How Do People Live A Comfortable Life Making Less Than Six Figures In Expensive Cities?

central-parkNew York would be the greatest city in North America if it weren’t for three things: 1) Tough weather for half the year, 2) Never ending crowds, and 3) outrageous prices! I’m currently spending the first week of my four week vacation/blogging research tour in Manhattan and I’m blown away by how much more expensive Manhattan is than San Francisco.

I used to live downtown when I worked in finance from 1999-2001 as a fresh college grad. My base salary for the first half of the year (started in July) was $40,000. Even then I thought $40,000 was pretty low as I could only afford to share a $1,800/month studio with a buddy of mine from high school after contributing to my 401(k). Thankfully our salaries were raised in the second year to $65,000 after Wall St. decided to pay new first year analysts $55,000 instead of $40,000. Still, a base salary of $65,000 wasn’t much to write home about when one bedroom condos were selling for 5X.

Fast forward 14 years later and the 600 square foot one bedroom condos in decent areas of Manhattan are now trading for $750,000+! I’m pretty familiar with these prices because my studio roommate actually bought a $325,000 one bedroom condo near the United Nations in 2000. He’s been looking to upgrade to a two bedroom condo with his future wife, but he’s taken aback by the ~$1.5 million price tag. They just might move out of the city instead. If a condo owner who saw his property’s value grow by 130% can’t even afford to comfortably upgrade to a two bedroom, can you imagine what a renter during this same time period is thinking?


First of all, making $100,000 a year puts you in roughly the top 10-15% of nationwide income earners. $100,000 is a great achievement no matter where you live, but it’s not that great if you live in an international city such as New York, San Francisco, Hong Kong, London, Tokyo, or Paris. It’s really important for those who make much less to recognize high salaries are generally earned in expensive locations.

Let’s break down what a typical $100,000 earner will get after funding their retirement savings and taxes. There is no excuse for anybody making $100,000 or more to not max out their 401(k) for a more financially sound retirement. Here is my 401(k) post by age for your reference.

$100,000 INCOME

Gross Income: $100,000

401(k) Max Contribution: $17,500

Taxable Income: $82,500

Effective Tax Rate (includes city, state, federal, SS tax, health insurance): 30%

Net Income: $57,750

Monthly Net Income: $4,812


Rent For One Bedroom On 71st and 2nd Avenue: $3,300

Food: $700. He eats out about 30 meals a month and cooks his remaining 60 meals at home (breakfast, lunch, dinner). Groceries are not cheap in Manhattan.

Beverages: $100. He only goes out for drinks with his friends once a week. Beers are $5-$15 and cocktails are $8-$15.

Cabs: $100. From the Upper East Side to Grand Central costs about $15 one way. It’s $20 to go all the way downtown. He tries not to take cabs, but it’s an inevitability.

Subway: $112. It’s $5 to commute round-trip. Back in 1998 one-way fairs were only $1. $112 is now the monthly all you can commute pass cost.

Cable / Internet: $100. Pretty standard package for basic cable and internet.

Entertainment: $200. This category includes movies, shows, and events. Movie tickets cost $15 and Broadway shows cost $50-$100 for the cheaper tickets.

Mobile phone: $50. Family plan i.e. subsidized.

Travel: $150. Cost to go see his family in New Jersey and the occasional fishing or skiing trip up north.


As you can see from my example above, someone making $100,000 a year in New York City is NOT living it up. Going out once a week with friends is hardly excessive in a city that seriously never sleeps. He does his best to walk or utilize the subway and his entertainment budgets is pretty tiny for all the NYC has to offer.

At least he is maxing out his 401(k) to the amount of $17,500 a year which is crucial since he has nothing left in disposable income. Maxing out his 401(k) should result in over $200,000 in 10 years due to company match and conservative performance estimates. If he wasn’t maxing out his 401(k), he’d have an extra $1,200 a month to spend.

Finding a decent one bedroom for under $3,000 is not particularly easy unless you know someone who has a rent controlled apartment. If you want to lead a less comfortable life, then you can find studios for around $2,000 a month. But, are you really going to be happy still living like a college student making $100,000 a year? Probably not since you’re closer to 30 than 20. Where are your parents, girlfriend, boyfriend, and relatives going to sleep? One solution is to find a significant other who is willing to split your $3,300 a month one bedroom cost.

Lunches in NYC cost on average $10-15 after tax and tip. You could eat a Shackburger at Shake Shack and drink free water every lunch for $5.01 like I did for two days, but you might die of heart failure at a young age. You might also turn so big that your armpits emanate massive odor and heat on the passenger next to you like I felt sitting in the middle sit on a red-eye flight over!

There’s a saying by New Yorkers to expect to burn $100 each evening you go out. After going out every evening I can see how this saying is true. My dinner at Strip House cost $77 followed by $35 of drinks at Sparks Steakhouse where a family friend works. Then of course I had to pay another $15 cab ride back home because it was 1am. At least my buddy and I split the bill.

