NYC's Low Cost of Living

NYC’s Low Cost of Living

NYC's Low Cost of LivingNew York City is SOOO expensive!

I hear that constantly. Even other finance bloggers from other cities will approach me and ask “wow, how do you save money in a city like NYC?” Some of these people are genuinely curious., But with others, I can read between the lines. Their question is laced with doubt. What they are really saying is. “Tell me your tactics and then I will be able to happily refute them, either to your face or silently to myself and be content with my choice not to live in the depraved money-suck of Manhattan.”

I’ll be the first to admit that NYC can be an expensive city. The only reason that it can be expensive, though, is because there are so many OPTIONS. With over 8.4 million people living in one city (holy crap! 1 in 38 people in the United States lives in NYC!) and over half a million non-farm, private businesses, there are a LOT of ways to spend your money.

But guess what? The increased population and the creative culture that NYC has means that there are a lot of ways to NOT spend money as well. Of course, I’ve talked about various hikes as well as nature walks and even an amazingly challenging urban walk. I’ve talked about cheap sporting events and totally free art galleries. And believe me, there is a LOT more out there. Life has been busy, but there are a lot of activities that I need to get back to before I post about them because I am historically bad at remembering to take photos. There are a ton of free and cheap things to do in the city.

Very Simple Math

Let’s get to the point of this post, though, NYC’s low cost of living. Sure, there are cheap entertainment options, but let’s talk about the necessities to really get to the heart of how expensive NYC is vs a smaller town. Again, there are a lot of expensive options, but so many cheap ones as well. Let’s look at the “big” expenses:

  • Food: Shop at Trader Joe’s where the prices are the same across the country. Done. For dining out, see my cheap eats section. You can go out to eat at places that have better food, more variety, and lower prices than a random town in the middle of nowhere that only has an Applebee’s (yuck). Winner: Tie (well, NYC wins with the Cheap Eats, but I’ll let it slide).
  • Shelter: There are all sorts of tactics you can use to soften the blow of NYC rent. However, at the end of the day, you will still end up paying more for housing here than you will elsewhere. Winner: Smaller Towns
  • Clothing: Thrift stores in NYC are amazing! You can definitely pay less and looks better here than a random small town where you have to get everything from Old Navy*, especially if you have a wardrobe plan. However, if you DO have a wardrobe plan, then you aren’t spending too much on clothing anyway, so any difference is minimal, so I will conclude… Winner: Tie
  • Transportation: I have outlined not having to own a car as New York’s biggest competitive advantage. A $113 ($112 if you re-use your old card) monthly metro card is really all you need! Just make sure to avoid cabs like the plagueWinner: NYC

So, looking at these four major expenses, two are ties. Right now we are only looking at Rent vs. Transportation. Let’s do some VERY simple math.

  • I pay $875 in rent/month.
  • I pay $113 (rounding up) in transportation/month.

My Total (for those two categories): $988/month

  • Car owners pay an average of $9,000/year on cars and car related expenses according to AAA. That’s $750/month.

My Total – Car Owners Expense = $238/month = Small Town Rent

That means that I have equivalent expenses to someone in a small town who pays $238/month in rent . For the small towners out there, if you pay MORE than $238/month in rent, then my core expenses are less than yours, on average.

Of course, there are folks in small towns who don’t own cars. Hats off to them. However, most people in this country choose to own a car (or multiple cars!) and can still live a frugal lifestyle. I choose to live in NYC. Don’t think I can’t live well on a budget here as well!

 


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15 thoughts on “NYC’s Low Cost of Living

  1. Louise @ Good Financial Choices October 6, 2014 at 11:37 am

    I like this post a lot – and it doesn’t even go into the cultural capital and experiences you can get living in a major city, which is one of the reasons that I love living in London.

    I’ve got a a 24 hour stopover in NYC in a few weeks, I’m sure I’ll manage to make it a frugal trip – I’ve done the big sights before, so thinking more about culture and ‘living’ this time.
    Louise @ Good Financial Choices recently posted: September 2014 Spending……£3,951My Profile

    • Mr NYBudget October 6, 2014 at 12:39 pm

      Thanks Louise! Absolutely right as well – the experiences of living in a city like NY or London, while not quantifiable, are immensely valuable.

