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Old 11-06-2009, 10:45 AM
 
Location: Manhattan
120 posts, read 393,438 times
Reputation: 63

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i don't know about basing the 25% rule off of net income. While it definitely is ideal - it can be misleading - especially if you pour a lot of money into pretax savings like a 401k.

I think the widely accepted guideline is 28% of gross income. So if you can get housing costs down to below that like, 25% or 20% - you will be golden.
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Old 11-06-2009, 11:03 AM
 
Location: Beautiful Pelham Parkway,The Bronx
8,389 posts, read 19,619,570 times
Reputation: 6211
Quote:
Originally Posted by snifferer View Post
i don't know about basing the 25% rule off of net income. While it definitely is ideal - it can be misleading - especially if you pour a lot of money into pretax savings like a 401k.

I think the widely accepted guideline is 28% of gross income. So if you can get housing costs down to below that like, 25% or 20% - you will be golden.
I learned the 25% of net in home economics classes back in the 60's when they used to teach such things in school.It is obvious that it has become another of the many pieces of lost wisdom that are no longer taught so that many people don't even have a clue.Search the threads on this board and see how many people seem to think it is perfectly acceptable to spend 50% or more of net,let alone gross.It is frightening.

Yes,I agree that 28% of gross has become the accepted norm but not sure it should have anything to do with 401's or anything else.The 25% of net was accepted at a time when most people had a pension coming from their employers which most people no longer have.

I am thankful that I am much more comfortable with the 25% of net that was drilled into my head even though I will get a pension as a city employee.And I can still hear and heed my sainted mother's voice telling me to put at least 10% into the bank ON MY WAY to the bar( she was Irish) on payday.Another lost piece of wisdom.
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Old 11-06-2009, 11:55 AM
 
581 posts, read 547,641 times
Reputation: 117
Quote:
Originally Posted by TurtleCreek80 View Post
Yes- you are missing some BIG things:

-Savings!!! Even if it's just $50/mo, you need savings in case your AC window unit breaks or you have to pay an ER co-pay or have unexpected medical expenses not covered by health insurance.

-where is "home"? Will you need to buy plane tickets to go home for holidays, family & friends' weddings, etc? Will you need to buy Christmas gifts or bday gifts?

-renter's insurance. Just $150 a year or so for your contents, but you NEED it. Know a girl who lost everything when her apt on 86th street caught fire.

-Retirement. Seriously, start now, even if it's just 1% of your salary. You will not want to be living in a cardboard box and eating cat food when you're 70.

-Clothing. Shoes wear out, you'll need to get new coats or work clothes.

You are too close to going into major credit card debt when (not IF) you have unexpected expenses. Take the UWS share until you can increase your income by $1,000 net per month.

I won't buy A/C. I agree with the copay. but I have 180 dollars each month for that.

renter insurance, no. I have found a lady who is moving out in the same day I am moving in. she said she wants to sell a bed, a desk, 2 book shelves, a sofa, a table for $500. I think I will take it. so it is not worth 150 every month

Saving?? in my current job, I don't think I can save. it is too little money and I know that if I take that studio, I will not be able to save.

Home? far away. very far away. Costs me almost 2000-3000 to visit my family. but I have this money on the side just in case there is an emergency and I need to see my ill father.

Retirement? I don't know. My future is really unclear. I am not happy in my current job and I am dying to change it but not now. I look around and see people are getting laid off so I keep my mouth shut for now.

I am planning on studying and looking for a better job.

Clothing: I know I won't have money for clothes. I am not sure about that one yet.
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Old 11-06-2009, 12:07 PM
 
581 posts, read 547,641 times
Reputation: 117
I just want to add that i am a foreigner living in the US for about 5 years. I have been living in my current residence for 4 years .

I know that I should not rent an apt now but I can't resist my feelings to be in a HOME. I think I started to get emotionally tired.

Living in Manhattan means safety to me. I have been attacked a few times and I will never be able to sleep at night alone in a studio in one of the boroughs. that is why I am trying to find something in the city.

I would prefer to stay in my current residence but there is a max stay limit which I reached. They are pushing me out and I am tired of this.

Maybe it is clear now why I am spending 150 on a gym membership. i will have to think about this too. I might cancel it but not sure yet.

My friends are also pushing me to stay in the residence because I need to study more to get a better job.

I am a little confused.
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Old 11-06-2009, 04:56 PM
 
11,671 posts, read 21,231,508 times
Reputation: 10057
Quote:
Originally Posted by safina1 View Post
I won't buy A/C. I agree with the copay. but I have 180 dollars each month for that.

renter insurance, no. I have found a lady who is moving out in the same day I am moving in. she said she wants to sell a bed, a desk, 2 book shelves, a sofa, a table for $500. I think I will take it. so it is not worth 150 every month

Saving?? in my current job, I don't think I can save. it is too little money and I know that if I take that studio, I will not be able to t.

You cannot afford to not be saving money. It may not be a broken AC unit or a co-pay, but I can 100% guarantee that you will have an emergency or unexpected expense in the next year or two and you NEED savings to avoid going into major credit card debt to cover the expense. What will you do if you're the next one laid off and it takes you 5 months to find your next job??