Of course we could have gone to a cheaper place to eat like Kunjip in Korea Town for a more reasonable $25 a person. We could have drank our alcohol at home and ordered water at the bar instead. But come on. It’s good to live it up once in a while.


Although some of my friends in expensive cities who’ve now been working for over 10 years will scoff at $200,000 a year in income, I continue to believe that $200,000 a year per person is the ideal income for maximum happiness. To put things into perspective, a 30 year old second year Associate makes anywhere from $170,000-$250,000 on average in finance as do second year lawyers. 32 year old doctors who don’t do fellowships make $150,000-$250,000 as well.


Gross Income: $200,000

401(k) Max Contribution: $17,500

Taxable Income: $182,500

Effective Tax Rate (includes city, state, federal, SS tax): 35%

Net Income: $118,625

Monthly Net Income: $9,885


Rent For Two Bedroom In Mid Town: $5,500

Food: $1,000. Now we can afford to eat four $100 dinners a month with $500 left over for lunch and breakfast.

Beverages: $500. You can go out twice a week now or feel more comfortable buying a couple rounds of drinks for three friends four times a month.

Cabs: $200. Instead of taking the subway when it’s super hot or really late, you get to take a $15 cab ride a little more often for convenience.

Subway ($2.5 one way): $114. Same old monthly commuter plan.

Cable / Internet: $100. Same old package.

Entertainment: $500. A little more breathing room here because now you can afford to take out a date!

Mobile phone:  $100. Upgrade to a larger data package because you’re on the move more often.

Travel: $300. A couple more trips out of the city. This time, to the Hamptons.

Total Expenses: $8,300


We can argue the ideal income to live in an expensive city all day long. But as you can see from the example above, $200,000 will allow you to max out your 401(k), save $20,000 (10%) in after tax income and spend freely on much of what NYC has to offer. Anything more than $200,000 is nice, but higher tax rates are really going to eat into your earnings. It also usually takes more effort to earn in the $250,000+ range so that’s a negative. (See: How Much Should I Have In My 401k By Age)


Crepe Cake Lady M

Lady M Confections on 78th St. is absolutely amazing. You can get a 20 layer crepe cake for $10 after tip and tax.

Shackburger at Shake Shak for $8.85.

Shack Stack at Shake Shack for $8.85. Get the Shack Burger for $5.01 instead.

bag of cherries

Bag of Rainier cherries at Fairway for $19! $8.99/lb

666 Park Avenue TV Show Building

The Ansonia on 74th and Broadway. Two bedrooms are $7,000-$8,500 a month

Roof deck at 200 Water St. downtown FiDi. Two bedrooms are $5,000 a month.

Roof deck at 200 Water St. downtown FiDi. Two bedrooms are $5,000 a month.


Given only 13% of Americans make more than $100,000 a year, it’s clearly possible to have a good life living in an expensive city making less. This goes for folks living in other expensive international cities as well. Some of the things I’ve thought of that allow people to live and save are:

* Co-habitating with a girlfriend, boyfriend, spouse, or roommate.

* Living in a rent controlled apartment.

* Working two or more jobs.

* Living outside in the outer burroughs and commuting in.

* Living off the generosity of one’s parents.

* Living off a wealthy spouse.

* Working in the food industry so you don’t have to pay for your meals.

* Working as a property manager or hospitality industry to save on rent costs.

* Living for free in your parent’s apartment.

* Living off a trust fund.

If you can take care of your housing situation everything else can be overcome with cheaper options. For example, you can eat McDonald’s for dinner rather than go to Le Bernardin. Entertainment-wise, you can play frisbee in the park instead of paying $100 for a Broadway show.

I do wonder how parents afford to send their kids to private schools given public school systems in big cities are often in need of improvement. There’s the Citywide Gifted & Talented programs and Anderson, Hunter, Lowerlab, and Nest are all great elementary public schools. Then there’s Stuyvesant and Bronx Science for public high schools. I’m not sure what parents do if their kids aren’t smart, but I’m sure there are scholarships for everyone.

If you live in an expensive city and make less than $100,000 a year, I’d love to hear how you manage to live a comfortable life! Please also mention your savings rate as well. I guess it all depends on what your definition of “comfortable” is and your age.


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Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

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  1. Sam says

    Thanks for your reply, Financial Samurai.
    Good post you linked to… I can relate to alot of it!
    In regards to getting laid, I’m already pretty advanced…
    I’m active on another blog/forum “” (awesome community) where I’ve also published some articles.

    How I found your post —

    I was researching how I could get a centrally located apartment in a big global city without using a large % of my income on rent – because franky I’d like to avoid it if possible… A google search brought me to your site.

