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I'm the kind of person who prefers to save and invest my money to achieve financial independence rather than live paycheck to paycheck.
So, I was wondering if you'd be willing share your personal experiences with this living in NYC. Do you find that living and working in the city makes it easier or more difficult to save for the future? Does the COL tend to eat up most of your income?
People will give you different opinions about this topic. Kefir's advice is QTF, "Savers save, and spenders spend, and borrowers spend more than they have."
If minimizing cash outflow to invest in the future is your goal. Then do not live in NYC. Work in NYC for NYC paycheck but live outside NYC so that you do not pay NYC income tax which is 2-4% and have lower rent. However nothing is for free so you will pay for that with longer commute, not living in city, and not experiencing the NYC life.
Another suggestion I have for you to think about is this alternative approach as well. Spend a lot on your rent to minimize your commute time which can add up to be at least 5-10 hours a week and invest those hours wisely. There is a Japanese word called Shokunin and simple translation would mean someone who has Mastery of a Profession. Reason why I said this is because you can invest those extra hours to work toward mastery of your profession.
I spent 2 years of my life painfully paying 55% of my income for a tiny studio in Brooklyn. Which is totally opposite of my financial philosophy. However I made this decision because the studio was 5 min from my work by foot and I invested my extra free time to push myself in my career. I put in at least hour or two extra a day at work, went to industry events/workshops/meetups, I took courses and gained industry standard certifications, etc.
2 years later, I was blessed and was prepared for a new job that gave me 38% boost in my salary. There are many ways to 'save' and 'invest' for the future. Think about them and pick one that works for you. Good luck.
People make it work for the love of the city, but frankly, if my focus was more on saving, I would have never moved here. I'm not suggesting financial irresponsibility, but for me, I had to be where I was happy.
Saving is easy if you know how to make a budget, know what you need to spend when to splurge and how to get the most value for your money.
As i mentioned before my wife and i make around 90k sometimes 95k combined and we easily save 20k and still enjoy everything about this city and other countries around the world from time to time.
If you're a smoker and a drinker, well thats a big chunk of your money being spent.
Suppose I have a wife and 2 infant children, a household income of $200K and I put 1/2 down for a co-op in Manhattan or Brooklyn. Plus, I telecommute 100% of the time for work.
Does this sound like a livable lifestyle where I can still save a lot of money - say, for my children's college, vacations, retirement, etc.?
Telecommute as in you would not need childcare? That would likely be your difference btwn whether you are able to save or not.
Take your gross income ($200k) and you have about $95/100k after taxes, 401k, healthcare. I'm not sure what you mean by 'putting half down for your co-op, but Id say $3.5k per month gets a reasonable place in manhattan that is suitable for an infant. That leaves ~4.5k ~ 5.5k per month for living expenses / savings contributions.
Eh, it all comes down to lifestyle and what your personal circumstances dictate. Living in the outer boros, for example, doesn't equate to "living like an animal". I, too, didn't want to live in a cube with roommates and I've commuted all my life so I was fine with living farther out to maximize my housing budget. I didn't want to live with others, including boyfriends. I purchased outside of Manhattan and got a sweet, largish sized apartment with high ceilings, wood floors, etc. for less than $1400/mo. Yes, this was back in late 90s, early 2000s and the common charges have risen since then, but even today I'd still be living in a 2/2 apartment for maybe $1600/mo. The extra money I saved in housing could have easily gone to moderate savings and personal enjoyment, especially since I would have made more money now than I did back then.
Right on. Very accurate statements. I am in the same boat.
Yep! I pay to be in Manhattan because I tried some other boroughs and there's just nothing like being in Manhattan. It was worth it to me. Roommates are a big no for me, but folks do what they have to do.
Suppose I have a wife and 2 infant children, a household income of $200K and I put 1/2 down for a co-op in Manhattan or Brooklyn. Plus, I telecommute 100% of the time for work.
Does this sound like a livable lifestyle where I can still save a lot of money - say, for my children's college, vacations, retirement, etc.?
Yes. As long as your housing costs aren't outrageous. And it also depends on what you mean by "a lot."
If saving is important to you why come to one of the most expensive states in the country ? Coming to NY to save would be like going to Italy while on a diet. You can do it but you won't be enjoying yourself to much.
if saving is important to you why come to one of the most expensive states in the country ? Coming to ny to save would be like going to italy while on a diet. You can do it but you won't be enjoying yourself to much.
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