Author Topic: Case Study: Can I afford $1700/mo for a studio in Manhattan?  (Read 9528 times)

sbdebeste

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Case Study: Can I afford $1700/mo for a studio in Manhattan?
« on: January 27, 2015, 07:25:46 PM »
Background: I have a lot of trouble with my long-term financial goal-setting, and I'm still struggling figuring out the social life thing. Might be moving out of my $1100 rent situation (shared) soon because they're going to jack it up high (by $1000!!!), presumably.

My question is - if I want to have some semblance of FI in the next 5-10 years, is it feasible to do this while renting a place alone? (This would be my first option as I wouldn't want to move into someone's apartment and then cook and make their whole place smell, plus have to sell all my furniture).

Currently I've shaved down my spending a LOT...

Age 25

Takehome pay
Monthly paycheck: 4500*

* measured after contributing 675 to 401(K) per month and maxing out my FSA for vision correction. Note that I *anticipate* year-end bonus being around 1/4 of my total comp; last year it was 15K after taxes and 401(K) deduction.

Barebones monthly expenses - 1750
Rent: 1100
Utilities (all-in): 200
Transport: 120
Groceries: 300
Grooming/Laundry: 30

Likely (partially) optional monthly expenses - 500
Restaurants/Bars: 300
Minor home maintenance/improvement: 50
Misc: 50
(Reserved for  clothes, ): 100

Planned one-time, non-recurring expenses - 20K
10K on a vacation for family (could come under budget)
10K for my sister's tuition

Assets - 100K

Cash: 54500
Lending Club: 2500
Vanguard Stock ETFs: 16000
Vanguard Bond ETFs: 4000
401(K): 11000
401(K) at old company (target date 2050): 24000

Advice on everything appreciated! Goal-setting, credit card for travel, allocation/fund recommendations, real-estate investments (keeping in mind that I live in NYC).

Most pressingly, that rent figure is likely to increase soon (and I'm going to incur a lot of one-time expenses moving my furniture and signing a new lease, etc). Is it ridiculous to up my monthly expenditures to over ?

The only long-term goals I have are:
- having kids (and meeting the right person to have them with)
- making/keeping friends
- retiring early (no hard date set on this)
- owning my home

NYC is entirely optional in the long-run but in the short-term the job pays well, I don't need a car (!), and I think that going somewhere smaller is only going to make me even more of a recluse than I already am. So I would prefer not to entertain suggestions for leaving in the short-term. Though this does slightly confuse my long-term FI number calcs for now.

Thank you in advance!

theonethatgotaway

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #1 on: January 27, 2015, 07:34:22 PM »
Do you need that?

Im 27 and my hubby is 30 and we have two kids and we live here. We pay more in rent. We pay a lot for the kids stuff. So forth. I mean, when we first came here we started in a 5 month studio for that much, but we had a kid and needed space and moved up.

We have a lot of single friends that pay between 300-600 for a room in shared apartments (3-4 bed walkups). (Hells Kitchen) Granted, they aren't nice, but they don't need to be as their concern IS saving most income.

So no, you don't need to spend 1700 on your own place. If you want to, that's a different prerogative, which will put you further out of purchasing or starting a family.


theonethatgotaway

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #2 on: January 27, 2015, 07:43:49 PM »
If you are seriously considering spending 1700ish, look at getting one roommate and renting a nice 2 bed/2 bath for 3800-4100 and splitting it.

You will get a MUCH nicer place for the same cost vs. the quality of a 1700 studio.

sbdebeste

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #3 on: January 27, 2015, 09:07:02 PM »
Thanks for the thoughts. The thought of a $300 room sounds ridiculous! But I went onto Craigslist and I do see a lot more cheapish options for shares than I had expected.

The biggest reason I want to live alone is so I have control over the apartment. I lived in a shoebox of a room when I started out for $1K in a 2BR, and I loved my room, but I didn't feel like the apartment was mine at all. Felt weird being in the living room, felt weird having guests over, felt weird cooking.