    While I was living in Copenhagen I lived 20min outside the centre, and I got laid like 6 times in 2013, although I had a girlfriend the first 3 months…. Money was my #1 pririoty, #2 gym, and then #3 girls…

    I made some statistics on the basis on some friends that proves that acquiring a centrally located apartment in a good city will improve your results with +200-400% compared to if you werent centrally located at all. A very significant effect… so had I lived in centrally located apartment I would have gotten 12-24 attractive women instead of 6…

    But it just seems that it’s very hard to do for cheap, and it’s very very costly.
    Even in Brazil it seems…

    The only cheap solution I’ve come up with is to buy a 2-room apartment in the city centre, and then rent out the other room… That person’s rent would cover alot of your mortgage, and you’ll be living centrally in a top place for cheap while in your early 20’s.

    I’ve got a very good income right now, I just need continue to build more capital….
    Alternatively I could get a 2nd sales job from home, and try to make 200.000$/year, leaving me very little “spare time”…
    Although my fear is that I won’t be able to “concentrate” my forces, and perform average at both working +70hours a week, instead of being elite a one working 35 hours a week.

    Anyway, thanks for taking the time to answer me! It’s appreciated!

  2. Lauren says

    I agree with this post 100 percent. I live in The DC metro area which his considerably less pricey than New York, but not too far off. One thing this post didn’t take into concideration is the added expense of student loan payments for those that might have gone to grad school or still have undergrad to pay. Additionally, this post took into account the expense for a single person. Imagine being a family with an income of 100k. We have one child and easily our grocery bill a month is upwards of 700. That’s because we have to cook all of our meals at home! Daily lunches included. Without rehashing each item on the budget, I personally believe that living on anything less than 150 in a city like DC is nearly impossible if you want to live fiscally sound and not rack of debt. Sadly most employers are still benefiting off the tight economy and are continuing the trend of paying their people less than what is needed to really LIVE in the city the employer is located. The only option for a family like ours in DC is to live in the far suburbs where we have to commute upwards of two hours into work each day back and forth. That’s not living either! My solution is telecommuting where families can live in other states or less expensive towns while making the city salary.

  3. Skylar says

    As a resident of NYC, had to chime in with my $0.02 here. I am a brand new reader working in a less-than-lucrative industry who is still committed to saving money and eventually building wealth. I am 24 and pocket about $2200 a month. Yep, that’s it. I aim to put half of into savings. I am still quite content with my current standard of living, and have been able to make it work even in this ridiculous city. One major area where I save is rent: I live in Brooklyn and share a relatively cheap apartment with roommates, making a 35 minute commute to work by train. I don’t have any debt. With that said, I’m actually not that frugal. I don’t cook, so I buy all of my meals out (nothing fancy, but I still eat what I want, when I want it). I take 3-4 weeks worth of vacation a year. And, I love my shopping!

    I think I’m fortunate at this point, and my lifestyle works for me. But, it won’t be this way forever. I may need to change career paths for a better income. Eventually, I’ll have to think of supporting a family. Hopefully, I can continue a pattern of both saving and living comfortably.

    • says

      Hi Skylar,

      I love your attitude and your commitment to save. That type of mindset will treat you VERY WELL at your age down the road.

      What happens as we get older is that we get sick of living a certain lifestyle after a while. That’s when the difficulty really starts. My desire for a nicer life started around the age of 25-26 after four years of work.

      Welcome to my site!

  4. Jazzyjoe says

    Looking at the possibility of moving to NY, and stumbled upon this post. The information has been immensely helpful in weighing in the Pros & Cons, since I expect to earn around $110k. Most of the comments are on individual expenses, but does anyone have insight into living with a family? I’ll have a dependent wife and a 7 year old son. So schooling, Insurance, activity classes etc. come into play as well….would really appreciate if people ‘in the know’ can shed some light on how sufficient/insufficient this amount could be living with a small family such as mine..

    Great website! look forward to more of such content.

  5. RPJ says

    Thanks for the nice post! I have been working in nyc since 2006 but never lived in manhattan. I lived in jersey city which is a very easy commute from manhattan and rents are less and you get more space. For e.g. you live in Seacaucus, NJ you can rent an 800 sq ft one bedroom with parking for $1900/month ( and most of these buildings include gym ). Commute is very good. Jersey city downtown has path trains which run 24/7 and has a very short commute to wtc and midtown. Groceries are cheap here too and you save on NYC city tax which is roughly about 2.5% of your income.

    • says

      $1,900/month for a 1 bedroom and gym is pretty darn good! Is it just snobbery by the Manhattanites that give Jersey a not so great name?

      Sounds like a good solution living in JC to me.

  6. paolomi says

    you guys are all huge douche bags. this site is a douche bag. do you have any idea how many people who live in NYC who will never earn more than 60K a year? millions! And all you wall street douche bags are so freaking greedy all you can think about are 100$ a night parties and events. Perfectly intelligent and hardworking people like proffesors at NYU and columbia and thousands of scientists who work in the city don’t even see the six figure mark until way into thier 30s and still have very gratifying lives. If you need that much money to feel like you can enjoy your life, I feel pity for you becuase you will always be trapped in a place of unhappiness. And seriousy, for the minimal skills that it requires to actually be an associate on wallstreet, you should be greateful for the salary you get becuase your skills certainly don’t warrant the inflated salary you get. And as far as getting laid, I hope your fucking yourself when you are 45 becuase the 25 year old women you are used banging will have found more attractive and younger men than you. Shame on your disgusting, greedy, wallstreet lifestyle. Step out and take a look at the real world where perfectly itelligent and hardworking people have good lives with little money. I feel pity for you.

