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.


Track Your Finances Online: If you currently live in an expensive city or plan to move to an expensive city, I recommend signing up with Personal Capital, a free online wealth management tool to keep track of your income and expenses. I live in San Francisco and Personal Capital keeps my budget in check by providing me clear snapshots of my finances. They even send me a weekly overview of my net worth progress over email which I highly appreciate.

My favorite feature is Personal Capital’s Investment Analyzer tools that assess your portfolio’s risk and fees. I discovered I was paying $1,700+ in annual 401(k) fees I had no idea I was paying! Give it a go. It’s free and only takes a minute to sign up.




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.

You can sign up to receive his articles via email or by RSS. Sam also sends out a private quarterly newsletter with information on where he's investing his money and more sensitive information.

Subscribe To Private Newsletter


  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!

Leave a Reply

Your email address will not be published. Required fields are marked *