November 30, 2020

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How Do People Live A Cozy Life Earning Less Than Six Figures In Expensive Cities?

New York would be the greatest city in North America if it weren’t for three things: 1) Tough weather for half the year, two ) Never ending crowds( and 3) outrageous prices! I am currently spending the first week end of my weekly 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 this year (began in July) was $40,000. Even then I thought $40,000 was pretty low as I could only afford to talk about a $1,800/month studio with a friend of mine from high school following contributing to my 401(k). Thankfully our salaries were increased in the next year to $65,000 after Wall St. chose to cover brand new year analysts $55,000 instead of $40,000. However, a base salary of $65,000 was not much to write home about when one bedroom condos were selling for 5X.

Fast forward 14 decades after and the 600 square foot one bedroom condos in decent areas of Manhattan are currently trading for $750,000+! I am pretty comfortable with these prices because my studio roommate really purchased a $325,000 one bedroom condo close to the United Nations in 2000. He has been looking to upgrade to a two bedroom condo with his future spouse, but he’s taken aback by the ~$1.5 million price tag. They simply might move from town instead. If a condo owner who watched his property’s value increase by 130% can not even afford to comfortably upgrade to a two bedroom, how can you imagine what a renter during the same period of time is believing?

To start with, earning $100,000 a year puts you in roughly the top 10-15% of nationwide income earners. $100,000 is an excellent accomplishment no matter where you live, but it is not that good if you are living in an global city such as New York, San Francisco, Hong Kong, London, Tokyo, or Paris. It’s vital for those who make less to realize high salaries are usually earned in costly locations.

Let’s break down what a typical $100,000 earner will get after funding their retirement savings and taxes. There’s not any 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) article by era for your reference.

401(k) Max Contribution: $17,500

Taxable Revenue: $82,500

Effective Tax Rate (includes city, state, national, SS taxation, health insurance): 30%

Net Revenue: $57,750

Monthly Net Income: $4,812

Savills UK, a property broker ranks NYC the 1 most expensive city in the world as of 2H2016


Food: $700. He eats out about 30 meals every month and hamburgers his staying 60 meals at house (breakfast, lunch, dinner). Groceries aren’t economical in Manhattan.

Beverages: $100. He only goes out for drinks with his friends once weekly.

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

It is $5 to sail round-trip. Back in 1998 one-way sidewalks were just $1. $112 is currently the monthly all you are able to sail pass cost.

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

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

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

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


As you can see from my example above, a person making $100,000 annually in new york is NOT living it up. Going out once a week with friends is hardly excessive in a town that seriously never sleeps. He does his best to walk or use the subway along with his entertainment budgets is pretty tiny for each of the NYC has to offer.

At least he is maxing out his 401(k) into the sum of $17,500 a year which is crucial since he has nothing left from disposable income. Maxing out his 401(k) should lead to over $200,000 in 10 years because of business suit and conservative performance estimates. If he was not maxing out his 401(k), he’d have an additional $1,200 per month to spend.

Finding a decent one bedroom for under $3,000 isn’t particularly easy unless you know a person who has a rent controlled apartment. If you would like to direct a less comfortable lifestyle, then it’s possible to find studios for about $2,000 per month. But, are you going to be happy still living like a college student earning $100,000 a year? Probably not since you are closer to 30 than 20. Where are your parents, girlfriend, boyfriend, and relatives visiting sleep? 1 solution is to find a significant other who is prepared to split your $3,300 per month one bedroom price.

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

There’s a saying with New Yorkers to expect to burn off $100 every evening you venture out. After going out each day I can see how this expression is true. My dinner in Strip House cost $77 followed by $35 of beverages at Sparks Steakhouse where a family friend functions. Then of course I had to pay another $15 taxi ride back home since it was 1am. At least my friend and I split the bill.

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

Even though some of my buddies in expensive cities who’ve been working for more than 10 years will probably scoff at $200,000 a year in income, I continue to feel that $200,000 annually per person is the ideal income for maximum pleasure. To put matters 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 physicians 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, national, SS tax): 35 percent

Net Revenue: $118,625

Monthly Net Revenue: $9,885

Rent For 2 Bedroom In Mid Town: $5,500

We can afford to eat four $100 dinners a month with $500 left over for breakfast and lunch.

You’re able to head out twice a week now or feel more comfortable buying a few rounds of drinks for three friends four times a month.

Cabs: $200. Rather than taking the subway when it’s super hot or very late, then you get to have a $15 cab ride a bit more frequently for advantage.

Same old monthly commuter program.

Cable / Web: $100. Same old bundle.

A little more breathing space here since you can now manage to take a date!

Mobile telephone: $100. Upgrade to a bigger data bundle because you’re on the move more frequently.

Traveling: $300. A few more trips from town.