    • says

      Thanks for your kind comment.

      Are you saying I shouldn’t fill up my bathtub with Evian water anymore? Faucet water seems so dirty.

      If you truly feel pity for me and others here, I welcome any donations you have. Lots of greedy rich people are donating so much to charity on top of the taxes they pay. In the meantime, please share with us what you do for a living and how you’re enjoying life.

      We are the 99% my brother. We must fight the evil empire!

    • Frank says

      Thousands of scientists and professors have gratifying lives? You need psychological assistance, as the willingness to describe people so superficially doesn’t speak well to a healthy ability to see people as complex individuals. To wit, it’s impossible to whitewash “thousands” of low paid academics and researchers as having gratifying lives. I’m sure that some do, some are suicididal, and the majority are somehwere in the middle. However, I’m also sure that ALL of them would appreciate less financial stress that inevitably arises from making little money in NYC. Your elitist opinion minimizes the plight of the working poor (which people below 100k in NYC functionally are) in painting them as happy saints. In lieu of a realistic view of people, which I can’t give you, go and give a poor Columbia professor $5 as your penance.

    • says

      Well…….. I’m late to the comments section but I have to say this:

      I know researchers, scientists and professors. Asides from work, money is the #1 concern for many (grants and living expenses). Many of them have INCREDIBLY low pay (you’d be surprised, true even at a top university) and it’s a constant source of stress (especially if they’re married with kids). It’s why academics with marketable skills and who are still in their 20’s have fled to industry (it’s much harder for older people to transition). There are very few academic saints who are happy with their low salary. I know many who are constantly trying to maximize their income in other ways.

      I can understand your vitriol against “rich” people with 6-figure incomes but I don’t agree with it. For many, to get that low 6 figures means deferring years of pay for education. Then of course, getting jobs that require crazy long work hours. Then finally, having the luxury of having taxes eat a large chunk of your income. If you are really lucky, you get to earn six figures while living in a high cost-of-living area. There are some 6-figure earning people who are splurging left and right but hey, at least they’re helping the economy. Most of us are incredibly frugal and trying to make up for the years of little to no pay.

  7. Ramses says

    I saw a complain post there, soo so out of context . .. but Hey! I am from Panama, central america, and here my wife is every year asking to claim my US pasaport to find a job in NYC and go there for a while, and thats how I got to find this website, I kind of know how much money is burn and how not too much fun. But when my panamenians friend come to Panamá in vacations (like for 4 friends) is always the same story “is so cool, so much fun!, we have high salary!, fun fun fun) I and said to myself ( ye! ye! right!). I can imagine how fun can NYC be with the amounth requiere but less than 100,000 is really difficult and consider that with kids, Here in Panama my salary and the cost of the new Panama is pretty close to the same feeling how the money is burn. So until I find my way to earn 200,000 or more. NYC can wait :).

    Nice website congrats!

  8. WorkingOnIt says

    Great blog. I admire how forthright it is as well as your ability to deal with the naysayers. I do sometimes feel myself siding with them, but I also understand the value of money, and more importantly, of saving well. Life’s a balancing act I suppose.

    I’ve been in NY for about 2 years thus far. Pull in about 76k. Moved here from another major city only making 60ish, but I had a second job in the nightlife industry that paid cash (all my fellow bartenders, waiters etc know the value of cash amirite?!). I got a small bump when I moved here but decided to only work my day job for the first time in my life. I’m 33, so I don’t make alot for my age, something I blame on myself for having my heads in the clouds during my 20s.

    I contribute 6% to my 401k purely because that is how much my company will match. After taxes and everything I net about $3500 a month. I have some secondary income from an investment I made in a friend’s company years ago. Luckily while most people spent their $ in the 20s, I basically just stockpiled it all. I worked 2 jobs and never had time to go out anyway. Bought a decent condo which is finally building equity. I have about 130k in cash put away and another $140 in my 401k. So I’m doing ok, but not great by any means.

    My first year in NY, I wanted the Manhattan experience. So I lived in an awesome doorman building in Murray Hill, one that is literally known for housing a bunch of spoiled rich kids who live off their parents (featured in the WSJ haha). While it was nice, I very quickly realized that the $1725 rent (I had a roommate) effectively killed my ability to have any fun. Just too large a portion of my income (basically half).

    The second year I moved to brooklyn and found an AWESOME spot for an absolute steal. Still have a roommate, but my half of the rent is only $1150. Its MUCH smaller, older, no doorman, no modern appliances etc – but man am I happy. I live right off the water in Williamsburg (yes, hipster central), and it is beautiful, relatively safe, and full of amazing options food and bar wise.

