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How to Live on $150K in NYC

Posted on 26 November 2015 by admin (7)

I have so many clients in New York City that I want to do a special blog just about living within a budget here where so many things are so expensive and where there are so many temptations. A lot of these suggestions and bits of advice apply to any major city in the world.

If you have any tips to add, please write! The more smart people we have thinking about this and sharing information, the better off everyone can be.

Rent Smart

With $150,000 or less in gross income you should not be paying more than $2,500 per month for rent.  However, given what rents are in NYC, we can stretch this to $3,000 or maybe just maybe $3,500 if other savings can be achieved. Think about your priorities:

Location: most of Manhattan and parts of Brooklyn are prime real estate, are you willing to look outside these areas?  Be a pioneer–look in an area that is not in vogue.  Before you know it, you have discovered the new hot ‘hood.

Roommate? Be smart about this – in order to get enough space for two people will your share of the rent be more or less than it would be in a smaller apartment? Do you trust that your roommate can hold up his/her share of the rent and utilities?

Also, Look for Deals: As everyone knows, real estate has taken a serious hit in the last 18 months in New York City. Comparison-shop and look for free first and/or last month rent. If you already are in a place, when your lease comes up for a renewal, ask for a discount or a minimal increase. Landlords are fighting to keep good tenants these days. There is a real cost to the landlord to replace you.  Those costs are your savings.

And Avoid Broker’s Fees: The real estate meltdown has led to owners paying broker’s fees in many cases. You can also go direct to the owner in many buildings, and in virtually all newly constructed buildings. Also, check online, No Fee Rentals lists buildings without brokers’ fees. Also, if a building you like has a doorman, ask what’s going on in the building regarding available units.  They are the best source for deals.

Buy a Metro Card. And use it.

Taxi fares are budget killers. Unless it’s 3am and you’re alone and drunk, take the bus or subway. New York City has one of the few 24/7 metro systems, take advantage of it.

Eating Out

OK, there are variations on this theme. First, don’t eat out so much – if you are truly inept in the kitchen there is help: Food Network’s How to Boil Water is a great place to start. Second, New York City is not only home to some of the most expensive restaurants in the world, it is also home to countless inexpensive ones. Choose wisely – Time Out New York does annual surveys of great places that are inexpensive.

Don’t Shop at Convenience Stores

Bodegas and corner markets are way more expensive than larger grocery store chains. New York is awash in budget-friendly stores these days: Costco is now in Harlem and Brooklyn; Trader Joe’s has stores in Brooklyn, Manhattan and Queens; and, Bed Bath & Beyond now carries drugstore items at prices lower than typical drug stores.  A little extra effort can trim five to ten percent off of a budget.  That’s HUGE!!!!

Shop Smarter at the Grocery Store

Don’t buy prepared foods

This includes the gourmet take out counter, frozen entrees, bottled sauces, meals in a box, and pre-cut and washed vegetables. Everyone can learn to cook basic things, and they are much healthier for you. Check out chef Jamie Oliver’s latest cookbook Food Revolution or his blog for simple recipes that are healthy and don’t break the bank.

Don’t buy mass consumer snack food

Why spend any money at all on chips and dips that have no nutritional value? What about those delicious organic snacks you ask? Go for it if that’s where you want to put your disposable income, but just remember, it’s a choice not a necessity. You need three squares a day, not snacks.

Don’t buy bottled water

Bottled water is more expensive than gasoline.  Think about that. New York City has some of the best and cleanest tap water in the country. If you aren’t sold on that, then invest a water filter like Brita or Pur. Save the environment from all those plastic bottles and save your money all in one fell swoop.

Shop Smarter in General

It has never been easier to find the best deal for anything you want to buy. Whether you are looking for a car, a tennis racquet, shoes, books, whatever – the list is endless – go online and look for best prices.  If you have an iPhone, download the Red Laser application and use it to scan bar codes while you are shopping and get the best price for that exact product in nearby stores and online. Then use that information to bargain – I did exactly that recently when buying some shorts – the store I was in matched the lowest price I found via Red Laser. Instant 50% discount thank you very much.

Cable

Heat and electricity are necessities, 1,000 channels of cable TV is a luxury. Just think about it – maybe you’d rather have the extra $100 (or more) a month for something more satisfying than reality TV.  There are alternatives via the Internet, HULU.com for one and there are obviously others.

It’s Not Just The Latte Habit

Much has been written about the damage the $3 latte does to budgets – $3 a day adds up to about $750 a year if you take a two-week vacation from both work and lattes. But, here’s the thing, it’s not just the lattes. It’s anything that doesn’t cost enough to make you think about it when you are buying it. Maybe it’s the $5 magazine you buy at the newsstand every month rather than getting a one-year subscription for $12. Or the bottle of water you buy on your way to work out for $1.50 rather than getting a case of 24 bottles for less than $10. Here are some other ways people commonly waste money when they could easily save it:

  • ATM fees – go to your own bank and don’t pay a fee
  • Buying a newspaper when you can read it online for free
  • Paying a penalty when you don’t pay your credit card bills on time (which will also likely get your APR raised to high double digits)
  • Buying a book from a full price retailer when you can borrow it from the library for free or buy it online at a steep discount
  • Buying a CD when you could just buy the individual songs you like on iTunes
  • The afternoon snack – bring an apple or a cookie to work, don’t pay quadruple for it at the mini-market
  • Buying brand name products when generic is available and virtually identical

Hope some of this is helpful and I’d love to hear your comments and suggestions to expand the list!

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7 Responses to “How to Live on $150K in NYC”

  1. Vince Scordo says:

    Good article, Scott. I think it’s all about “practical living” and I’m a big believer in 15-20 percent rule when it comes to how much of your income you should devote to rent/mortgage/property taxes.

    Your readers may enjoy some personal finance tips I learned from my immigrant parents:

    http://www.scordo.com/2010/04/on-what-italian-americans-immigrant-personal-finance-tips.html

    Best,
    Vince

  2. Young says:

    Great advice. To stretch it even further, we did the unthinkable… we left NYC (mainly due to our new born). My $$$ goes further in Saint Louis where not everything in the grocery store costs $5 or more.

    Cheers!
    Young

  3. Deb says:

    nice! other things that are budget killers: gym memberships and clothes. i see kids at my jobs spending insane amounts of dough on clothes that are going to wear out (or go out of style) in less than a year. i’m fortunate in that i can wear jeans to work most days, so i do. old navy is my friend! paired with a designer jacket [purchased from loehman's], i look just as hip as any other gothamer. as for the gym, i enrolled because i got a seriously good deal. but lots of people join shmancy gyms and never go. a surefire way to lose cash.

    brownbagging lunch 3 days a week will save you about 1400/yr. that’s practically a european vacation!

    i don’t consider myself a super tightwad. but i’m careful about where i will make my indulgences. i’d rather have big-deal experiences than big-ticket items. labels don’t impress me. great moments do!

  4. Mike Fertman says:

    Hi Scott,
    Very nicely done. I think you can change the $150K to $250K or even $350K.

    Rent aside, your advice would save my family thousands. And when we consider that everything you’ve mentioned is post-tax income, it’s even more.

    Thanks for everything!

  5. Bob Maxwell says:

    Vince,
    Good piece.

  6. ??? says:

    Excellent post, l quite agree with your conclusion. However lam having problem subscribing to your rss.


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