We can assert the perfect earnings to live in an expensive city all day . However, as you can see from the illustration above, $200,000 will allow you to max out your 401(k), save $20,000 (10%) in after tax earnings and invest freely on a lot of what NYC has to offer you. Anything more than $200,000 is fine, but higher taxation prices are really going to eat into your own earnings. It also usually takes more effort to earn from the $250,000+ array so that’s a drawback. (See: How Much Do I Need to Have In My 401k By Age)

Here is another example of a single mum with a kid. It is clear she’s not living it up on a $200,000 income.

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

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

Two bedrooms are $7,000-$8,500 a month

Roof deck in 200 Water St. downtown FiDi. 2 bedrooms are $5,000 per month.

Given only 13% of Americans earn more than $100,000 a year, it is clearly possible to have a fantastic life living in an expensive city making less. This goes for people living in other costly international cities too. Some of the things I’ve thought of that enable people to reside and save :

* Co-habitating using a girlfriend, boyfriend, partner, or roommate.

* Working at least two 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 that you don’t have to cover your meals.

* Working as a property manager or hospitality industry to save on lease expenses.

* Living for free on your parent’s apartment.

* Living off a trust fund.

If you can look after your home situation everything else could be overcome with more economical options. For example, you could eat McDonald’s for supper rather than visit Le Bernardin. Entertainment-wise, you can play frisbee at the park instead of paying $100 for a Broadway show.

I do wonder how parents manage to send their kids to private schools given public school systems in big towns are often in need of improvement. There is the Citywide Gifted & Talented programs and Anderson, Hunter, Lowerlab, and Nest are great elementary public schools. Then there’s Stuyvesant and Bronx Science for public high schools. I’m unsure what parents do if their children aren’t smart, but I am convinced you will find scholarships for everybody.

If you reside in a costly city and make less than $100,000 annually, I would love to hear how you figure out how to live a comfortable lifestyle! Please also mention your savings rate as well. I guess it all depends on what your definition of”comfy” is and your own age.

Connected: Scraping By About $500,000 A Year: Why It’s So Hard For High Income Earners To escape The Rat Race

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Updated for 2018 and beyond. The bull market is long in the tooth. It is now more important than ever to keep track of your finances.

Writer Bio: Sam began Financial Samurai from 2009 to help people achieve financial freedom sooner, instead of later. Financial Samurai is now among the largest independently run personal finance sites with 1 million visitors per month.

Sam spent 13 years working at two big finance businesses.

He retired in 2012 with the support of his retirement income that currently produces roughly $250,000 passively. He loves being a stay-at-home dad to his two young children.

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Michael states

June 20, 2020 at 12:13 am

That is intense. When I graduated from college in 1998, I lived in Manhattan and was only making $47K/year. I then lived in Boston, DC, and now Los Angeles. These cities are nearly as expensive as NY. I can tell you that in at least one of these towns — even NY — it would be VERY simple for a single individual to live on less than $200K. I’d say that the $120K are the cheapest and still livable and would allow to save for retirement. You are still able to go to fine restaurants and have a good apartment or a condo outside the town for this salary. I am always astounded by people’s warped perceptions of $. If You Don’t Want a personal masseur and gold plated toiled seats, these amounts you introduced are far out of whack

Matk says

July 15, 2020 at 3:44 pm

I transferred into the UES January 2019 with a job offer of $122k/yr. Got a 1 bedroom for $2700/mo. Monthly MTA caard with unlimited rides for $127/mo which was taken out pretax at work, $60 for mobile phone, $60 internet, and about $60 for electrical. Everything else included in lease. I moved out every now and then. Perhaps 3-4x per week and if you are ona date it is certain to be over $100 a night. Rarely take cabs but on rare occasions I do. Largest killer? I smoke and it is $14-16/package . Anyhow, I maxed out my 401k readily and even saved around $1,000 a month. Museums, broadway, etc I’d do very occasionally. Baseball games, lots, but wouldn’t buy anything but cheaper chairs. Perhaps not the cheapest but about $30 a chair.

As you can see I’d good but there’s a lot more to it. It had been pretty rare I went into an actual restaurant b/c it is so expensive. When I say I consume most of my foods I mean deli’s, grab a slicer or even a bagel or causal fast food areas. Typically, under $10 for breakfast and $10-15 for dinner and lunch. Usually I only eat two a day but maybe not consistently. Grocery stores? There is actually no such thing in the city. You will find a few Whole Foods and Trader Joe’s but not close enough to me and not really any more economical than”eating out” like I do. Plus, schlepping markets on a bus or subway? Local grocery shop? I suppose that is what New Yorkers call them. Like D’Ag, Gristedes, etc but they’re very, very small and you likely won’t find whatever you need without needing to go a different shop. Again, not worth the hassle and not really any cheaper.

I would agree with $200k as a nice lifestyle. My apartment has an outdoor area but it feels like a small jail cell. There’s no natural light. It is noisy since the building is old and to get out of town takes forever. True, the subway system is excellent but simply to get to Brooklyn requires me over 45 minutes. To get to the UWS takes nearly a half hour and that is 2 miles away. FiDi on a half hour. Everything here is a giant pain in the ass. $200 k would allow a car which would make a big difference. It would also let you take some time away from the city if it’s just upstate or seeing family back home. You do not just run someplace real fast here. Unless it’s on your neighborhood it is likely to be an afternoon affair.