Renting a 2BR+ is probably preferable but I may not have anyone who wants to lease up with me. Otherwise that would be great!

theonethatgotaway

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #4 on: January 28, 2015, 10:33:38 AM »
There are a plethora of options! Write a list of what you think you want, then what you need. Having a home you feel comfortable in will decrease your bottom line (less eating out/needing to be doing spendy activities because roommate is home).

There are a wide range of two bedroom options with larger living spaces, even buildings with amenity rooms (living lounges and such) that can help alleviate the roommate issue. You can get a nice place, with space.

If you rent a cheap studio be prepared for the other roommates (roaches/ mice). That is a headache unto itself. I felt like a prisoner in my place due to this.

Check out many options, visit buildings, go around with an agent. You'll get an idea of what you are needing and wanting and probably a few more surprises at possibilities (such as CL).

My friend with the $300 place works at google and spends the difference on being out a lot because it literally only fits his twin bed with storage. He's amazing at saving though and has a great ratio.

Hoboken has a huge crowd of young twenties professionals. Rent is dirt cheap for nice places with space (compared to manhattan). Just an idea.




LadyStache

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #5 on: January 28, 2015, 10:52:52 AM »
Think about places outside of Manhattan. If you move a little further out to the suburbs, you can get a bigger place for less rent. And, depending on where you go, you might not have to pay NYC income taxes.

KittyFooFoo

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #6 on: January 28, 2015, 11:06:06 AM »
Assuming I didn't fuck up a calculation here....



                           save rate   y2fi        annual spend    annual save
SR basic only              0.661835749 8.04859182  21000           41100
SR basic+option            0.565217391 11.29113294 27000           35100
SR basic+optional+600rent  0.449275362 15.70724951 34200           27900



I did factor in your $100k, I did *not* factor in your bonus since it is sort of an unknown, so the picture is a little rosier in every case.

You can afford the apartment by anyone's standards.  It's up to you to decide if the pros of the new apartment outweigh a few extra years of work.

Could you move within walking distance to work for this price?

Ricky

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #7 on: January 28, 2015, 11:07:56 AM »
Adding $600 in expenses would still put you on track to save $2,300 a month (~$3,500 with bonus) or much more if you keep the food bill down. You'd probably save a hair on utilities as well.

You can definitely afford it. And I'd personally do it if it were me. I would love alone in a heartbeat if I were in a good area.  But I'd weigh in things such as job satisfaction, and dig deep and think how long you really want to be in NYC or working in general. You have a good start in savings already.

« Last Edit: January 28, 2015, 11:11:59 AM by Ricky »

galliver

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #8 on: January 28, 2015, 12:13:38 PM »
If you moved into a shared place, that might be responsible for your feeling of non-ownership of the space (in the psychological sense). Might be better to try and find a roommate first and move into a place together.  I didn't quite feel like I "owned" the living room in my shared apartment, more like I was borrowing it. But I did add a lot of stuff to the kitchen and that made it feel "mine". Also, I feel like a lot of people who have bad roommate experiences don't vet their roommates, or do so well. My roomies interviewed me when I moved in, and when I moved out we interviewed several people before settling on one that seemed like a good match. You have to talk about everything--how to handle chores/cleaning/household supplies, the procedure for having people over, cooking, sharing tools/dishes and food, how to handle disputes. You'll be living with this person, you need to know what you're getting into! People have vastly different expectations of roommate situations and if you have incompatible ones you shouldn't enter that situation.

cashstasherat23

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #9 on: January 28, 2015, 12:30:55 PM »
Just want to throw my opinion into the ring here and add another vote for the suburbs. I live on the Jersey side of the river, and just moved in to a very spacious, just renovated 1BR with a backyard for $850/month, utilities included. I work in Midtown, takes me about 30 minutes to commute on the bus, and I still go out with friends and am able to experience city life, without paying city prices for rent. For $1,700 (heck, for half of that!) you can get an incredibly spacious place even closer than I am, in Weehawken or Hoboken, and it will give you about a 15 minute commute right into Port Authority. Take a look outside the city-it's not so bad on the Jersey side! :)

