VIEWER QUESTION: What kind of job would you say is needed to stay up with the prices and rent in the city? MY ANSWER: That is a really tough question to answer because one person can get by on an income and someone else can struggle trying to survive off of that very same income. It really truly depends. It depends on your financial responsibilities, your obligations and your overall spending habits. It used to be that they said you should make sure that you make 40x your rent. Meaning if your apt is $1,000/month you should have an income of $40,000+ to guarantee that you will be comfortable. However, I personally dont think this is either feasible or true. We all know rent is crazy expensive in NYC and most New Yorkers are not middle class. So if we only rented apts based on this formula a lot of New Yorkers would be homeless. I say that you should use another rule of thumb. Make sure that your rent and bills combined take up 1/2 your take home pay after taxes or less. For example: A person rents an apartment and the following is their bills/expenses. Rent: $900/month Cell Phone: $50/month Cable/Internet: $150/month Gas/Electric: $75/month Total Financial Obligations: $1175/month. Id say that person should aim to take home at least $2350/month after taxes if they want to live comfortably. If they spend the rest of the money unnecessarily and end up broke and depressed then that is because of them. It is not because life is getting in the way. If this person does not make at least $2350/month or a person who makes that amount has far more bills/responsibilities than what is mentioned above (student loans, car payments, etc), then he/she would either need to be a person who is great with controlling their spending or they need to rent a cheaper space (which is pretty difficult to do in NYC). Perhaps they should remove some unnecessary expenses from the equation (like the cable, car payment,etc) or they should opt to rent a room, get roommates, etc. Maybe they can do a combination of these things to get the most out of their financial situation. Of course millions of people in NYC are living in circumstances where more than 1/2 of their income goes towards rent and bills. That is completely do-able with some good economic planning. But I am a big believer in not living paycheck to paycheck. I personally wouldnt advise people to put themselves in a situation where every penny coming into their home already has something it has to go towards paying. I have lived that way and it sucks. As I am learning ways to decrease spending and pay off debt, I am going to advocate that sort of lifestyle to others. It is hard as heck but I see a light at the end of the tunnel I didnt see when I was living check to check.
Posted on: Fri, 14 Mar 2014 12:02:15 +0000
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