I know you want a home, but if you are going to remain in Manhattan, you need an additional $1,000 of monthly income to live alone. You cannot afford to live alone. You just can't. So you have a few choices:
1. Take the room you can afford, suck it up for a year, and reevaluate your financial situation next year.
2. Leave Manhattan and find somewhere you can afford to live on your income- New Jersey? Staten Island?
3. Take the studio and pray hard you don't have ONE unexpected expense and realize how close you are to being out on the streets or in a shelter because you have absolutely no financial safety net.

Choices 1 & 2 are your only viable options. Sorry, but it's the truth.
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Old 11-06-2009, 05:49 PM
 
10,601 posts, read 20,730,171 times
Reputation: 8135
Renters insurance is $150 a year, not $150 a month. There's a big difference between the two.

I agree with those who say that you cannot afford this. It also seems like you do quite a bit of rationalizing. Have you really been attacked in the outer boroughs of NYC and that's why you don't want to consider anything but Manhattan? That comment makes me wonder if you've ever been to any of the boroughs besides Manhattan. Do you think living in any other borough besides Manhattan means living in a forest or a wasteland?

Have you been to Queens, Brooklyn, or the Bronx? I mean out in a neighborhood, walking around, seeing what there is to see and not just passing through on a train or in a car from the airport?
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Old 11-06-2009, 06:27 PM
 
581 posts, read 547,641 times
Reputation: 117
I have been to several areas in Brooklyn. I lived in Ridgewood- Queens and it was a nightmare. I lived in Jersey City and hated it there. I have been to the bronx and Staten Island a few times. I was chased by a gang in Harlem when I was on my way to visit my friend who lived there.
I didn't feel comfortable and safe until I lived in manhattan.

I have been looking on GL to find a room in an apt in Manhattan but the prices are the same as my studio. some rooms are even more expensive than a studio. $1400 a month for one room??

anyway, maybe my best bet would be living in the residence. it is just inconvenient I work in midtown east and I will be staying in the UWS. that means two trains back and forth.

again, I don't care about renter insurance. the whole furniture would cost 500 bucks.
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Old 11-06-2009, 07:13 PM
 
Location: New York
477 posts, read 1,207,844 times
Reputation: 297
I admire you for trying to follow your dream, but I am afraid that you have this idea of manhattan that is not realistic.

Honestly, Manhattan is mostly safe, but I think people who are not from here have this idea in their heads that this is sex and the city, and you can walk around anywhere late at night or that people don't break into apartment buildings. It happens more that you think it does, and if you think you are better off in Manhattan than many parts of queens, brooklyn, the bronx or staten island you are kidding yourself.

Your budget is going to to be very tight if you even have enough money to begin with. Things add up very quickly here. In Manhattan and even many parts of Brooklyn there is no such thing as renting a room from someone and paying a cheaper price. Landlords charge each tenant the same price for a 2 bedroom as they would 1 tenant for a 1 bedroom. NYC is unique this way, other places a 1 br may be $1000 and a 2 br $1700. Not so here. If a 1 br is 1500 than a 2 br is 3000.

If I were you, I would save for a year, have some $ put away for when you do move here in case you lose your job or you have any other emergency.

I just had to add there is no way you are going to survive a summer in Manhattan without A/C, and even if you want to suffer, if you have a roommate who wants it you are going to be responsible for splitting 1/2 of the electric bill and wind up paying for it anyway.
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Old 11-06-2009, 07:30 PM
 
581 posts, read 547,641 times
Reputation: 117
nycgirl. Thank you. I just wanted a sublet or a shared living situation in manhattan. usually sharing with other people is cheaper than renting and living on my own. but not in Manhattan. I have found that if I share with other roommate in UES, I would pay the same 1200 or even 1400 dollars a month. I am just wondering why people would pay that money for a shared situation because that is basically the price of a studio.

what if I stay in a studio for a year and see how it goes?the lease is only for one year.
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Old 11-06-2009, 07:38 PM
 
Location: New York
477 posts, read 1,207,844 times
Reputation: 297
Quote:
Originally Posted by safina1 View Post
nycgirl. Thank you. I just wanted a sublet or a shared living situation in manhattan. usually sharing with other people is cheaper than renting and living on my own. but not in Manhattan. I have found that if I share with other roommate in UES, I would pay the same 1200 or even 1400 dollars a month. I am just wondering why people would pay that money for a shared situation because that is basically the price of a studio.

what if I stay in a studio for a year and see how it goes?the lease is only for one year.
From what I have seen, the shares are slightly cheaper than studios, but this is not always the case. If your share of a 2 br is $1200, a studio will probably be $1400+. They charge for the luxury of living by yourself which is not possible for many people who want to live in NYC. Another pretty common thing about shares is that if the other person already has cable, internet, phone or whatever they will likely keep that and you will be responsible for half. The same goes for the electric bill. All of these things can be expensive.

Remember too, that you are going to have to prove that you make enough money. If the landlord thinks that with your income you are not going to be able to afford it, they will not rent to you. NY has tough laws that protect the tenant and not the landlord, so they are usually pretty strict about who they rent to so that they are not stuck with a tenant who doesn't pay and they can't get out of the apartment.
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