Give Me Back My Five Bucks

Guest Post: How I Live in NYC on $50,000

Hi, GMBMFB readers! I’m MoneyMaus and I’m guest posting for Krystal today while she’s at the Financial Blogger Conference.

Six months ago, I made the huge cross-country move from San Diego to New York. What a change – but one that has been completely worth it!

As background, I’m 25, single, I have zero debt, a $20K emergency fund plus additional savings and a huge support system of family and friends that encouraged me to live where I’ve always dreamed of being. All of these factors are crucial to being able to afford New York!

I went from making a $35K salary in a fairly expensive city to $50K in a really expensive city. This is actually feasible after having learned to live on less for the past three years. While I pay more in rent here, I’m also earning more and I dropped some expenses like gas due to selling my car.

NYC is truly a whole other world. Everything is more expensive, except flowers ($10 for 2 dozen roses!) and nail salons (basic mani/pedi for $20 total!).  Groceries, toiletries from the local CVS, food (it’s very much a take-out/dine-out culture) and of course, rent were the largest sticker-shocks for me even when I had mentally prepared myself for those increases due to ultimate city life!

Here are some ways I make do on my salary here:

  1. Pay Myself First – I’ve been doing this ever since I landed my first job back in 2008. My savings are all automatic and coincide within a day or two of each paycheck. I’ve actually increased these since getting my new salary!
  2. Make Priorities – My current priorities after the basics of rent/food/bills are just having FUN. I go out with my friends frequently, but I try to go shopping less.
  3. Do Free Things – There are LOTS of free things to do in the city! I’ve taken advantage of quite a few. From wine tastings, concerts in the park and comedy shows to kayaking, street fairs and just exploring the different neighborhoods/boroughs, there’s always something that doesn’t cost money. There are also incredibly cheap options like happy hours ($1 beer nights at various bars) and food options  (5 dumplings for $1 at Prosperity Dumpling).

I won’t lie, living in New York has been quite the lifestyle adjustment. I’m constantly going out with friends, for happy hours, dinners, bars/clubs and even the occasional trip. However, I also know that this expensive lifestyle inflation isn’t sustainable for the long term. I don’t actually plan on living in NYC forever, but you never know! (I figure I’ll reassess where I am in my life and career in five years when I’m 30.) After all, I’m still trying to save my cheese. :)

MoneyMaus is a 25-year old NYC resident (by way of Seattle & San Diego). She loves travel, budget, the gym, shoes, food, reading, knitting, and laughter. She also holds the remarkable distinction of living in NYC without any debt. You can follow her on Twitter @moneymaus.

Guest Post: Lessons I Learned From Renovations

Hello! I’m Clare from youngandthrifty.ca.  A fellow Vancouverite and a fellow PF blogger!  I was honored to be asked by Krystal to guest post on her blog.  I am a huge fan of Krystal’s blog – it’s one of the only blogs I read religiously.  If you have been following my blog, you’ll know that I recently became a homemoaner home owner in Vancouver.  After 6 months of searching, we found a cute older home in a great neighbourhood.  It needed some work though (both structurally and cosmetically) and we were prepared to renovate.  We also added a basement rental suite to help us pay down our mortgage faster.

I learned some tough lessons from renovations, so I thought I could share them with you so you won’t make the same mistakes I did.

Lesson #1

You know how they say to budget 25% on top of what you were quoted?  At first I thought that was all exaggeration, but it’s unfortunately true (if you’re doing anything structurally).  The contractors won’t know what’s underneath (even the home inspectors can’t) until they look underneath.  We ended up deciding to replace the water line because the pipes were rusting.  That cost us an extra $1000.  It’s like looking at the tip of the iceberg and finding out there’s a massive slab of ice underneath.

Lesson #2

Changing your mind costs money.  Make sure you know which room is going to be your main bedroom before you add baseboard heaters.  BF and I had thought we were going to sleep in the larger (though more irregularly shaped) room, but then we decided to sleep in the smaller room with the walk-in closet.  We had initially decided the smaller room was going to be our guest bedroom/ office so we had the electrician install a baseboard against the wall.  Then we changed our minds and wanted to sleep in the smaller room so we had to move the baseboard heater or else our bed frame would sit against it (um, can you say fire hazard?).  This cost us another $100 or so to move the baseboard heater.

Lesson #3

Make sure you get a quote for everything the contractor does – and write it down Our electrician is a nice guy (he’s a big softie).  He added flood lights (and the associated wiring) for our back porch, he added a carbon monoxide/ smoke detector for both the upstairs and downstairs (which is necessary of course).  We made the mistake of NOT asking him how much these minor upgrades would cost us.  We assumed it wouldn’t be very much because they were small, seemingly menial tasks (though I suppose wiring a smoke detector, cutting a hole in the ceiling etc. isn’t very menial).  When the final bill came, my eyes widened- $400 for the smoke detector installation ($200 for the smoke detector materials and $200 for his labor).  Yowza.

Lesson #4

You can’t have your cake and eat it too I had some grandiose visions for our house.  I wanted this and that done.  I wanted to make our basement suite look as good as the basement suites on HGTV’s Income Property.  I had wanted our contractor to build a cabinet so that the washer and dryer would be enclosed in the basement suite.  In the end, I decided it wasn’t worth the extra money to do that (I’m also not very handy and neither is my boyfriend haha).  Our basement suite still looks good despite not having the cabinet.  There are sacrifices that need to be made in the interest of a limited budget, although we would probably all like to, we can’t live in our dream home from the get go.

