“How much money do I need to live in NYC?”
I get this question all of the time and in all honesty, the answer really depends on what you mean by “live.”
Based on my conversations with people, many want to be able to go out at least twice a night, party all day and all night in an effort to take in “all the city has to offer.” First of all, unless you are leaving in a few days, there is no reason to try to do everything as soon as you get here. Second, unless you are a big baller shot caller, that kind of lifestyle can leave you broke and on the financial edge (not good in NYC where so many things can go wrong that will require you to spend money).
The key to having fun and being financially sound in NYC is balance. So, in order to give you some insight on what you will need to be happy in NYC, I am going to share personal information about how I “live,” how much I make, and how much I spend.
My Lifestyle:
Since I am originally from NYC, I will admit that I have some privileges. For one, family is near by so I do get occasional home cooked meals. I also have lots of fun hanging with my siblings without spending any money, and my friends who are from NYC have no desire to attend big events, fancy restaraunts, or other “must do in NYC!!111!!” type of activities. At the same time, I prefer to buy breakfast rather than make it (since that requires waking up early) and my friends, while being low key, still enjoy going out regularly. So my lifestyle expenditures are as follows:
1. Home based gatherings: once a week (with friends or family).
2. Eating out: a. Buying breakfast and/or lunch: 5 days a week (I usually buy breakfast). B. With friends: once every other week.
3. Movies, shopping, other entertainment: once every other week.
4. Academic/Volunteer/Professional events: at least once a week. This is what keeps me busy, allows me to connect with other people, explore the city, and are usually FREE!
5. Neighborhood: I live in Queens in a two bedroom apartment that was recently renovated. Everything I need is close by and it takes 15 minutes to get to Union Square (the hub of youth nightlife and shopping).
My Income:
Annual Income: $36,000 before taxes. Take home pay: $2224/month
My Budget/Expenses:
As I have mentioned before, I use the “All Your Worth” model as a budget guide. 50% of your monthly take home pay should go towards your “Must-Haves” things you can absolutely not live with out and cannot get out of paying (i.e. legally required); 20% should go towards saving/investments; and 30% is for you!
Here is a rough breakdown of where my money goes each month:
Must-Haves (Maximum 50%): 1,112
Rent and utilities: $720
Health insurance: $24
Transportation: $81
Cell phone: $45
Groceries: $125
Total: $995 (45%)
Savings (Minimum 20%)
ING: $445
**I really need to look into better investment/savings opportunities for my money. I’m kinda slow on this but Im working on it.**
Wants (Maximum 30%)
Text messaging for phone: $13
Gym: $60
Clothes: $200
Eating out: $250
Netflix: $14
Total: $537 (24%)
Notes:
1. I try to put any money that I do not spend in Wants and Must Haves into my Savings for that month. I’ll admit it doesnt always happen, but Im trying. Also, if I over spend in Must-Haves, I take it out of Wants but Savings is always at least 20%.
2. I clip coupons, making shopping lists, and often only buy what’s on sale (I grew up dong this so it’s a pretty hard but useful habit to break).
3. The Must-Haves are pretty fixed but Wants are always changing. When September rolls around, I’ll probably spend more on clothes for the season, and less on going out since students will be returning and I’ll have more work on my plate.
4. I owe $600 on my student loan (which I am paying off at the end of this month), I pay off my balance on my credit card asap (which is usually less than $100), and mainly use cash.
5. No cable/home phone/internet.
So far, so good. Clearly, I’m a more low-key person so my lifestyle and the way I budget isn’t for everyone. But one of the things I always do is look for inexpensive yet fulfilling ways to take in all that the city has to offer.
What I would like to do is have entry level professionals from other cities share how they manage their money. So if you’d like to contribute a piece, drop me a line!
