Yahoo Finance I Live in New York City on $56,000: Here’s My Monthly Budget
Life in New York isn’t cheap. According to the Missouri Economic Research and Information Center, it’s the sixth-most-expensive place in the country to live with an overall cost of living index is 123.1. Everything from groceries to housing to utilities is well above the national average — and that’s just for the state.
New York City is even more expensive than many other parts of the state. For those who live there, it can be exceedingly hard to make ends meet, especially when living on a tight budget.
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But hard doesn’t mean impossible. GOBankingRates spoke with Seeley Lutz, the founder of News Nuggets and a New York City resident, to find out how she manages expenses in the Big Apple. Here’s what she said, as well as some strategies to make even a tight budget go further.
Life in New York City on $4,700 a Month
According to Lutz, she lives on a monthly budget of about $4,700 — or roughly $56,400 a year after taxes.
“I moved to NYC in the middle of November 2020, when it was an absolute ghost town and without a job,” she said. “I sold all of my clothes to afford the move and my parents gave me three months to figure it out. During that time, I learned a lot on how to manage a budget.”
Here’s a breakdown of her $4,700 monthly budget.
Housing (rent): $2,300
Utilities (electricity, water, gas and internet): $200
Groceries: $400
Health insurance: $189
Dining out/takeout: $200
Entertainment (subscriptions and social club membership): $450
Apparel/shopping: $100
Emergency fund: $150
Retirement savings: $350
General savings: $300
Certain things, like her phone and transportation, are free, as her company pays for them. Everything else, she handles herself.
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Saving Up While Living on a Budget in New York City
Living in New York City on a budget like Lutz’s doesn’t leave a lot of wiggle room for other things. Those who have debts, for example, are likely to have a harder time saving up or allocating funds toward future investments.
But even people who don’t regularly dedicate a portion of their income toward debts, like Lutz, aren’t always able to save a lot. In large part, this is due to the high cost of housing in the city.
“They always say, one of your monthly checks should be allocated to rent, and the other should cover all other expenses,” she said. “In a perfect world, this would work. But being a young 20-something in NYC, it’s nearly impossible to save. You’ll see in my breakdown I’m only able to save about $300 a month.”
While this is indeed the case, Lutz is also able to set aside some money toward her emergency fund ($150) and retirement accounts ($350). Being able to save any kind of money consistently, even if it’s not a ton, is key to building financial stability and knowing things are covered in case something happens.
Money Management Strategies in New York City
No matter where you live, but especially when you live somewhere as notoriously expensive as New York City, it’s good to have sound money management strategies to make ends meet without majorly stressing out.
For Lutz, one of the big things she does is check her bank account every day. Why?
“So many reasons,” she said. “It makes those credit card/debit card swipes much more material and you get a sense of what you’re spending so you can make a more accurate budget to stick to. Additionally, [it] helps you check to see if there’s any fraud.”
According to the Federal Trade Commission, 2.6 million people in the U.S. reported fraud back in 2023, with more than $10 billion lost nationwide. The most common type of fraud was investment scams at $4.6 billion, but other types of fraud are also prevalent.
Checking your bank account and keeping an eye on your credit reports can help you avoid becoming a victim to both fraud and identity theft. It can also give you some much-needed peace of mind about your financials since you’ll always know where your money’s at and can act quickly if something does happen.
There are also other ways to manage your finances and stretch your funds just a bit further.
Get roommates. Since housing is one of the most expensive aspects of living in New York City, having roommates or even living at home — if your family’s local — could help immensely. Roughly 49% of Lutz’s monthly budget goes toward her rent. If the apartment is big enough to add even one person to the lease, that number could be reduced by half. The utility bills could also drop, depending on the new roommate’s usage.
Dine in and opt for free entertainment. For Lutz, $750 of her monthly budget — 16% — goes toward things like restaurant meals, entertainment and shopping. This isn’t a huge percentage by any means, but if you’re struggling to make ends meet or want to free up more cash for other things — like savings or debt repayment — cutting back on these expenditures could help.
Build an emergency fund. Having money in a separate account — ideally a high-yield savings account — is a great way to safeguard yourself against unforeseen expenses. While experts often suggest having three to six months’ worth of money set aside for emergencies, even a few hundred dollars or so is a great starting point. Automating your savings contributions can also help you keep on track.
Use a budgeting tool. If you’ve tried budgeting by hand and have trouble sticking to it, consider using a free budgeting app or tool instead. That way, you can easily track your spending and income and see which areas need improvement — if any.
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