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.