Nice blog entry, def. something I have been reading a lot about recently. Its weird being a college grad and having a real job all the sudden. Even though most of us arent making $100K+ a year, its way more (and way more consistant) than any money I had while in college. (and no, im not making $100K a year)Actually our percentages and what not are very similar, although I am living in San Diego. My rent after utilities is about $725, however I opted to rent a room in a large house rather than go the apartment route which would of cost me $1200 a month plus furniture/tv/ etc. I am unfortunatly not in the same situation with family however, I moved out here from Ohio, so have pretty much been on my own with the whole thing. I did some budgeting excercises pre-getting my job just so I could kind of estimate how much I would need to make to get by. I live very similarly to you however, dont really go out a ton, and still owe a lot on my student loans. A few things that I have found very helpful starting out:
1. Invest fully in your company’s 401K to at least the company match- – it is free money, and if your company will give it to you, you might as well take it. It gets taken out of the top of your pay check, so after awhile you almost forget that you are losing it.
2. I use a credit card for all of my purchases. You might as well take full advantage of the cash back percentages and incentives for using credit. That being said, I put all my monthly expenses on credit card, and pay off the full balance every month, so really it isnt costing me anything, and I get an extra month to keep that money in my savings account (washington mutual 3.75%) to accrue interest.
3. I get on a website called slickdeals.net. People go on there to tell others when they get a really good deal on something (electronics, cell phone deals, even groceries and coupons). I have been able to make my “wants” category go much further than it would have otherwise.
Anyway, nice to know someone else is in the same boat, trying to carefully plan for the future, yet still trying to have a life now. Good luck!
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Great entry! I would love to contribute how I spend my money in Philly, but honestly I need to learn how to budget first. I definitely have that problem of spending too much on wants and my main priority is to cut down on unnecessary things like eating out so much.
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@Micah: thanks for the tips and sharing your experiences! Sometimes I think people are shy when it comes to sharing their expenses, but when we start talking about it we learn about deals and may even see holes in how we spend our money.
@Passionista: I lived in Philly last year and never got around to talking more fullyabout my experiences in that city. It has one the largest concentrations of colleges of any city inthe country so it is def worth exploring from an “entry level” perspective. I would love it if you wrote about your experiences. When it comes to your budget just start really simple. If you like eating out, make that a part of your budget! I budget it iced coffee because I know that there is no way in hell Im not going to enjoy a nice french vanilla iced coffee on a hot summer day. When people think of budget they think of just must haves, but include your wants and you can better see where your money goes. Whats the point of working if you cant enjoy the fruits of your labor!
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Courtney Reply:
January 16th, 2011 at 7:59 pm
@Ajlovesya – Give me pointers please!
Ill be moving to nyc when i finish my masters (fingers crossed) and have heard that i wont find a place unless i annually make 40-50 times the rent.. what are your experiences with this?
can you give me pointers on where to look for rental property?
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I’ve wanted to move to NYC for the last two/three years now. I can admit to the only reason I have not done so is because I want to be financially stable…and I’m from and live in LA. Thanks for the insight. Balance is the key to life!
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I love this post – it is very inspirational!
A big issue for me is income. I always feel that I could actually budget, IF I had enough money to do it with. I make just under $30K, and my take home pay is about $1,508 per month. I do not live in NYC; so you think my cost of living would be significantly lower…however it is not.
Rent & Utilities – $600 per month
Cell phone – $75 per month
Car insurance – $125 per month
I have revolving credit card balances of about $500-$700 that I make minimum payments on but then usually pay them off in “splurges” (every 4 months).
So I would say I have about $500 of diposable income. I admit I have access to more than I pay for; for example I have cable internet access at my grandparent’s house; and access to a flat-screen plasma with satellite at my mother’s house. However it is shocking that at age 30, I can’t afford this on my own.
The big killer for me is my debt — which is all in student loans. About $75K. I can’t handle the monthly payments on them, so I don’t dare take on any more debt! I am currently in grad school (MBA program) which will increase that by approxmately $15K (I opted for an MBA program at a state school…mainly to avoid the high ticket price of an MBA!). In the long run, I will knock off 3 new cars and buy a modest home – which will hopefully compensate for the student loans.