    To your larger point, I do agree that comfort boils down to individual taste and choice. An interesting thing happened that first year in Manhattan. I was constantly surrounded by people making LOTS of money – I noticed however that ALOT of them didn’t seem happy. Money really does make life easier, but it also can complicate how we view “happiness.” 2 years ago if you had asked me if saving was important, I’d be insulted for asking such a stupid question. I used to save EVERY penny I made. But I wasn’t happy.

    The answer is somewhere in the middle I suppose (isn’t it always). Now I live in a great neighborhood, cheaper rent, food/groceries, alchohol, and entertainment in general. I still feel like i’m getting the NY experience, and I’m literally one train stop away from Manhattan. I save a bit but I’m getting to enjoy life. Not being SO worried about $ has been freeing. As long as we’re all doing the best we can, and working hard, I’d like to think things ultimately work out down the road.

    I will say that IF there is a trend among those who are comfortable/happy – it is your point about having a s/o. Everyone seems to have really figured out how to balance their budgets and lives once they found their life partner. Splitting rent, food etc is just half of it. There’s also a reduced desire to party all the time, financial support if you want to pursue a creative endeavor, etc. Being single was pretty awesome in my 20s and its become a bit of a drag in my 30s lol. Such is life!

    Love the blog, keep it up!

    • says

      I love your comment. Thanks for your perspective! All I really want is to hear from others on how they make it happen. We’re often caught up in our little bubble, and it’s always good to hear how others do it.

      Enjoy your 30s! It’ll go by faster than your 20s, trust me on this!

      Hope you subscribe to my site (email, or RSS) and keep in touch! I’ve published around 800 or so posts so far and I think you’ll enjoy going through them if you rummage through the Categories section on the bottom right.

  9. AROC says

    Thanks for your valuable insight here. It is actually helping me out a ton as I figure out my immediate future. One topic I haven’t seen discussed is moving to the city as a recent married couple. I am in my early 30’s, my wife in her late 20’s. Because of her commute to NJ, we will have to live near in midtown west, and neighborhoods such as Chelsea, and west village. My salary is about 120k, and hers, 105k. I keep seeing different calculators for how much individuals should be able to afford for rent. What would be your take on this? We are pretty active and social and would probably prefer to live a little cheaper in order to have more left over for other activities….

    PS, I’m one of these folks who associates with a ton of academics on a daily basis, and I totally disagree with the poster who went ballistic earlier. EACH ONE OF MY FRIENDS WHO IS A PROFESSOR OR THE LIKE WOULD LOVE THE ABILITY TO EARN MORE MONEY IN ORDER TO ENJOY THE CITY MORE FREELY.

  10. Nadia says

    I love this post. It’s all about what comfortable means to you, right? I am a 36 y/o single female. I make 40K and take home 26K after taxes & unlimited public transportation costs. I have full health care with a prescription plan through my job. I still have to dish out on co-pays on visits and prescriptions. I have a very tiny apartment in Brooklyn, I mean tiny. I pay 1,000 a month. Its a cute place in a nice neighborhood. I have to pay for electricity and gas that comes out to about 150 a month. I share cable and pay $60 a month for full premium channels plus high speed internet. I buy lunch every day, which averages to about $300 a month. I only eat one large meal a day like the Romans. I spend about $150 on vitamins a month. My gym membership is $76 a mo.

    I’m now left with $400 a month and being a girl can get expensive.

    Hair & Makeup – $50 (I always try to get samples from cosmetic stores when I can). I do tons of homemade facial and hair masks – Have to look good!
    Clothes – $15??? This one is difficult to calculate. I stock up on clothes once a year on Black Friday and tend to go with the basics. If you have a nice figure and your hair and makeup is perfect, then you can really get away with wearing form fitting black slacks and 5 different shirts a week. I own 5 pairs of shoes and I’m very happy. The key is to maintain the same weight (I know, so unrealistic -but not when you eat one meal a day) and good quality clothes will last years.
    Laundry – $35

    I’m left with about $290, that’s it. And what do I do with it? SAVE IT! I save my tax return money too. I don’t party, I don’t date, I don’t drink, I don’t go on vacations. Why, because I’m comfortable with not doing those things. Some people are just like that, just plain boring and I’m cool with that. I have about 13K to my name and I will hold on to that because it makes me feel safe and COMFORTABLE.

    I know some of you are thinking WTF I could never live like that, but I thought I’d share how I live for those of you who are willing to.

    • says

      You, Nadia, are awesome! I appreciate this side to the conversation. I make the same salary and am totally content with my lifestyle as well. City living can get me down because I grew up outside of Chicago, but my career demands it. Happiness has little to do with money.

  11. Chris says

    I’ve got to be honest, that lifestyle you’ve described on $100,000 sounds pretty damn luxurious from where I’m standing. And all in NYC, to boot? How can anyone complain when they can afford three meals a day and eating out thirty times in a single month, while also paying into their 401k and attending broadway shows? Right now my family’s struggling to get by on $5/person a day as far as meals go.