It is definitely true there are things you can do in order to make it more economical. There’s a lot of inexpensive and enjoyable entertainment. Some of it’s even free. However, it comes at a cost. Central Park is great and free but it’s not a getaway. There’ll never be a time when you’re alone with character unless you’re there at night that is not a good idea.

$200k gets you a legitimate flat where you are not living like a person on welfare, a vehicle (even with $600/mo parking spot parked likely miles off ), the capacity to save and invest a difference-making amount of money and hardly any worry about having the ability to have fun unless you’re an idiot.

Casandra says

Together with the coronavirus, I’m working from home out of Manhattan and no have no need or need to go to Manhattan. I was in lower Manhattan last month and it was all boarded up and full of homeless people. Everything is shut and people have moved out. No restaurants, museums, movies, clubs; nothing to offer. Many people are laid off from their jobs in Manhattan. Better off going home to live with family or a friend and bank the excess cash.

Matk States

July 16, 2020 at 10:29 am

I have tried but can’t get out of my rent but leasing company won’t work together with me and will not allo subletting. On top of that I have been out of work since April. Fortunately, I had been good with money through the last few years and’m fine for awhile. But there is literally nothing to do here today. They have outdoor dining now but that is it and I am certainly not paying that much for lunch or dinner.

I’d actually discourage anyone from going here if you did not have a well paying job lined offered and approved. Violent crime is up, somewhere the homeless situation has gotten worse since it was already a gloomy situation before all this occurred. True the restrictions will not survive forever and rents are coming down but the quality of life is indeed low if you don’t make near $200k that it’s not worthwhile. Not even close.

When I find a job before my lease is up I will stay but it’s very unlikely I will find one paying even close to what I had been paid before. And to tell the truth, I’m not sure I’d ever come back here even to see.

Meeka says

August 10, 2020 at 2:44 pm

My stats are very similar to yours but residing on the Waterfront in Jersey City (i.e.,”that the 6th Borough”).

401k contributions: $1,500/mo ($18k annual)
Monthly Net income after 401k donations: ~$5,600
Rent: $2,700
Grocery: $600/mo
Utilities: $150/mo
Web: $55/mo
Telephone: $65/mo
What I have found is paying this much in lease affords me a high quality of life, given my interests and proclivities.

My apartment is a newly renovated, modern 1-bedroom with fundamental A/C, in-unit washer-dryer, dishwasher, along with in-building amenities like fitness center and terrace. Now in my life, I won’t settle for anything less. I am not walking into a laundromat or residing without a dishwasher or without an in-building fitness center (although COVID has closed them). Gone are the days of having a roommate or living in”quirky” or”magical” old buildings, or using cockroaches. The premium is worth it for a peace of mind.

My unit is in a secure, quiet place in walking distance of grocery shops, NJ light railroad, a CVS, a couple of fitness centers, along with a running course on the waterfront.

However, these amenities comes in an extreme cost. Recently I took inventory of my expenditures and realized I stored very little to other major life goals like saving for a car, a home down payment, and a work sabbatical. Every month I feel pinched for money, in spite of meticulous budgeting and price cutting. I am also debt free. Then I understood, I pay 50 percent of my net income on lease! Before moving to NYC, I easily maintained rent below the 30 percent threshold, but now I spend 50 percent to maintain the same quality of existence.

Also, my supermarket prices skyrocketed. In my Midwestern City, I invested $250-300/mo on grocery stores; today it is $500 — 600.

Since COVID, I’ve been struggling to justify this cost. Why pay this much money to live near a city I do not even see? Why reside in Jersey either? Jersey is ridiculously expensive without offering much in return. (Jersey Cons: The Jersey bus system is antiquated, the State has several notable attractions out of the Jersey Shore, the residential homes are ugly shacks if you don’t move farther out to Montclair or Princeton… NYC: The MTA feels like the last place I’d want to be right now.)

In addition, I feel like it is a struggle to access any curative green area or character here such as subtropical biking trails, swimming, water sports, scenic hiking, gardens, etc.. Some outside recreation; that’s all I am longing for after being cooped in my apartment 24/7. Central Park and Liberty State Park are beautiful but it’s not quite the same feel, particularly given all the crowding.

What I want now is a car so that I can quickly escape this concrete jungle, but realistically I can not afford it. My building charges $225/mo for parking spaces, there is no on-street parking, and automobile ownership averages $400/mo.

What I believe is that NYC is”Worth it” if you (1) have family here, (2) are trying to break into a hot sector like finance, the performing arts, or good art, (3) *actually * love fine dining, live entertainment, and art, or (4) long to live among and associate with a particular sub-culture/sub-community (e.g., LGBTQ+ community, Jewish neighborhood, etc.) you could not readily find elsewhere. For me personally, I really don’t really fall into any of these buckets so I am just questioning why reside

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