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I apologize for the confusion. I came across several studios at that price. I have seen many posts about monthly rent being 1/40 of yearly income. 75,000/40 comes out to $1875, thus the price range I have been searching for. But now you got me thinking... I will keep looking
The 40x rule doesn't really work when income is substantially below 100,000/yr because the basics in the NY area is so expensive.If you spend 1/40th of your income on rent you will feel very restricted and/or not save what you should.You should try to save around 15% at least....more if you can.
The 40x rule doesn't really work when income is substantially below 100,000/yr because the basics in the NY area is so expensive.If you spend 1/40th of your income on rent you will feel very restricted and/or not save what you should.You should try to save around 15% at least....more if you can.
This is entirely subjective. I spent 1/40th on rent and manage to save and have a very expensive hobby. It's more than possible—it's about what you prioritize. I already have a substantial savings, so for right now, I'm OK with not saving as much and living in a nicer apartment.
This is entirely subjective. I spent 1/40th on rent and manage to save and have a very expensive hobby. It's more than possible—it's about what you prioritize. I already have a substantial savings, so for right now, I'm OK with not saving as much and living in a nicer apartment.
What's your income ? The 40x thing gets more manageable as your income goes up.
I am 23 and will be graduating college this May, and have secured a job that pays 75k base + bonus in the financial district. My signing bonus is 15k, and I think it's safe to expect the same amount or more in subsequent yearend bonuses.
I am primarily looking into jersey city (exchange place, newport) for the lower rent and transportation convenience. Further, I have had enough with roommate problems (not cleaning his sh** up,having strangers stay over, etc.) during both my undergrad and master's years, and hope to find a studio for myself.
Having said all this, I have come across several rooms for roughly 1.8k/month. Is this a reasonable amount to spend on rent each month? I've done some analysis on my own with the following cash flow. This is not including my bonus. Please advise..
Monthly cash flow:
Base Salary $6,250.00
Tax(33%) $(2,062.50)
Rent $(1,850.00)
Utility $(120.00)
Amenities $(62.50)
Food per month $(930.00)
PATH $(73.00)
MTA $(30.00)
Student Loan $(200.00)
Necessities $(100.00)
Hobby $(300.00)
TOTAL SAVINGS $522.00
Firstly, your net salary is not going to be over 2k/month.
Also, if you're working for a half decent company, you're going to have health/dental insurance + 401k, which is going to drive your net salary even lower.
Need to re-do your math, broseph.
Also, get a roommate in a brand new building with all sorts of amenities. Better than paying the same for a piece of **** studio without an elevator and a doorman.
First of all, congrats on getting the offer, welcome to the financial capital of the world. The food budget does seem to be on very high-end, on the other hand, if the hours at your job are going to be insane you have no time to cook, and end up buying prepared food almost all the time, it does sound reasonable. In that case, use the following techniques-load up on breakfast staples such as eggs, cereal, frozen bagels, you are set for breakfast. Learn what the late night work dinner policy is at your firm, that is, how much do they cover, order to the limit every time, save half for tomorrow's lunch.
As others said here, you have not included some costs-does the company pay fully for health insurance, or do you have to shell out some co-insurance? 30 bucks for metrocard sounds way low if you are using it every day.
In terms of where to live, I would also recommend looking in Queens: Astoria, Long Island City, Woodside, Sunnyside, are all really close to the city, within your price range.
I get a tinge of resentment in this thread and a lot of folks are giving you stupid advice.
First off, your tax rate will not be 33% . Taxes are high in NYC but a the end of the year, with a few standard deductions, your overall rate will be in the 25- 28% range.
My advice to you is that at your age and career potential it is always better to spend a few k more than less. Just spend it and enjoy in a more or less smart manner. In essence, it's stupid to have a meal at $75 but perfectly ok to take a great trip for 3k in my book.
Saving 20k/ year is more than fine so long as the money that you are spending is spent on high utility goods/ services.
When you're old, a few more dollars will not make or break or you.
Live a little but do it in a way which maximizes your utility. For everyone that's different. If spending 5k more per year to live in a nicer area/ apt makes you happy than do it.
Also, depending on the rate of your student loan, I'd try to pay that down quicker. No reason to pay intrerest unnecessarily and the loan is probably not large enough to justify keeping it for the interest deduction con tax time.
I get a tinge of resentment in this thread and a lot of folks are giving you stupid advice.
First off, your tax rate will not be 33% . Taxes are high in NYC but a the end of the year, with a few standard deductions, your overall rate will be in the 25- 28% range.
My advice to you is that at your age and career potential it is always better to spend a few k more than less. Just spend it and enjoy in a more or less smart manner. In essence, it's stupid to have a meal at $75 but perfectly ok to take a great trip for 3k in my book.
Saving 20k/ year is more than fine so long as the money that you are spending is spent on high utility goods/ services.
When you're old, a few more dollars will not make or break or you.
Live a little but do it in a way which maximizes your utility. For everyone that's different. If spending 5k more per year to live in a nicer area/ apt makes you happy than do it.
Also, depending on the rate of your student loan, I'd try to pay that down quicker. No reason to pay intrerest unnecessarily and the loan is probably not large enough to justify keeping it for the interest deduction con tax time.
Good advice on paying the student loan quicker if possible. Once the loan is paid off, it will do great things for your credit and pay the way for a mortgage. Starting out with 75k plus a 15k bonus already puts you c close to 90k.
Beyond that, you have a good education and a good job, there's not really much more anyone here can say. Congrats on the offer!
Don't forget dry cleaning, laundry, and shoe care services that can be another $150-$200+/month, depending upon wardrobe and whether or not you need a specialist for a particular garment.
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All the world's a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.
~William Shakespeare (As You Like It Act II, Scene VII)
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