I recently heard that a medium size dog will cost an average of about $800 to $1000 per year, after the initial cost.
Don't forget you'll want to keep some money in reserve for unexpected vet costs. Emergency vet bills can add up VERY quickly. They do sell pet health insurance -- around $25 to $50 per month. It's easy to say, "I'm not gonna pay that!", but one trip to the doggie emergency room, can get you saying, "I wish I had the insurance!" I'm speaking from experience.
Make sure you're ready for the commitment. A dog will change your lives. Smaller dogs need to "go out" every 4 to 6 hours, and they (not you) set the schedule. This may mean 6:00 AM. And when the switch back to Standard Time rolls around, it may mean 5:00 AM (dogs don't understand the whole, "Daylight Savings Time" thing). Unfortunately, animal shelters are filled with pets whose owners overestimated their ability to take care of them.
The point is that the cost is greater than just money. My parents recently adopted their first dog. They are retired and have plenty of time to devote to it, but they'll be the first to tell you that they had no idea what a big, life-altering commitment it was going to be.