,
less-precious areas to curtail your spending and research
specific strategies to help you. For example, if you’re intent
on beers with colleagues on Friday nights, be sure to plan
more frugal ways to socialize the rest of the weekend.
(Hello, Millennium Park!)
Link the bank
account or
credit card
you use most
frequently to
see your current
spending. 
New research also shows that spending on experiences,
rather than stuff, is more fulfilling in the long-term.2 So you
can factor that in when it comes to picking between a
concert and new shoes.
Another strategy can be to go cash only for your one
number. If cash feels more “real” to you when it comes
to spending, then you may opt instead to withdraw cash
each week, rather than pay for purchases by debit. With
this strategy, you may want to visit the ATM each Friday,
withdraw your weekly amount—then make it last the whole
week. This can make it hard to go over budget, because
by the end of the week, your wallet will literally be empty.
2
http://www.hbs.edu/faculty/Pages/item.aspx?num=43404
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The LearnVest Guide to Money in Chicago
Monthly fixed costs
Take a good look at each item of your monthly fixed costs
and consider what kinds of adjustments might work for you.
For example:
Gym membership: Working out can be a great stress
reliever and keep you healthy, but many of us pay for a
gym we don’t use that often. Would you be more likely
to start running or follow DVD workouts at home?
Cell phone: Could you realistically downgrade your plan?
Consider less expensive alternatives for certain functions,
like texting via a free app (like WhatsApp) or making calls
via Skype.
Subscriptions: You might be paying for more than you
actually use or need. Could you downgrade your cable
package—or even cut out cable entirely? Are there
magazines or other services (Netflix, etc.) that you
could do without?
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The LearnVest Guide to Money in Chicago
Non-monthly expenses
Some of these are relatively fixed, like insurance
premiums, but you can consider adjusting your spending
on non-essentials like gifts, haircuts, or a new smartphone
or computer.
Take-home pay
One of the best ways to find more money in your budget is
to earn it. Make sure that you’re earning what you’re worth.
When starting a new job, don’t just accept the first offer
they give you. This is the best time to negotiate. Your
starting salary with an employer sets the baseline for all
future raises. Get the employer to name a number first,
and then when they do (even if the number is higher than
you expected) explain kindly that it was less than you were
expecting and ask whether there’s any more they can do
for you. Emphasize what you bring to the company that will
immediately add value and say that you therefore believe
you’re worth $X more.
The one area
of your takehome pay you
shouldn’t consider
trimming is your
pre-tax retirement
contributions.
Depending on your
age and how much
you’ve saved so far,
you should probably
be contributing
between 5%
and 20% of your
earnings.
When negotiating a raise at your current company, the first
step is to be a rock star at your job. Just showing up and
doing your job isn’t enough—you should be exceptional.
Quantify what your work has brought to the company
in terms of revenue, new accounts, or whatever other
measure is important to your company’s goals. And be
sure to consider the timing of your ask. Aim for a time
when your boss will have the energy to take on the new
task of working your raise into the budget.
In general, don’t talk about your own needs and wants,
but frame your request in terms of how you will or already
help the company reach its goals. Also, do your research.
And practice!
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The LearnVest Guide to Money in Chicago
Beyond
Budgeting
With this guide and your free LearnVest budgeting tool,
you’re well on you way to becoming a budgeting pro. As we
mentioned before, we feel budgeting is an essential part of
a solid financial foundation and achieving your goals.
But to get a holistic view of your money life, you might
consider working with a financial planner. They provide
professional, comprehensive guidance.
At LearnVest, we take financial planning a step further. In our
premium Program, you work with a financial planner
to create a financial plan designed to fit your budget, goals,
and lifestyle. We provide online tools, rich content, and
ongoing support to help keep you motivated and on track.
And we focus on delivering a comprehensive Program that
you’ll actually stick to.
Here’s to progress!
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The LearnVest Guide to Money in Chicago
You’ve earned a
$50 credit!
To get help with
budgeting and more,
join the LearnVest Program.
I’m ready 
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides
financial plans for its clients. Information shown is for illustrative purposes only and is not intended as
investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice
specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are
neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own.
LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are
not responsible for each other’s products, services or policies.
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The LearnVest Guide to Money in Chicago