Yankuba

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #10 on: January 28, 2015, 12:59:29 PM »
Just want to throw my opinion into the ring here and add another vote for the suburbs. I live on the Jersey side of the river, and just moved in to a very spacious, just renovated 1BR with a backyard for $850/month, utilities included. I work in Midtown, takes me about 30 minutes to commute on the bus, and I still go out with friends and am able to experience city life, without paying city prices for rent. For $1,700 (heck, for half of that!) you can get an incredibly spacious place even closer than I am, in Weehawken or Hoboken, and it will give you about a 15 minute commute right into Port Authority. Take a look outside the city-it's not so bad on the Jersey side! :)

Ding ding ding! We have a winner - I vote for NJ as well.

MrsPete

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #11 on: January 28, 2015, 03:42:29 PM »
So you're asking if you should commit 38% of your take-home pay for rent, money that's spent - gone -nothing to show for it once the calendar turns over again.  Assuming you work 5 days a week x 4 weeks, you're saying you'd work roughly 8 days a month just for rent. 

No.  That's crazy on the face of it. 

theonethatgotaway

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #12 on: January 28, 2015, 04:30:19 PM »
Meh, that's not crazy in Manhattan. Not even close. I know people that spend 60%.

He has enormous upward mobility here at his age/career. It shouldn't be a problem 5 years down the line. Especially with his remaining expenses quite low.

ioseftavi

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #13 on: January 28, 2015, 04:38:49 PM »
Another NYC'er here, and I'll sound off.

Can you afford it?  Yup.

Should you do it?  I'd say nope.  Being in your mid-20's with no commitments is probably the easiest time in your life to live below your means with housing costs.  If you live like a recent grad for even slightly longer than average - say, you have normal, enjoyably roommates till you're 28 or 29, but you don't live in a dump - you will have a crazy ass huge boost on your stash.  You'll also help condition yourself early in life that you don't NEED a nice apartment / house to have a great life.

MrsPete

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #14 on: January 29, 2015, 06:39:08 AM »
Meh, that's not crazy in Manhattan. Not even close. I know people that spend 60%.

He has enormous upward mobility here at his age/career. It shouldn't be a problem 5 years down the line. Especially with his remaining expenses quite low.
Disagree.  If living in a certain area requires 60% of your income, you can't afford to live in that area. 

Today is today, and five years down the line will be five years down the line.  Live where you can afford today, and move when your circumstances improve.  In terms of long-term financial stability, upward mobility is useless if you spend every penny. 

We have a name for people who take on too much mortgage for their income:  House poor. This is the same thing, only it's worse because you don't own the apartment. 

James

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #15 on: January 29, 2015, 07:31:23 AM »
Remember that the savings you put aside at this point are huge. Building up your stache early means it starts to build on its own that much sooner. Creating a large pot of money that starts to compound and grow means you can have so many options later in life. You can keep adding to it and retire really early, you can use part for down payment on a house or even pay cash without depleting your savings, you can work part time or even not at all when you eventually have those kids, etc, etc. It isn't about having more than everyone around you or more than normal, that isn't the point. The point is to accumulate great wealth at an early age so that later you can live life how you wish. You don't know exactly that that means at this point, and that's fine. But just because you don't know doesn't mean you shouldn't save every buck you can and put them to work for you.