I’m happy.  Don’t get me wrong.  I love love love my new home now.  We’re on the final touches of the basement renovations (just need to move that fridge in, patch up some dry wall, and clean up) and we’ll be ready to list it.  I had wanted to list it before September so we could rent it to students, but that’s another lesson learned- your timeline may not happen if you’re waiting for your local electricity provider to come and upgrade your electrical service and it takes them two months to do it!.

Have you ever had trouble with renovations?  Any other revovation lessons I might have missed?

10 Financial Commandments for your 20’s – Part 2

On Monday, I posted Part 1 (goals 1-5) of how I’m doing with Kiplinger’s 10 Financial Commandments for your 20’s.

Here is Part 2 of my review:

6. Establish credit. In order to qualify for the best interest rates on a credit card, auto loan or mortgage, you need to start building a solid credit history. In fact, a good history can also save you a bundle on your auto insurance or help you land an apartment or a job. Building a good credit history in your twenties will ensure it’s ready when you need to use it.

My credit is good right now. I have a solid credit score and no real blemishes. And I consider that to be some sort of miracle, since I spent the majority of my 20’s being a major financial screw-up. Now I check my credit score with both Equifax and TransUnion once a year, and because of my scores, I have been able to secure 0% financing on my LASIK eye surgery, new car, and braces – as well as a pretty decent interest rate for my mortgage.

7. Have a marketable skill. Your twenties is the time to invest in yourself to acquire those skills that will start your career and boost your earnings. It’s also a good idea to start building and maintaining a network while you’re young. Personal contacts can come in handy to further your career or even enhance your personal life.

My best skills are my ability to work hard, and to motivate myself. Even though I only have 2-year diploma (plus 2.5 years towards a degree that I never finished), and even though I’m not particularly remarkable at anything, I feel like I’ve done fairly well so far. I’ve done the best that I can to market myself, and I think I have a somewhat decent network of people established. My income has increased 250% since my first entry-level job 5 years ago, and that is strictly due to hustle, knowing what I’m worth, and not being afraid to go after what I want. I’d like to say it’s because I possess some awesome specialized skill, but I don’t. :) Now I’m hoping to keep my progress going steady into the future by figuring out how to work smarter, not harder.

8. Cut the financial umbilical cord. You have your own apartment and your own paycheck. You may even have your own spouse and children. Isn’t it time you grew up? If Mom and Dad are still preparing your taxes, balancing your checkbook or managing your investments, consider this: Whoever controls your finances controls your life.

Even though I sometimes get jealous when I see friends still getting help from their parents, I am really grateful that I never got that kind of treatment from my parents growing up. Even though I’d probably be farther ahead in life, I wouldn’t be as independent as I am today, and that will only help me in the future. My parents didn’t pay for my education (although when I lived in Michigan, they paid for my flights home). They didn’t buy me a car, pay for my groceries, fill up my gas tank, do my laundry, buy me random presents, and they also didn’t give or lend me any significant sum of money. Actually, I remember once they loaned me $1,000 so I could repair my car before driving to Northern Alberta for a job, but I paid them back within 2 weeks.

They did, however, let me live at home rent-free while I was in school. I am so grateful I was allowed to do that, otherwise I would have been in so much more debt than the $20k+ I had accumulated after graduation. And as soon as I finished school, I started paying them rent. When I started working, and my contract ran out (I was without a pay cheque for 11 weeks), I lived off of my Emergency Fund and still paid them rent. I never asked for a break, and they never offered.

I don’t come from a wealthy family, and I don’t have a lot of education, so I feel like I’ve had to earn everything that I have in life. Nothing has come easily for me, and I think that has really shaped me into the person I am. I fully believe it was my parents that instilled the work ethic that I have today.

9. Marry wisely. You and your spouse create the most important team in your life. You’ll want to make sure your team works well — and shares similar financial values — so you can work together toward common goals.

Well, I am clearly not married. But even though I haven’t “achieved” this goal yet, I think that my past relationships have given me a really good perspective of what I am looking for in a partner. Sometimes I have a hard time connecting the logical thinking that goes in my head, with what I feel in my heart. And I think when it comes to “love” and what I really want, I need to trust my heart more than my head. Which seems completely backwards for me. But I understand who I am now, and I’d be content with being alone for the rest of my life, than be with someone who isn’t exactly what I’m looking for.

10. Have some fun. Personal finance doesn’t have to be boring. Taking the time to travel and have new experiences before you have a couple of cranky kids in tow is not only easier, it’s cheaper. Build some memories, meet new people and try new things. But please, don’t go into debt to do it.

I think it’s obvious that I’ve had my fair share of fun while in my 20’s. The first half of my 20’s, I had fun on borrowed money, and ended up with a huge pile of debt. And then during the last 5 years, I’ve had  more fun than I’ve ever had, and it’s all because when you save and pay for everything up front, there’s no stress or guilt involved with spending. :)

Each year keeps getting better than the next. 2011 has been such a wonderful, sad, weird, refreshing, strange year. I’m excited to see what kind of fun 2012 has in store for me.

How are you doing with goals 6-10 of the 10 Financial Commandments?

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