    • says


      Thanks for sharing your story. Can you share with us more about your income, Family size, occupation, and aspirations?

      Everything is relative in finance and I appreciate your input.


  12. infty says

    I am just coming out of grad school and have gotten a first job offer at a major financial firm in downtown manhattan for about 100K base salary, I am just curious, are you including bonuses as part of the money used for expenses in the above post, because my bonus is expected to be between 25-30% of my base pay. I believe the city really takes a big bite out of one’s bonus, so would living in JC help me with that aspect and can anyone point out how much of my bonus would I be roughly be saving in taxes living in JC. I have lived in grad school budgets for 5 years and I am sick of it, I would like my own 1 BR apt/studio with a queen size bed and a well equipped kitchen and a nice couch and a decent neighborhood, I don’t need to party regularly, once in two or three months is good enough for me. But after living on 18K per year for 5 years well into my late 20’s in NE US, It’s hard to keep a sense of balance with my new salary, I want to thank you for putting living in NYC in perspective, I am now going to try and climb down from the giddiness and try and max out my 401K, and try and have a place that feels like home after work.

  13. abby says

    Man I’m so glad I live in Colorado. $250 pays the rent in a beautiful 4 bedroom home I share with 3 other young people. I’ve even taken care of my boyfriend’s portion of the rent the past 3 months because 500 isn’t too bad. And all the grass I can smoke. I don’t own a car either (which sucks in the snow, hail, rain and heat and when I want to go places) but saves me thousands. I live in a community about 15 miles from Colorado springs. City life is claustrophobic and expensive, I was thinking of possibly moving to Denver for the thrills but this made me change my mind and probably saved me money so thank you. I just graduated from massage school, and 40,000 a year would be the beez kneez for me. I live off less than 10,000 a year currently.

  14. kate says

    I’m 36 years old, I work in a creative industry and make 90K + very good benefits. My husband is 44 years old and makes 72/year, also in a creative field. I received a big raise about 4 months ago, before the raise I was making 73/year. We live in NYC. We live on his salary and save mine. It doesn’t feel hard, if it did we wouldn’t do it. We both enjoy reading a lot and cooking. We also like to travel and plan to do it more in the near future. We make most of our own meals. When we do eat out it is either fairly cheap — Ethiopian, Thai, Indian or really expensive $250+ but thats usually only every other month or so. Saturday night is often Netflix, wine and a new recipe. We shop at Trader Joe’s and sometimes Whole foods. I rarely buy anything in a deli and I never buy anything prepared. We don’t buy meat or drink soda. We do buy organic food. I have a big sweet tooth so if I want ice cream or a cookie I’ll get it. We go to the library. We have a gym membership at Crunch, but we pay 2 years in advance and the monthly rate come out to be $46/person. All my gym clothes are from Nike or Lululemon. I don’t have a lot of stuff, but the stuff I do have is nice — mostly from Barneys or small boutiques (Tibi, Bird, Isabel Marant, Alexander Wang etc. I sometimes find really nice stuff at NYC consignment shops) I wear what I have and try hard not to buy more than I need. We don’t have cable, we have an antenna (everyone who comes over asks me what it is!). We own our own home in Brooklyn and we paid $345,000 for a one bedroom a year ago. We put 25% down.

    My extended family is upper middle class and my parents helped pay for my college education – when I graduated in 2000 I had $10,000 in loans ( but it would have been a lot more if not for my parents). My husband paid for 4 years of college on his credit card with no help from his family.

    I’ve been a saver my whole life. The older I get the less value I find in things. Spending consistently less than I make (for well over a decade) investing the rest in good Vanguard funds, not having kids, cooking my own food, not shopping for entertainment, these things have all had a huge impact on my finances.

    Once your money starts making money it gets exciting. The power of compounding interest is truly life changing. Our combined net worth is about $750,000 – much in retirement accounts.

    I’m not writing this for a pat on the back but to illustrate that smart choices especially when made at a young age can have a powerful impact on your finances.

  15. Brad says

    Great post. I would have liked to see you account for someone who has student loan debt but other than that a terrific post. Because I still have about $14k of student loan debt and I am only paying the minimum, and my employer only contributes half of what you contribute up to 10%, I’m only contributing that 10% to my 401(k). Would you still argue that I should be maxing out at $17,500? I have been taking savings and making my own investments in certain equities after doing research on them and my plan is to measure my performance against my 401(k)’s performance.

    That said, I make $95k per year and live in a very large, 4-bedroom house with roommates in JC so my rent is substantially lower than it would be in Manhattan (only $850). However, I go into the city quite often and probably spend way more than I should (roughly $150-200 per night). I plan to tone that back a bit. Also, I enjoy travelling quite a lot, domestically and internationally which also cuts into savings. The benefit is that I use miles and very rarely pay for anything other than hotels and entertainment/meals when I travel.