I can't believe how many are saying "you can afford it if that is your priority". This is MMM forum, you don't spend that kind of money on housing when you can be perfectly happy with less. You won't get kicked from the forum if you spend $1700 for housing, but let's all agree it's not going to lead to the life MMM has, it leads to spending more on furnishings, entertaining, maintaining things, etc. Live cheap and enjoy life while building up a huge stashe to give your future self freedom to do whatever the hell you want later in life.

norabird

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #16 on: January 29, 2015, 09:33:46 AM »
At 25, have roommates! (I'm 31 in |Brooklyn and have them). Roommates are great if you get along with them and you can usually have more common space depending on the place you find. $1,700 on rent is crazy in my opinion. But so is 4300 a month on restaurants!! That's pretty much my entire month's food budget (I almost never eat out now but used to all the time--this really can change, especially if you start inviting friends over for dinner at your place). $1,100 in rent will get you a totally decent room in a nice apartment, at least where I live (Lefferts). And I actually know of a studio about to go on the market in that area for $1,000. I'd also knock out that 4100 a month on clothes--I promise, as someone who used to spend at least that if not more, you don't actually need them. Check out the throw down the gauntlet no clothes shopping in 2015 thread, look up the 333 project, and read Your Money or Your Life (specifically about the gazingus pins). Since you're young, if you really need to expand your wardrobe, do it from a carefully honed list of quality basics that preferably do double duty (work + casual) that you are allowed to invest in.

Also, your monthly 401k contribution is way too low--I make much less than you, but I contribute about $450 a month (11% of salary, plus a  6% match). So I'd say increase that for starters. Taking the money out before it reaches your pocket is painless and will force you to make some lifestyle changes on eating out.

NYC is a great place to be but you can enjoy it just as much in a less spendy living situation.
« Last Edit: January 29, 2015, 09:39:58 AM by norabird »

theonethatgotaway

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #17 on: January 29, 2015, 10:31:09 AM »
Meh. I've lived in a variety of situations in NYC.

Upward mobility here is real. I know a lot of people that made the 60 % sacrifice for a place initially, stayed in the same place and within 8 years have that ratio down to 20 percent without lifestyle inflation and a great life.

It depends what you want and how you want to live. In NY space is a premium but you can't knock career mobility.

Avidconsumer

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #18 on: January 29, 2015, 10:49:35 AM »
So you're asking if you should commit 38% of your take-home pay for rent, money that's spent - gone -nothing to show for it once the calendar turns over again.  Assuming you work 5 days a week x 4 weeks, you're saying you'd work roughly 8 days a month just for rent. 

No.  That's crazy on the face of it.

What if the premium on the pay in NYC is 30% more than average for his type of career? Then he is most likely better off than most people in the country doing the same role, even though there is a large expenses on housing. There are many factors that make all of us happy and continue to progress in our careers. This may well be one for the OP.

Ricky

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #19 on: January 29, 2015, 12:35:41 PM »
So you're asking if you should commit 38% of your take-home pay for rent, money that's spent - gone -nothing to show for it once the calendar turns over again.  Assuming you work 5 days a week x 4 weeks, you're saying you'd work roughly 8 days a month just for rent. 

No.  That's crazy on the face of it.

What if the premium on the pay in NYC is 30% more than average for his type of career? Then he is most likely better off than most people in the country doing the same role, even though there is a large expenses on housing. There are many factors that make all of us happy and continue to progress in our careers. This may well be one for the OP.

I agree! We may not need "fancy housing" to make ourselves happy, though it helps, but if you prefer to live alone then you just do. And if you can "technically" afford (not going into debt) it and it improves your quality of life (which leads to progression) then you totally should. Plus, everyone's definition of affordability is of course different.

rmendpara

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #20 on: January 29, 2015, 12:42:07 PM »
Yikes...

Ignoring your 20k in one time expenses... which you've got in savings already.

Your regular spending is 1750 + 500 + 600 (1100 current rent vs 1700 new studio) = 2.85k/mo for normal day to day stuff. This excludes savings, vacations, family gifts, etc.

Given 4.5k gross, you will have a spread of ~20k per year plus whatever you take home from your bonus, say another 15k? So 35k total.

35k less infrequent expenses like another year of tuition (10k) and another year of future trip vacation for yourself (maybe 5k), leaves you with roughly 20k again.

20k on roughly 110k income is decent... you'll build savings, but very slowly and far from being financially independent.