I am very interested in looking into and then blogging about average US salaries. Last year when I was job searching, it seemed as if a lot of non-entry level jobs were only willing to pay $30K. These are positions that are asking for the candidate to have a 4-year degree and several years of experience! Yet somehow the average salary of my position (management technician/office support) is a good $10-15K higher than what I make. Across my organization (a state college), the pay seems to be similar. The difference is that most of my co-workers are females who are not sole-supporters!
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I came across this site today, and I just wanted to say how informative and, well, cool this site is. The information you shared in this post was fantastic, especially the break down of expenses. Thanks for sharing your experience and tips.
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ajlovesya Reply:
February 6th, 2010 at 4:00 pm
Hey Alana! I am glad you find my blog useful and I hope you stick around! If you ever have any questions feel free to email me!
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Love this post. I always wondered how people afford to pay the ridiculous rents around NYC. For myself, I live in northern New Jersey and make about the average wage for this area (55k). Still it is impossible to find an apartment on my own for 30% of take home pay (the general rule). What I’m finding from the locals is many live with their parents much longer than usual or have roomates. The ones that don’t do this will have at least 50% of their income go to rent/utilities.
I budget similar to you with multiple ing savings accounts. 27-30% rent/utilities, 20% long term savings, 15% bigger purchases (computers, etc), 20% grocery/gas/entertainment, 6% emergency fund, 5% 401k. I’m not good about balancing to the penny but always make sure these percentages get paid.
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Great breakdown of living in NYC. I’m currently living in NYC in Brooklyn, earning $15/hr for a 40hr week and my rent is $775/month all utilities included. I also own a precious cat so I do have a dependent hahaha I do live comfortably, rarely struggle so here are my tips…
Going out:
-take advantage of happy hour! Drinks are usually half price off and some places also include cheap eats. 1849 in Greenwich V for example does 20c chicken wings until 6pm (use to be til 8pm but they changed it after xmas boo). Most happy hours are til 8pm/9pm but there are other places that go a bit later like Verlaine in L.E.S (til 10pm). I try to avoid drinking after happy hour as cocktail prices double!
-find clubs with no entrance fee or cheap-ish entrance fee. They are often more low key and casual.
Utilities:
-although not much can be done on this, learn to be green will save money. Turn off the water while you brush your teeth, take showers not baths (and quick showers), turn off water while you wash the dishes, turn off all electrical appliances when you are not at home or going to bed (putting it on standby still costs you), use more efficient lighting…
Food
-make at least 1 meal a day whether breakfast, lunch or dinner. I make a big dinner so I can have enough to take as lunch the next day. If I’m in a rush in the mornings, I’ll put my cereal into a ziploc bag and eat it at work (I like mine dry so don’t need milk). Not the classiest thing a lady can do but hey, that money saved lets me splurge on my mocha coffee!
-butchers and local grocery markets are often cheaper. When you get to know them and you become a regular customer, they will often give you discounts. You’re also doing good by supporting local farmers!
Exercise
-I don’t go to a gym because I know myself too well. Instead, I follow up my yoga with a dvd and do fun activities like walking and cycling with my bf or friends during the weekend.
Clothes
- I invest in good quality clothing that will last me for years. Although trends change and personal tastes change, classic items will always stay on trend.
That’s all I can think of!
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Courtney Reply:
January 16th, 2011 at 7:56 pm
Julia,
Love your budgeting! I’m working on my masters and hoping to move to nyc when i’m done…i’ve been kind of discouraged though because of the price of rent and the outrageous income requests before getting an apt… So i’m curious…how/where did you find an apt for $775 and what was necessary before moving in (ie. income guidlines and references)
I’ll be coming from the midwest so i wont have any local refrences…however, i’m transferring jobs with a company i’ve now been with for 3 years. so that should help right???
any advice would be great!
-Thanks
Courtney
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Very helpful and inspirational post! I literally just sat down and planned all of my expenses for the next 6 weeks and found it to be really easy and now I actually know what I’m working with.
I plan on moving to NYC within the next year. Time to start saving!
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Hi AJ-
Great post. Are you planing on doing a update? Since this was in 2008. I’d like to see how you’re doing and your progress would be cool to read about.
Later
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