    It’s worked for me so far but I am thinking of moving into Manhattan while I’m still somewhat young (soon-to-be 28). Part of me feels as though I’m cheating myself by living in JC just to save for my future. Do you think it’s possible to continue living my lifestyle while living in Manhattan and save?


  16. Rob says

    I love laying out the monthly budget to put things in perspective, but I disagree with your statement that your friend is frugal. $3300 a month for an apartment on the upper east side sounds like a luxury building to me and $100 dinners aren’t frugal. Don’t get me wrong, I like enjoying a nice restaurant from time to time, but it’s not frugal.

    I don’t have all my real life numbers ready at the moment, but for now here’s my take on the first big chunk:

    Rent $2650 – a small one bedroom on W 16th street between 7th and 8th avenue (a more expensive and centrally located neighborhood than the upper east side, 2nd avenue area) in a non-luxury, pre-war, 3rd floor walkup on a tree lined street. Right there I’ve saved $650/month after tax compared with your example. That’s about $11K pre tax per year less than your friend, and my neighborhood is awesome with many subway lines less than 5 min walk (A,C,E,1,2,3,F,M,L)

    No doubt you can easily spend $4K plus on an apartment, but absolutely not necessary to have a great NYC experience. My building is zero frills, so I walk one block to do laundry, walk up 3 flights of stairs to my apartment. It’s a little less than 400 square feet (real size, not realtor ad size, ha). I’ve hosted parties with 30 people in my apartment and it didn’t feel overcrowded. I’ve had over 150 guests in 4 years sleeping on my pullout sofa in the living room. I have a projector and 7 foot screen setup in my living room and host movie nights with friends. The kitchen is just an L shape setup that’s part of the living room, but I have a kitchen island separating the living area from cooking area and it’s great for entertaining guests and dinner parties. Bedroom could squeeze a queen, but I’m happy with a full, and have room for a desk and dresser plus a small closet, space to hang my bike, and some shelves. In other words, I’m not living like a college student dorm, and having plenty of fun.

    I also have a friend living on the Upper West Side (slightly more desirable area than Upper East because of more subway options, though not as expensive as my hood) in a nicer building with newer renovations, an elevator and laundry, and he has a king size one bedroom apt, I think paying $2500. It’s not a luxury building but definitely not a college dorm.

    Compare this with a guy I met through a Zog sports league who was paying I think $3800/month to live in a luxury building on W 26th st & 10th ave (in my opinion not a fun neighborhood, yes 10 blocks makes a difference). His bathroom was probably the size of my bedroom, he had high end renovations, a doorman, etc…basically a bunch of stuff that to me adds no value to life.

    Or as others pointed out, move to New Jersey. It’s always a space/luxury/location game when it comes to property. If you want all 3 you will pay. I give up luxury and a little bit of space, but have an awesome location. Jersey City you get more space/lower cost but location less good (though not bad). I’m 37 and don’t want roommates anymore, but in my 20’s I thought having roommates was better because it was a lot more fun.

    Further frame, I make 140K, max out 401K, save 24K on top of that via direct deposit into a separate account, take 5 weeks vacation per year (last year 3 weeks in Peru for $2K all in, including flight, this year 3 weeks in Japan for $4K). I buy organic groceries, eat out only places I want to eat because the food is interesting/different, and avoid paying for crappy takeout meals just to fill up. I take taxis maybe 5 times per YEAR, and prefer to ride my bike to work (in Midtown) often or take the subway in the morning and walk home at night (being in a good location saves on travel time/costs). Going out I often walk because I’m 5 minutes from the West village, 20-30 from the east village, or use the subway or my bike to hang in Brooklyn or other random events that are farther away. I don’t have cable, and get a free phone from my job. I have a car that I park on the street (yes, a pain, but need it for work and is nice for road trips).

    So, 200K is definitely not needed. I live pretty large and have plenty of savings to show for it. Just wanted to give yet another perspective!

  17. Jeff says

    I think a more interesting experiment for you to try would be working two minimum wage jobs with no benefits and finding an apartment and entertaining yourself for a month on that salary. Then you could compare that life with the 100,000 a year life and see which is better.

    • says

      That definitely will be hard. And then even worse is getting three minimum wage jobs in India and see how far you can last.

      The key word in this article’s title is “comfortable.” Anybody can survive. But can anybody survive comfortably?

  18. Shaun says

    Great info here!!!! I am considering taking a job in NYC and I would be a fortunate soul to make well over $175k with no children. I grew up very poor so I don’t feel bad to have some opportunity to live in NY. I was born and raised in Detroit proper and have lived in some very bad neighborhoods. So my question is what areas are the ones to stay completely away from? I like diversity and was living in Rogers Park Chicago so a little grit is cool as long as I can catch taxi or train to nightlife and shopping. Oh and I would like to have my car…thanks!