Perhaps if you expect income to continue increasing over the next 10 years, but expenses will surely increase if you end up with a family. Just things to think about longer term...

In the short term, it's really decent. Solid income and 100k in assets today, but the savings rate could use a boost. Good luck!

sbdebeste

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #21 on: January 29, 2015, 08:37:35 PM »
Wow, so many people with actual NYC experience! Happy for everyone's input. Here are my excuses and/or appreciation for your advice.

On New Jersey...
Think about places outside of Manhattan. If you move a little further out to the suburbs, you can get a bigger place for less rent. And, depending on where you go, you might not have to pay NYC income taxes.
Just want to throw my opinion into the ring here and add another vote for the suburbs. I live on the Jersey side of the river, and just moved in to a very spacious, just renovated 1BR with a backyard for $850/month, utilities included. I work in Midtown, takes me about 30 minutes to commute on the bus, and I still go out with friends and am able to experience city life, without paying city prices for rent. For $1,700 (heck, for half of that!) you can get an incredibly spacious place even closer than I am, in Weehawken or Hoboken, and it will give you about a 15 minute commute right into Port Authority. Take a look outside the city-it's not so bad on the Jersey side! :)
There are two issues I have with Jersey... one is the fear that I will turn into this:
http://forum.mrmoneymustache.com/ask-a-mustachian/increasing-my-%27life-flow%27/

As I'm already not super-enthusiastic with meeting people, it kinda makes sense to me to live in the area where it requires the least effort to meet the most people whenever I can be bothered to do it. I feel a little similarly toward Brooklyn; I would have been more open to that when I was working in TriBeCa, but now that I'm in Midtown East, it seems like a long distance to go to an area that's not quite as well-connected by subway.

Transportation-wise, eh. My friend in Weehawken has to commute by Jitney bus (not always reliable; traffic in the Lincoln Tunnel; still a 20+ minute walk afterward; long lines to get out in the evning). If I were to take a PATH train, nearest one is still a 20+ minute walk from work. So I'm kinda hesitant there.

As a final note, I've kinda gotten invested in Manhattan and comfortable. I recently subscribed to Blink, which is all over Manhattan but very sparse in outer boroughs and Jersey. Also not having a car is least troublesome in Manhattan (where I also have to deal with the least amount of scary cars and shortest walks between subways). I also don't have to deal with roads that seem more designed for cars than pedestrians, which I see even as close to NY as Newport or Queens Plaza.

(These are not reasons by themselves not to consider places outside of Manhattan of course; it's just that they weigh in on the decisions...)

On "paying rent is ridiculous, you should be happy with less"
So you're asking if you should commit 38% of your take-home pay for rent, money that's spent - gone -nothing to show for it once the calendar turns over again.  Assuming you work 5 days a week x 4 weeks, you're saying you'd work roughly 8 days a month just for rent. 

No.  That's crazy on the face of it. 
Another NYC'er here, and I'll sound off.

Can you afford it?  Yup.

Should you do it?  I'd say nope.  Being in your mid-20's with no commitments is probably the easiest time in your life to live below your means with housing costs.  If you live like a recent grad for even slightly longer than average - say, you have normal, enjoyably roommates till you're 28 or 29, but you don't live in a dump - you will have a crazy ass huge boost on your stash.  You'll also help condition yourself early in life that you don't NEED a nice apartment / house to have a great life.
Remember that the savings you put aside at this point are huge. Building up your stache early means it starts to build on its own that much sooner. Creating a large pot of money that starts to compound and grow means you can have so many options later in life. You can keep adding to it and retire really early, you can use part for down payment on a house or even pay cash without depleting your savings, you can work part time or even not at all when you eventually have those kids, etc, etc. It isn't about having more than everyone around you or more than normal, that isn't the point. The point is to accumulate great wealth at an early age so that later you can live life how you wish. You don't know exactly that that means at this point, and that's fine. But just because you don't know doesn't mean you shouldn't save every buck you can and put them to work for you.