  2. Andrew@LivingRichCheaply October 6, 2014 at 12:02 pm

    Good points. I think the housing is a significant expense when compared to other locations. It gets a little more difficult when you have a family though…harder to still have roommates at that point. That and childcare is also very expensive here. As for food, I think that groceries can be pretty affordable depending on where you shop…probably cheaper than some of the grocery stores in small towns. Produce/fruits/meat are pretty cheap at the ethnic supermarkets. Since you’re down in the area…check out some spots in Chinatown. Plus, the street vendors have great prices: $1 to $1.50 for a box of strawberries.
    Andrew@LivingRichCheaply recently posted: Versatile Blogger AwardMy Profile

    • Mr NYBudget October 6, 2014 at 12:38 pm

      Very good point about how the major expenses that hit your wallet change when you have a family. I definitely haven’t done a deep dive into those expenses. But you’re absolutely right about groceries. I definitely need to explore more ethnic grocery stores!

  3. Kenyon October 6, 2014 at 1:44 pm

    Reading your posts, I’m pretty sure Honolulu takes the cake as the most expensive city in the U.S. Our housing prices are comparable to NYC. However, without comprehensive rapid transit system, it is difficult (although not impossible) to live without a car. While I own a car, fortunately I live close enough to work to walk. With over 80% of our food being imported thousands of miles across the ocean, our food is more expensive than anywhere else in the U.S. (which is why Trader Joe’s refuses to set up shop here). That’s probably a huge reason why the Costco in Honolulu is the highest grossing in the nation – buying in bulk is the only affordable option! Thank goodness for the TJMaxx’s and Ross’s for clothing, though.

    • Mr NYBudget October 6, 2014 at 3:29 pm

      I actually spent my young childhood on Maui, and while I wasn’t terribly conscious of cost of living at that point in my life, I definitely remember it being an ongoing topic of conversation among adults. That said, there are obvious benefits to living in Hawaii, so of course, if the benefits outweigh those extra costs, then it’s a good deal!

      • Kenyon October 6, 2014 at 4:51 pm

        Very true. You get what you pay for. Paradise.

  4. Stefanie @ The Broke and Beautiful Life October 8, 2014 at 3:03 pm

    My motto is NYC is as expensive as you want it to be.
    Stefanie @ The Broke and Beautiful Life recently posted: Rethinking the Survival JobMy Profile

    • Mr NYBudget October 8, 2014 at 5:13 pm

      Good motto! Exactly right!

  5. Mrs. Bookworm October 11, 2014 at 2:34 am

    My husband and I used to work in Manhattan before we moved to Tokyo and got married. I rented in Queens and he in Brooklyn. We both agree that other than housing, NYC was fairly cheap compared to what we’re spending now in Tokyo. NYC rent is just really ridiculous – it’s not just the amount you pay but also the quality of the place you’re getting. Most of the housing available in NYC are decades old whereas in Tokyo there’s a wider selection of fairly modern apartment units (same cramped living conditions in both cities though). Food prices and clothing items, on the other hand, are killing us here in Tokyo. Fresh meat and produce here is significantly more expensive. I miss all the NYC cheap eats!
    Mrs. Bookworm recently posted: Day Trading: Make Millions or Go BustMy Profile

    • Mr NYBudget October 11, 2014 at 7:46 am

      Thanks for the comment Mrs. Bookworm! It’s funny you should mention the old vs. new constructions. I had no idea why so many people in NYC are obsessed with pre-war buildings. Why would you WANT something old? Then I moved into one recently, and the thick, sturdy walls mean that I don’t even know my neighbors exist when I am in the apartment. Anyway, just an interesting aside.

  6. BCB October 12, 2014 at 10:13 am

    I agree with you in principle as most people blow tons of money on cars. However, in my current situation, I do not own or drive a car as I bike everywhere. And my wife has a car without a loan, uses less than one tank of gas per month, I just decreased the cost of insurance from $120 to $57 per month by switching to a different company and a small increase in deductible, and the car is over 10 years old so registration is very affordable. We also do all minor repairs at minimal cost. Thus, we pay a total of $100-120 on every month for car related expenses.

    • Mr NYBudget October 12, 2014 at 10:41 am

      That’s awesome! And yes, there are definitely more opportunities to save tons in other places. I just worry about the folks who do own cars and use them all the time thinking that “at least I’m saving more by not living in NYC” – there is also the initial out of pocket expense, even if it is currently paid off.

      Regardless, it sounds like you have found an awesome way to be frugal and live well! Can’t beat that!

  7. Alex October 19, 2014 at 7:37 pm

    Wow, $875 for a room in Manhattan is pretty good deal. I would be interested to see the breakdown of your monthly budget such as food, entertainment etc. I would like to move to New York soon and and am single. Trying to figure out how much I need to make to live there. Thanks.

    • Mr NYBudget October 20, 2014 at 8:12 am

      Thanks Alex. I may start sharing that in the future! For now, suffice it to say, I can get by on around $800/month for non-rent expenses. Sometimes I spend more than that, but i could live comfortably, spending $800/month.

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