Reading Time: 8 Minutes
Places like NYC, San Francisco, and Seattle are a dream situation for an aspiring Money Habiter. There are fantastic job prospects, amazing experiences to be had every day of the week, and all kinds of diverse people who can broaden your view of the world and add richness to your life. The one downside? The cost.
Fortunately, you can counter this issue with some judicious compromises. Below are the tactics I used to FIRE while living and working in New York City.
Big Opportunities First
If you can make the compromises in the biggest buckets of spending, you will see the most dramatic improvements. That means we start with housing.
The trinity of factors in housing are price, location, and size.
You can have any two. You cannot have all three.
Want to have a big place that’s cheap? That’s fine if you’re willing to commute for an hour each direction. Want a perfectly situated and spacious apartment? It’ll cost you.
My decision to live in New York City was about valuing the amenities. Because of this, location was paramount in my decision. As FIRE has been my goal for years, price was the obvious other non-negotiable. That’s how we ended up in the current Money Habit pad.
It is an “efficient” 325 square foot apartment in what I wholeheartedly believe is the best neighborhood in the city, the West Village. When I walk out the door, I am instantly surrounded by quaint shops and charming cafes. There are dogs and babies on every street corner. Last week, I had a craving for pizza at 2:30 am on a weeknight. There was a place five blocks away that hooked me up. Paradise!
I pay for it in space. Many people would cringe at the thought of two people and a dog sharing 325 square feet. We have lived in the same building for five years, and it’s been very pleasant.
You need to realize that you are bad at living in efficient spaces because you have very little practice, and you have not learned how to optimize the space.
Just like any skill, you need to invest in it. My source for inspiration is Hong Kong apartments. All you need to do is read four or five articles on space saving tips and you will be well on your way to a comfortable arrangement.
Some of our space saving tricks:
- Loft the Bed – That’s 150 cubic feet of storage instantly
- Fill Suitcases – You doubtless have a few bulky items like suitcases to store. Make sure you fill them with other items that need to be stored
- Thin Hangers – You have no idea how much space they will save you. These literally doubled the amount I could put in the closet.
- Shelving – You can go to a hardware store and for a few bucks have yourself some floating shelves and extra shelving for your cabinets. One of the biggest wastes of space is the lack of full utilization in your cabinets. You put everything in, and half the height of the cabinet is just empty airspace. You can’t stack things on top because it becomes a messy pile. Solve this with an extra shelf.
- Expandable Everything – Inflatable mattress for guests, expandable table for when we have company over, you want anything that can expand.
The equally important aspect to living comfortable in a small space is to invest judiciously in design.
With an investment of $200-$300, you can transform a space to make it seem much airier and high-class:
- Paint – Not just the walls, but learn how to paint basic pieces of furniture. This is an easy way to get all your pieces to coordinate so it doesn’t look like you are a college student with ragged odds and ends. $50 at home depot on paint and supplies will let you get all the pieces to coordinate.
- Accent Wall – In a small space, you can draw the eye to one wall to make the area seem larger, preferable the wall with the windows. There is super easy peel and re-stick wallpaper options to give it a classy look.
- Mirrors – Add a few mirrors to the room to make it look larger
- Pop of Color – Pick a bright accent color which will draw your eye in the room.
Note: The most expensive design element we incorporated into the apartment is that furry dude. We like to call him the moving rug.
- Ethnic Grocery Stores – One of the benefits of living in your super expensive HCOL city is that it has a diverse set of grocery stores, and your local ethnic stores are where the best deals can be found. I go to Chinatown for all my produce, meat, and seafood. I found my favorite grocery stores on Yelp.
- Value Grocery Stores – Trader Joe’s is my lifeline. This is where I pick up everything else (frozen meals, milk and eggs, cereal). Between the Chinese grocery store and Trader Joe’s, the hubs and I eat like kings for less than $450 a month.
- Eating Out Only Socially – We have a budget to eat out with friends as a social experience, and this is basically the only time we eat out. When we arrange a get-together, we often suggest hole-in-the-walls in the East Village where the food is good and cheap, or we pick brunch where we can soak up luxurious ambiance but at lower prices than dinner.
- Regular Cafe/Coffee Trips – Part of the reason I live in the city is my enjoyment of the ambiance, and there’s nothing like writing on my laptop at a local mom & pop coffee shop. For $4 a week, I can make this a regular occurrence. There are an insane number of unique beverage-focused locales to soak up ambiance. Places that only focus on ciders, roof top bars, beer gardens, wine bars. When I want ambiance at a lower price tag, I opt for something on this list. Not cheap, but definitely workable into the budget.
- Bonus Tip/The Right Credit Card – The best rewards deal I’ve found for restaurants is the AARP Visa credit card, which gives you 3% back on eating out. You do not need to be an AARP member to apply. I delight in this card, because every time I pull out the card, it reminds me of my FIRE goals. An excellent reinforcer of judicious restaurant spending.
Purchase on Craigslist
When you are making a purchase, use the advantages of your city (density, diverse incomes) to scout for great deals on Craigslist.
You can get a one year old Crate & Barrel couch which normally costs $2000 for $600. You can score a bike which retails for $500 for $200. Your fancy neighbors in the Upper East Side or Tribeca have tons of expensive gadgets they no longer have uses for and will sell them to you gently used.
One guy who bought a PC part from me told me he always tries to buy his stuff from the fancier neighborhoods. His reasoning was actually quite sound, and you’ll find steals in the thrift stores in the fancy neighborhoods, since that is where they donate all their gorgeous, perfectly usable stuff.
Keep your eyes peeled around typical move out dates, which tend to be at the end of the month. There’s nothing like the prospect of dumping a piece for $0 the next day to make a motivated seller out of someone.
Look at this couch-apalooza on Craigslist! Any of these can be had by you for a fraction of retail price because of the beauty of density in big city living.
One of the huge benefits of living in your fancy city is the amenities, so use them! I’ve had my eye on Hamilton tickets, which have an insane scalper market snatching up all the inventory. If you check secondary ticket sites on the day of the event, though, you will see that when it gets to within an hour or two of the event, you can get reasonably priced tickets. Your entertainment options on Groupon and Living Social are going to be vast and varied. There are also a million completely free things to do like walking the Brooklyn bridge, free museum nights, and new bands to check out.
Rescue the Runway Animal Adoption event? Only in New York. Love it.
“Just Enough” For Everything Else
There are a million ways to save on things where you need just enough. For example, I now use MetroPCS and get unlimited data, talk, and text for $30 per line per month. What matters most to me is reliability and coverage, and with just a little research I discovered that MetroPCS was actually faster in NYC for me than my previous carrier, AT&T.
What matters most is coverage in the areas you will be spending the most time, not necessarily a carrier’s full nationwide footprint.
Are you planning to place a ton of calls in Casper, Wyoming? Then what does it matter if your carrier doesn’t have great coverage there?
Source: Tom’s Guide
The world is your oyster, even in a high cost of living area. With just a few creative tricks, you’ll be able to sock away the cash while still enjoying a fantastic lifestyle.
Any others currently living in an expensive city? Share your favorite tips in the comments below.