Going Mustachian in NYC? Advice Please!

[NYCGuy]

Hello all -

I found this blog about a month ago, and have been lurking and absorbing ever since.  I'm in my 30s, married to a great guy, and currently living in NYC.  Here is a breakdown of my financial situation:

Assets:
Roth IRA: $66,648.79
Rollover IRA: $4,205.84
Savings: $5,342
Checking: $2,983

Liabilities:
Student Loan Debt: $51,172 (4.55%)

I currently make a little over $75,000 with a potential for a bonus, and my monthly budget is as follows:

Rent: $1,250 (I split with my husband on a percentage basis)
Student Loans: $502
Shared Expenses: $800
Personal Expenses: $800
Savings per month: $950

I've done a breakdown of my personal and shared expenses, and am trying to cut as much as possible.  My current savings rate hovers around 25%.  My DH is NOT on board with living the mustachian life, but I figure that that shouldn't stop me from implementing some of the tools and techniques.

My main first question is:  Once I save up 3 - 6 months living expenses, should I pay down the student loan debt or should I save for a down payment on a condo (which, in NYC, is upwards of $120k).  I HATE HATE HATE having any sort of debt, but I don't want to be cash poor.

[Eric]

If you take all your cash and put it towards a condo, you'll still be cash poor, but you'd be even further into debt!  Even without your debt aversion, at 4.55% I'd pay down the student loan.

[NYCGuy]

Isn't real estate one of the best ways to build wealth?  I'm thinking about focusing hard and using a debt snowball to get rid of these loans...

[Ayanka]

Real estate can be a really great way to build wealth, in case it decreases your living costs. In this case paying off the loans first and then making the calculation on how much down payment you need to keep your mortgage payment under controll seems a better way for me.

[Eric]

Isn't real estate one of the best ways to build wealth?

Real estate is a way to build wealth, but it's highly location dependent.  In NYC though, you're likely to come out ahead by renting and investing the difference.  Have you tried the NYT rent vs buy calculator?  It's a pretty nice tool.

[NYCGuy]

What a great tool!  I shows that for the next 4 years, renting is better (provided I have a 20% down payment on a $600,000 condo, which I don't currently, but could get to within 4 years, saving with the DH.) 

Looks like renting for the next 4-6 years, paying down debt and saving for a down payment is the way to go!

[xenon5]

From your numbers I'm also noticing that your savings ratio is a bit low by mustachian standards.  You mentioned your income is $75k but not whether that's before or after taxes.

If it's before:
$75000/12 = $6250 per month
$950+502 Loan payments = $1452
$1452/6250 = 23% Savings ratio

If it's after:
$6250 per month * 0.72 estimated take home after tax = 4500
$950+502 Loan payments = $1452
$1452/4500 = 32% savings ratio

so your savings rate is currently somewhere around 25-35%.  Depending on your goals, you should find out what you can do to bump up that ratio.

This tool will you an estimate of how long it will take to reach FI based on your savings ratio:
http://networthify.com/calculator/earlyretirement?income=50000&initialBalance=0&expenses=20000&annualPct=5&withdrawalRate=4

At 16%, it will take 41 years to get to FI.  At 25%, it'll take 32 years.  At 60%, it'll take 13 years.  The ideal ratio is for you to determine, but I'm assuming since you're hanging around here you want to be FI sooner than age 65 :)

You haven't broken down your expenses which might help.  Even in NYC, $1600 in post-rent expenses + whatever your DH's personal expenses sounds like there's some bloat in your household spending.

And $600,000 is a hefty sum for a home, so be sure you're ready to establish your roots.  Real Estate taxes are also high in NYC for units in apartment buildings.  Real estate can build wealth, but your personal home is more of a consumable good than an investment.  Here's an article I found with some quick searching, but there are several articles floating around that argue why a home may be a good purchase, but not a good investment.
http://realestate.aol.com/blog/2011/03/31/financial-expert-on-why-buying-a-home-is-a-bad-idea/