Money Talks, So Should You

Broke Millennial: Three reasons not to live in NYC

Erin L.
by Erin L., Dimespring 30 (@brokemillennial)

You’ve been lied to. Sex and the City, Seinfeld, Friends, Gossip Girl, How I Met Your Mother and Girls have all created the “New York City Delusion.” You think you want to come live here.

You’ve heard it’s glamorous and intoxicating while simultaneously gritty and “real.” Perhaps you’ve come in for a long weekend or a summer vacation. You were dazzled by Times Square and awed during a Broadway show. Suddenly, you’re dreaming of the day you’ll escape to the Big Apple. Dreams are wonderful, but let’s be frank, the financial situation here can be bleak.

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New York is the most expensive city within the United States. If the outer-boroughs were counted as individual cities, then Brooklyn would be the second most expensive city (to Manhattan) and Queens the sixth. Apparently, San Francisco recently took the title as most expensive city to rent, by only a few dollars. In 2013, the average cost of a studio apartment in Manhattan climbed to $2,300. A one-bedroom apartment tips the scales at almost $3,000.

Sadly for those hoping to recreate “Friends”, Monica and Rachel’s apartment is far from the norm in New York City. The size of one of their bedrooms is about the standard studio in Manhattan, especially for someone on a lower income. Even Chandler and Joey’s apartment is relatively spacious. They could fit a couch, two arm chairs and a foosball table quite easily into the living room, with extra space to walk around!

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You can live in an outer-borough to save some cash, but even prices in Queens and Brooklyn are starting to sky rocket. A thousand dollars per roommate is becoming the norm for those looking for a decent, and safe, area without multiple people to a bedroom.

Tax on tax on tax

New Yorkers outside of NYC love to complain about how “the City” drives up taxes for the rest of the state. After spending my collegiate career in Western New York, I certainly had my fill of this attitude and moved to the Big Apple slightly biased.

After receiving my first pay check, my biased was replaced with outrage. Those who live, and work, in New York pay not only federal and New York State taxes, but we are also subject to a city tax. The combined city and state tax is starts at 10.4% when you’ve reached $22,000 of taxable income. Obviously, the more you earn the higher your tax percentage.

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Let’s break down the numbers. You earn $22,000 in taxable income. That puts you in the 15% federal tax bracket for 2013 resulting in $3,300 owed to the government. According to 2012 NYC and NYS tax tables, someone filing as single with $22,000 taxable income would owe $1,807 (slightly less than the $2,288 from 10.4%). If you live in a modestly priced apartment for $850 a month you’ll pay $10,200 a year in rent (rent doesn’t include your utilities). Subtract taxes and rent from your annual income and you’ve got $6,693 left to live on for the year. Granted, you’ll get a bit back in your tax return, but it isn’t likely to be much.

Tourists have more fun

Tourists may be looked down on by locals, but they certainly know how to enjoy the benefits of our home. Mostly because they come with the mindset to spend money and take in the shows, the food and the sights. For those of us who spend each day waking up to the City that never sleeps, it can be a financial burden to take advantage of all she offers.

Discounts can be hunted down, but they often include long lines, early wake up calls or some intense boxing-out of other locals. There are a copious amount of free things to do during the summer, but they are often hard to take advantage of if you work regular hours.

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But then again, we live in the greatest city on earth

Money aside, New York City is a playground to those with an adventurous spirit. Money is tight, saving is hard and space is lacking, but those who call NYC home are often rewarded with a wonderful life experience that many only dream of.


Erin is the founder of the blog Broke Millennial. She hopes to increase financial literacy, specifically in the millennial generation. Erin uses sarcasm and humor to keep readers awake while learning financial basics. Erin lives and works in New York City where she's developed quite the knack for finding deals and free events while surviving on a small income. Erin is a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and perspectives on personal finance.