Hello!
Recently, I had the good fortune of getting a big new job as a software developer at an NYC hedge fund. Work is right by Times Square.
We're considering leasing an expensive ass apartment a short walk (~half mile) from my work, and we'd like crticism on our thinking.
THE MOVE:
* Elevates our combined income into a new atmopsheric layer: $144,000-->$237,000
* Frees up the cost of daycare for our 10mo son: my wife's employer is allowing her to work 100% remotely (she is a disability attorney). It will involve some nonstandard hours on her part, with maybe 4-5 hours a day of work during normal business hours plus some early morning/nights while I'm at home, maybe a little weekend time. Obviously this will be tough, but we've decided it's a hustle we want to try for the $25-30,000 savings on daycare.
Our current financial situation:
ASSETS
~$55k retirement
$20k cash
Two cars we will sell. just got them appraised for a total of $8500-9000
DEBTS
$159k law school debt @7.5 and 6.5% (down from 180k when we started paying this May)
Still a tender position financially, but net worth has increased by $50-70k since we started getting our shit together last April (paid off 2 car loans, saved $20k cash fund, increased retirement balances and paid off $20kish of student debt).
EXPENSES (2 adults, 1 10mo infant, 2 medium dogs)
Currently $4800/mo, which includes $1300/mo for full time daycare and $1320/mo for rent. We definitely have a few luxuries in there, but are running moderately frugal outside of daycare. Moving to the city, we will roughly trade rent increase for childcare cost, and consider shaving off a couple fancy things to the tune of
a couple hundred dollars a month. We've posted our full budget before, but it's a bit off topic here--I just want to think through the tradeoffs of living in an expensive midtown apartment.
SO. now I have this fancy job in times square and need to decide where to live. Our general thoughts on this:
* We do not place a high premium on space. We are very willing to pack into a small apartment, be creative with storage and space. A teeny 2br is fine, but packing into a city 1BR--though I believe it is possible--is a little too small for us.
* We do place a high premium on time. Commuting is evil, even on public transportation. I've done a lot of public transportation commuting before, and I find that although in theory you can read on the subway, it's *not* the same as reading in a quiet room.
Here's what we are leaning toward:
2BR Midtown apartment. 0.6 miles from my work. 10 minute walk to work each way per day. $2900/mo rent. Here is a video I made of what the space looks like, apologies for the horrible video quality:
https://www.youtube.com/watch?v=VqAduD9VSq8Based on our research so far, it doesn't seem realistic to beat this price for a 2BR within walking distance to Times Square. You can mayyybe go $150 lower for a smaller, VERY bare bones place, but the tradeoff seems questionable.
The major alternatives people mention are living in Queens, or living in Hoboken. I was initially going to go this route, but was surprised to find that these areas offer $1800+ minimum rents for 2BRs, with $2100 being a realistic price with similar space constraints.
Suppose that living in Queens/Hoboken may save $800 a month. Both bring guaranteed 45 minute commutes during rush hour. Over the course of a month, this is 1.17 extra hours of commuting a day, approximately 25 hours a month. First, there is the immediate cost of a MetroCard I otherwise wouldn't buy - $115. Now we're talking $685 in monthly savings for 25 hours--this values my time at $27.40/hr. My time is more valuable than that.
Then, there are the intangibles associated with this extra time. My new job will probably be quite demanding, and time will be critical. Trading a pain in the ass long commute for a breezy walk offers obvious stress benefits. Together, these factors may translate into improved job performance, which could pay off at end-of-year bonus time. And 25 hours a month is a *fucking lot of extra time*--it's enough time to pursue a serious hobby, or read a shitload of books to my kid, or work out an hour a day 5x a week.
In our income situation, this is the difference between an annual net worth increase of $115k, or $107k. It's a splurge, but it buys something *valuable*--time--while cutting annual savings by less than 10%. I think it's a justifiable tradeoff.
I'm interested in hearing all reactions. Facepunch away :)