I can't believe how many are saying "you can afford it if that is your priority". This is MMM forum, you don't spend that kind of money on housing when you can be perfectly happy with less. You won't get kicked from the forum if you spend $1700 for housing, but let's all agree it's not going to lead to the life MMM has, it leads to spending more on furnishings, entertaining, maintaining things, etc. Live cheap and enjoy life while building up a huge stashe to give your future self freedom to do whatever the hell you want later in life.
My sensibilities agree that 1700/mo sounds crazy. It's a huge percentage of my income and it doesn't build equity.

But... I'm not a spendy person by nature, and I think that the huge number may be giving a misleading impression of some well-polished, sparkling palace with a doorman, luxury pool, gym, and tons of space to spare. Realistically, if I'm shelling that out in Manhattan, I'm getting 500sqft and a working stove with maybe a closet. Any lower than 1700ish and I'd almost certainly be seceding a lot of quality of life - stuff like no stove, no kitchen, <200sqft spaces, long commutes that involve a car or traffic or paying double, etc. These are the types of things that make it harder for me to get out of bed in the morning and definitely make it harder for me to get home and say "I'm gonna cook and enjoy my dinner dammit." And they might make it impossible to have friends come over or have family stay with me.

Financial side...
Assuming I didn't fuck up a calculation here....



                           save rate   y2fi        annual spend    annual save
SR basic only              0.661835749 8.04859182  21000           41100
SR basic+option            0.565217391 11.29113294 27000           35100
SR basic+optional+600rent  0.449275362 15.70724951 34200           27900



I did factor in your $100k, I did *not* factor in your bonus since it is sort of an unknown, so the picture is a little rosier in every case.

You can afford the apartment by anyone's standards.  It's up to you to decide if the pros of the new apartment outweigh a few extra years of work.

Could you move within walking distance to work for this price?
Adding $600 in expenses would still put you on track to save $2,300 a month (~$3,500 with bonus) or much more if you keep the food bill down. You'd probably save a hair on utilities as well.

You can definitely afford it. And I'd personally do it if it were me. I would love alone in a heartbeat if I were in a good area.  But I'd weigh in things such as job satisfaction, and dig deep and think how long you really want to be in NYC or working in general. You have a good start in savings already.


Yikes...

Ignoring your 20k in one time expenses... which you've got in savings already.

Your regular spending is 1750 + 500 + 600 (1100 current rent vs 1700 new studio) = 2.85k/mo for normal day to day stuff. This excludes savings, vacations, family gifts, etc.

Given 4.5k gross, you will have a spread of ~20k per year plus whatever you take home from your bonus, say another 15k? So 35k total.

35k less infrequent expenses like another year of tuition (10k) and another year of future trip vacation for yourself (maybe 5k), leaves you with roughly 20k again.

20k on roughly 110k income is decent... you'll build savings, but very slowly and far from being financially independent.

Perhaps if you expect income to continue increasing over the next 10 years, but expenses will surely increase if you end up with a family. Just things to think about longer term...

In the short term, it's really decent. Solid income and 100k in assets today, but the savings rate could use a boost. Good luck!
These definitely help with perspective. Yeah, I can "afford" it. But it'll eat into both savings *and* other spending that could be more useful. When I look at my finances and say "wow I saved 20K this year!" it feels good at first, but as a percentage of gross, that's really not that high. With my fingers crossed for increased earnings in the future, those year-to-independence charts also look pretty damn good. Motivating.