  19. chris says

    My plan is to buy rather than rent, but not just one 3-4 bedroom apartment. I plan to leverage my holdings in Florida to buy two apartments at once. One 3 or more bedroom apartment (preferably in midtown), and one 2 bedroom apartment in lower cost area, (not low…lower). The way I see it with current rental rates I can competitively price and rent out the larger apartment while living in the smaller. The rent on the larger apartment will cannibalize its mortgage, and likely provide a small to respectable subsidy payment for the smaller apartment. As property values rise and the mortgage principles on both apartments decrease at the right time I will sell the smaller use the profits to pay off the larger, and finally move in to Midtown wear I’ve always dreamed of living.
    I know there’s a large amount of risk and potential liability on the table, and the plan isn’t rock solid yet, but then again I didn’t become successful betting on sure things. Ce la Vie.

  20. Thebe says

    Hi, this is a great post. I live in San Francisco with my husband and 10-year-old son. My husband makes $95,000 and I make about $30,000 with my part-time job. We both work in the financial district. We live in a very small, rent-controlled two-bedroom for $2,250 a month, but it’s in a great, central neighborhood, and walking distance to our son’s school. (We lucked out in the public school lottery and nabbed a good elementary school.) We drive a Honda Fit that we paid half in cash. We contribute $9,000 a year to our 401(k) and $400 a month for insurance.

    It’s frustrating sometimes because everyone we know in the city has a house or a bigger apartment. That’s because most middle-class folks live outside the city, so people here either have tons of money or almost none. Plus we have an upstairs neighbor who’s retired and likes to run laps while yelling into the phone all day.

    Our worry is later this year, when our son goes to an actually good middle school that’s way out by the ocean. Two-bedroom apartments on the edge of the city are going for $3,200 to $4,500 a month, and even then competition is fierce. San Francisco is an amazing place, and we don’t want to leave our friends, but I see the day when we’ll have to leave this apartment, and then we’ll have to leave the city for good.

    I”m not complaining, really. I used to work full time, but the family was stressed and miserable. It’s a shame, though, that a small family making $125,000 a year can’t do a little better. Rents have gone up 25 percent since we arrived here and show no sign of stabilizing. We try to be thrifty, and I cook most of our meals, and we have no debt. Sometimes we consider moving out of the city, but the commute would be awful and rents are rising throughout the region. Sometimes I almost wish for another tech bust just to cool things off a little.

    Keep up the good work. It’s so easy to be judgmental about other people’s choices, but honest discussions like these help us think about what we want out of life and what we’re willing to pay for.

    • says

      Hi Thebe,

      Thanks for sharing your thoughts! How did you first find this post?

      Downtown SF seems like Manhattan now, a madhouse. There’s too much construction too, jamming up the roads. Great to hear part time work is less stressful. I love PT work as well, but am thinking of going FT.

      I’m afraid things are just going to get more expensive in SF with Uber, Airbnb, DropBox, thumbtack, and all those other companies going public. Do you feel you will never be able to buy a 2/2 condo somewhere in SF? They are not too bad near the ocean.

  21. Mike says

    Freakishly accurate numbers Sam!

    Being in the SF Bay Area, I wasn’t able to max my 401k until I started to creep over about 90K gross. From what I see, folks making near or below the median income in these expensive cities survive with one or more of the following: Section8 or other housing subsidy, rent control, gov’t vouchers, living with family that either owns the home or is receiving some subsidy, living in a van down by the river, cash earning side hustle(s), cut expenses to the bone.

  22. Andrew says

    Hi Sam,

    I just discovered your website about a week ago and I’ve been hungrily devouring all of the great content you’ve posted.

    I recently moved to Manhattan in September and have been loving it. I am, however, 29 and feel like I have little to show for the work I’ve done so far!

    Anyway, my comment is about your math here. I’m not sure if someone pointed this out yet, but it’s typical for landlord’s in NYC to require proof that prospective tenants make 40X the monthly rent in annual salary. You can, at times, get a guarantor to co-sign your lease for you, but they typically have to make 80X the monthly rent, especially if they’re out of state. Putting that together from your two cases above:

    -$100,000 salary, Rent For One Bedroom On 71st and 2nd Avenue: $3,300.
    So we’d have $3,300*40= $132,000 annual salary required to rent.

    -$200,000 salary, Rent For Two Bedroom In Mid Town: $5,500.
    So we’d have $5,500*40= $220,000 annual salary required to rent.

    Now, unless they have guarantors that are making $264,000+ or $440,000+, respectively, I’m not sure how they’re getting these leases to begin with. In reality these people would be living in worse areas. Right? Am I missing something?

  23. Renumer says

    This is a little ridiculous. First of all to rent a $3300 apartment in manhattan you need to make 40X the rent ($132,000) there are more affordable apartments. You can get a 1 BR easily for $2200. There ya go, just saved you $1100 a month. Many professionals live in brooklyn and Queens where you can get a nice 1br apartment in a decent area for even less, around $1800/month. Also you learn to be smart and where to get cheaper groceries and the good inexpensive food spots. You don’t have to spend $24 every time you get a meal.

    I live very comfortably in NYC on around 70k/year and I have a brand new luxury car.

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