I’ve written a lot of posts about how to spend less and save more in New York as well as why you should save money. But what are the MOST effective ways to save? What can you do as soon as possible that will save you hundreds of dollars a month and hundreds of thousands of dollars over a lifetime? While all spending is worth reviewing and comparing against your priorities, some strategies have a bigger impact than others. Below are the five biggest changes you can make to save money while still being able to live an amazing life in this amazing city.
- Don’t Live Alone – Rent is the expense that sets New York apart from the rest of the country. We pay a TON for shelter here. Whether you live with a significant other, friends, or just acquaintances that you know you will get along with, find roommates! I have friends who pay a fortune in rent to live in a studio apartment, even up to $2800/month. Meanwhile, I have friends who are roommates that each pay $800/month. It’s easy math to see you could save up to $2000/month or $24,000 per YEAR! Imagine what fun you could have with that much extra money every year. Imagine if your boss decided to give you a $24,000 raise (after taxes). You’re life would be completely different. Plus, the more roommates you have, the lower your individual bill will be for utilities. Of course, people love their privacy, and I understand that. I just don’t understand insisting to live alone and being willing to pay $24,000 per year.
- Cook Your Own Meals – New York has a ton of amazing restaurants and I think you should absolutely enjoy them. However, for the majority of your meals, don’t just pick up a random, overpriced sandwich or slice of pizza. Cook for yourself instead! So many New Yorkers eat out for every single meal. I have one friend who likes to say, “cooking? oh yeah, I tried that… once… three years ago”. If you used to eat out every meal and then started cooking most meals instead, you could save over $700/month! Again, that’s like getting an $8,400 yearly raise from your boss after taxes! Not to mention you will almost necessarily eat healthier and feel better about yourself.
- Avoid Taking Cabs – We live in a city with one of THE BEST public transportation systems in the world. We also have one of the most walkable cities in the world. Get some exercise while getting around the city and take a moment to appreciate your city as you walk as well. There are so many ways to get around without taking a cab, it’s amazing that people feel the need to take one all the time. Avoid taking cabs and you could be giving yourself over a $4,500 raise per year after taxes!
- Get Your Clothes Spending In Check – New Yorkers have a great sense of style. Just walking down the street, people look great! Of course I think you should feel comfortable in what you wear as well. However, the great byproduct of all these fashion gurus living in your city is that they often donate their clothing to thrift stores. In NYC, we aren’t limited to Salvation Army and Savers. Some of the nicest clothes I own including a cashmere sweater came from Housing Works for a TINY fraction of the original cost. Plus, if you put together a wardrobe plan, you’ll find that you need buy fewer and fewer clothing items. It’s hard to estimate how much you could save per year using these tactics. People spend outrageous amounts of money here that I can’t even comprehend. But suffice it to say, you could easily save $3,000 per year.
- Cut Cable – Come on. We don’t live in 2002 any more. We have more streaming services than you can shake a stick at: Netflix, Amazon Prime, Hulu, Network Websites, and the list goes on. Do you really need to be paying $60 – $100 per month? You can figure out how to watch live sports at bars, or at a friend’s place. The only excuse you have left is that you are too lazy. Well, does the thought of being able to save an extra $1,000 per year motivate you?
Bonus: Look at Your Spending Once a Month – So can you see a theme in the 5 strategies above? They all tackle recurring costs, parts of our NYC lives that eat up our funds month after month, year after year. If you want to go further than the 5 tips above, take a look at your own spending each month. Where does that money go? I promise that it won’t take long for you to see patterns. You will see that you spend on the same things every month. It may not be a fixed amount like a rent payment, but you’ll recognize it. And when you do, you’ll be able to come up with your own strategy to fix it. Are you spending too much for drinks every month at expensive bars? Try inviting friends over to your apartment for a party. Is your cell phone bill killing your bank account? Sign up for a cheaper option like Republic Wireless. Whatever it is, I bet you can come up with a solution that doesn’t hurt your lifestyle. And if you can’t? Feel free to ask me for help with it! You’ll be saving even more before you know it.
Wow. You just saved a ton of money! Of course, a lot of these examples looked at extreme ends of the spectrum, but if you add them all together, you would save $40,900 per year – yikes! I can see why people who aren’t conscious about their spending think you need to make $80k to live in New York City. Of course, you may not be as loose with your money as the people in the examples above. However, I bet you still have a lot of room to trim your spending and still lead an amazing life. Hell, I’m still constantly working on being better with my finances. You don’t have to be perfect. Just be better.
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