On roommates...
If you moved into a shared place, that might be responsible for your feeling of non-ownership of the space (in the psychological sense). Might be better to try and find a roommate first and move into a place together.  I didn't quite feel like I "owned" the living room in my shared apartment, more like I was borrowing it. But I did add a lot of stuff to the kitchen and that made it feel "mine". Also, I feel like a lot of people who have bad roommate experiences don't vet their roommates, or do so well. My roomies interviewed me when I moved in, and when I moved out we interviewed several people before settling on one that seemed like a good match. You have to talk about everything--how to handle chores/cleaning/household supplies, the procedure for having people over, cooking, sharing tools/dishes and food, how to handle disputes. You'll be living with this person, you need to know what you're getting into! People have vastly different expectations of roommate situations and if you have incompatible ones you shouldn't enter that situation.
At 25, have roommates! (I'm 31 in |Brooklyn and have them). Roommates are great if you get along with them and you can usually have more common space depending on the place you find. $1,700 on rent is crazy in my opinion. But so is 4300 a month on restaurants!! That's pretty much my entire month's food budget (I almost never eat out now but used to all the time--this really can change, especially if you start inviting friends over for dinner at your place). $1,100 in rent will get you a totally decent room in a nice apartment, at least where I live (Lefferts). And I actually know of a studio about to go on the market in that area for $1,000. I'd also knock out that 4100 a month on clothes--I promise, as someone who used to spend at least that if not more, you don't actually need them. Check out the throw down the gauntlet no clothes shopping in 2015 thread, look up the 333 project, and read Your Money or Your Life (specifically about the gazingus pins). Since you're young, if you really need to expand your wardrobe, do it from a carefully honed list of quality basics that preferably do double duty (work + casual) that you are allowed to invest in.

Also, your monthly 401k contribution is way too low--I make much less than you, but I contribute about $450 a month (11% of salary, plus a  6% match). So I'd say increase that for starters. Taking the money out before it reaches your pocket is painless and will force you to make some lifestyle changes on eating out.

NYC is a great place to be but you can enjoy it just as much in a less spendy living situation.
Thanks for the tips and thoughts. I'm definitely feeling that in the right conditions, having a roommate or roommates is definitely the best option. But it has to be a situation where I have at least equal ownership of the space and where I can cook and have people over. Without already knowing anyone who's looking for housing, though, the prospect of trying to lease a 2BR+ seems almost out of reach...!

Sorry to anyone whose post I didn't get to quote! I read everything. Lots of interesting and helpful comments.

norabird

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #22 on: January 30, 2015, 09:47:12 AM »
You can always look in Washington Heights or Harlem for better rent/space equations. I also know someone looking for a roommate in a nice place in Crown Heights for $1k (you can PM if you're interested). A nice thing about roommates if you're already unsocial is it builds in opportunities to meet others. Also, you can, via craigslist, jump into a place mid lease and avoid the usual fees.

I get being comfortable in Manhattan, but do spend more time in Bk -- I'm a partisan as I've been living in the borough for 10 years, but I promise, the subway access is fine in most areas you'd end up. If you think other boroughs aren't pedestrian friendly, you haven't been out in them enough honestly!

If you do end up in a studio you love for $1700, it would probably help reduce your eating out costs so there are ways to take that step and still reduce your spending elsewhere of course. And it's always a personal choice. I just think that you are excluding some very nice options because you assume they don't exist. I promise, they are out there!

James

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #23 on: January 30, 2015, 10:46:12 AM »
Best of luck on your decision! Definitely worth the time and research to find what works best for you, it has a huge impact on both fiances and quality of life. Make sure to let us know how it turns out once you make a decision!

RapmasterD

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #24 on: January 30, 2015, 12:20:53 PM »
Here goes. I'm getting ready to get kicked off this forum once and for all.

Dude, you're in your mid 20s. AND...you live in New York City, which the last time I checked, is the city that wet dreams are made of.

1) Take the f'ing apartment.
2) Don't let lifestyle inflation creep up on you.
3) Try and put away a minimum of 30% of take home, which includes your current 401K.
4) Reset your FI objective to 15-20 years from now. FI at 45? Not so terrible, man!

--And you can course correct at any point along the way to accelerate that FI....meaning you can then become a bridge and tunnel loser. OK, THAT was trolling...sorry!!!!

Mortgage Free Mike

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #25 on: January 30, 2015, 03:07:00 PM »
I think you are off to a fantastic start, so congrats!

If you want to live alone, GO FOR IT. You can afford it. If you are not happy with how much you are saving a year after your move, FIND A ROOMMATE AND GO SOMEWHERE ELSE.

A 1 year trial of living on your own will not set you back in the big picture. Enjoy the big city life!

Peacefulwarrior

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #26 on: January 30, 2015, 03:12:57 PM »
You are asking the wrong questions. Never ask yourself if you can afford something. Ask whether it will take you to where you want to be financially.

brooklynmoney

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #27 on: February 01, 2015, 06:56:57 PM »
I can't believe there are studios that cost only $1700 in Manhattan. That sounds like a deal. I would take it. My last 1 bed in Greenpoint was $1850.

capital

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #28 on: February 01, 2015, 07:58:21 PM »
I can't believe there are studios that cost only $1700 in Manhattan. That sounds like a deal. I would take it. My last 1 bed in Greenpoint was $1850.
Probably rent-stabilized. Finding that apartment is where a good broker might well earn their keep.

A friend was just saying he got a decently-sized 1bed in Gramercy a year ago for $1900.

James

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #29 on: February 03, 2015, 01:07:50 PM »
You are asking the wrong questions. Never ask yourself if you can afford something. Ask whether it will take you to where you want to be financially.
Excellent point!
 
Here goes. I'm getting ready to get kicked off this forum once and for all.

Dude, you're in your mid 20s. AND...you live in New York City, which the last time I checked, is the city that wet dreams are made of.

1) Take the f'ing apartment.
2) Don't let lifestyle inflation creep up on you.
3) Try and put away a minimum of 30% of take home, which includes your current 401K.
4) Reset your FI objective to 15-20 years from now. FI at 45? Not so terrible, man!

--And you can course correct at any point along the way to accelerate that FI....meaning you can then become a bridge and tunnel loser. OK, THAT was trolling...sorry!!!!
Yeah, putting away 30% of take home isn't really where we are as a forum. We aren't striving for "Not so terrible, man!"...   Not that you can't throw in your suggestion, but it has nothing to do with MMM, it's just striving for slightly above average. Which is better than below average, but nothing badass about it...

MrsPete

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #30 on: February 05, 2015, 08:55:30 PM »
You are asking the wrong questions. Never ask yourself if you can afford something. Ask whether it will take you to where you want to be financially.
This may be the best answer on this whole thread.  Clearly it is POSSIBLE for the OP to get this apartment, though it will take a huge bite from the monthly paycheck. 

Have you heard of the 5-5-5 method of decision making?  Ask yourself how you'll feel about the decision you're making 5 minutes from now . . . 5 months from now . . . 5 years from now . . . or whatever numbers you choose.  In this case, I think 5 minutes from now the OP will still feel conflicted . . . 5 months from now I suspect he'll be happy if he's enjoying the nice digs . . .  5 years from now I suspect he will be happy if he saves money TODAY because his accounts will grow. 

nycstash

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Re: Case Study: Can I afford $1700/mo for a studio in Manhattan?
« Reply #31 on: February 10, 2015, 07:14:20 PM »
I live in NYC and am not fully understanding this.  I know that housing prices are astronomical, but even so it seems like a mistake to pay $1,700 for a studio. I have friends who have really nice 2-bedrooms for that price in Brooklyn and Queens.  Unless you are wedded either to Upper East Side (boring) or the East Village/Lower East Side (way over-priced), you should at least be able to get a 1BR for that price. You really should consider Harlem, Washington Heights, Queens or Brooklyn.  I would pursue the roommate option. Are you on facebook? if so, put out there that you are looking for someone to share an apartment with and ask people to spread the word.  Another option would be to rent a 2BR apartment and then advertise for a roommate; that way the space is "yours" and you get to be the one choosing who you want. It's a risk, but likely to pay off.  I would do everything in my power to resist spending $1,700/month by myself on rent.