1) UTILITY BILLS. Get these down to the minimum. Compact fluorescent bulbs. Sign up for an alternate energy provider. Put your “vampire” appliances on power strips. If you’re not using the appliance, turn it off.

2) THRIFT/STREET FIND At one point I was so broke that my hang-out clothes came out of trash on the street and my work clothes came from thrifting. Hint: church rummage sales are way cheaper than thrift stores. Call the religious institutions in your area and find out when their sales are. If you have style you can really rock this. The same goes for furniture. I bought very few items of furniture for my apt.

3)CHEAP APARTMENT. NYC apartments quality is on a sliding scale going from large apt/scummy neighborhood to small apt/nice neighborhood for the same amt of money. Get your rent down to as low as you can for an apartment/area you’re comfortable with. Don’t pay a broker–go door to door and ask the apartment supers.

4)TRACK YOUR SPENDING. You’ll find some surprising money drains.

5) EDUCATE YOURSELF. Read all the personal finance stuff you can. Talk to people–every New Yorker has personal saving tips.

As a 23 year old with $13,000 in credit card debt… I recommend that you put off saving $150/mo for two months and GET RID of your credit card debt.
I’ve had credit cards since I was 18 and I was always very careful with them. Then I made the mistake of listening to my dad when he said “oh, just put it on the card, I’ll pay for it.” It’s a nice gesture and all, but now that my dad CAN’T pay for it anymore (complicated story), I’m stuck with $13,000 of credit card debt… half of which is college tuition that fin. aid didn’t cover.

At the very least think of it this way, if you can get rid of all of your credit card debt in just two months and hide the card(s) so you don’t rack up anymore debt, that’s one (or more) less bill you’ll have to worry about each month.

I also freecycle (http://freecycle.org/display.php?region=US%20Northeast#New%20York). I give away things that I don’t need and get things that I do need - all free. That will save you a few dollars.
Live frugally - best advice you can get…

As for some of those questions.. yep, I already have 2 roommates (in a 2-bedroom apartment.) I’m moving in April (lease is up) hopefully to a cheaper place. But for my first 2 years in the city, it was worth it to me to be in a convenient location (really close to work–I can walk!) and it’s safe. Having almost 2 years under my belt, I think I can venture out now! So I’m working on moving.

I actually just got a very unexpected small windfall for Christmas which makes me much, much more comfortable about my emergency fund. That was incredible luck and going straight to the ING account to start earning interest.

As for getting a raise… I am fairly entry level, but the *really* sad thing is, I already got a promotion and a fairly big raise! My salary before that was even worse! That was almost a year ago now, so I’m starting to look for another job if I don’t get another raise soon. It wouldn’t be huge, but my industry is such that these few years of drudgery are sort of required. Sigh. I’m getting promoted fairly fast so far (My first one was after 6 months) so I’m going to stick with this field for awhile. The good news (well, not really because I’d love to go back to school..I love being in school) is that a master’s degree is probably a detriment to my career. That sounds kind of sad, but in reality, practical experience is much, much more highly valued. So at least I’m on the right track there (with no more expensive school).

I’m going to look into lowering my student loan payment again. I’d have to double-check the interest, but it’s definitely less that the 4.5% that ING pays.

Anyhow, thank you all so much for your help. I think what was most helpful was the reminder that this is a slow process. Gotta remember that I’m 23 and it’s ok to be broke for a few years while you’re young as long as you’re saving wisely. Thanks again!

Amanda

PS: I’m 100% debt-free as of a few weeks ago. Hurrah! (And with that totally unexpected emergency fund boost, I’m feeling much more secure.

If the loan’s rate is less than what you get with FDIC insured CDs, once you get the buffer, keep paying the minimum and buy CDs instead. When CD’s won’t pay what the interest rate on the loan is, start paying off the loan as the CD’s term expires. There is no risk here, and you’ll pay it off faster this way.

Stave off using the credit card except when purchasing things you need the protection from, and then only when you can pay it off that month. Pay it off that month.

You sound like you have an entry level position. You’re not supposed to be “living” when you have a job like that, you’re supposed to be working like a dog so you can get a decent salary. Work like crazy, take extra responsibility, and get an apartment which is cheaper (takes some looking, but there are plenty in NYC if you persist).

Entry level salaries have an expectation that quality personnel will get 10-20% raises over the next few years if they’re worth it. You just have to work like crazy and avoid financial ruin erstwhile.

If they don’t have more use for you at work then you can currently do, get a secondary job a couple nights a week that doesn’t go too late.

Oh yeah. Fellas are useful for free good times as well. Although from what I’ve heard of the dating scene in NYC, that can be hairy.

–Michael

FT
http://www.MillionDollarJourney.com

Also, not paying off your student loan early will also be good for your long-term credit. Making many years’ worth of payments on-time looks very good on your credit report.

Also, see if you can find a part-time job waitressing at a place where one of the perks is free food. That would be both a supplement to your income and a reduction in expenses.

Lastly, ask for a raise. If you’re not clear on the policy at your company, ask. Insistently. If you’re past due for an annual/quarterly review, insist on having one ASAP. Shop around to other companies in the same industry. Even apply and go to some interviews. Don’t be scared about letting your boss know about it — if they value you as an employee and know that you’re thinking about ditching, you might be surprised what kind of raises they can come up with. Job loyalty (both employee and employer) is long dead — don’t feel guilty about it. Just do it. Don’t let yourself get trod upon.

It doesn’t seem you carry any credit card debt, so that’s not a problem. Perhaps use credit cards to your advantage and get one that saves 5% off groceries. As long as you continue to pay it off, things are better there.

Pay the minimum on the student loan. If it’s a ridiculously low percentage you may be better off putting in ING as Neha says. At the very least that’s $50 that you can put towards your emergency fund. If there’s an emergency ask yourself if you can “re-borrow” the money at the same rate as your student loan. I’m guessing the answer is no.

As far as moving goes, I can’t think of industry that only exists in NY City. I’m thinking you must be advertising agency, but they are everywhere. Since you don’t give us your occupation, we can’t really go any further with moving. I’d look into seeing if you can somehow pay less than $1,000 a month for rent. I’m guessing not since you’re already sharing a place, but it doesn’t hurt to look.

That leaves trying to increase your income. Unfortunately there’s not really a quick fix to this one. It could mean looking for a new job. It could mean putting more effort into freelancing. It could mean leaving your industry all together (which is something I would consider if that’s the best pay they can give you). It could mean starting a blog - it’s not for everyone and it’s not always a profitable thing (especially if you are me), but if you are good there’s money to be made. Perhaps you could take bartending class and learn to bartend at night or on the weekends.

In the end, I think you realize that there are really only two things that are a problem. 1) Your take home pay is too low and 2) The place your living costs too much. You aren’t doing bad as long as you are in a growth industry and can expect 15-25% raises yearly (preferably starting with the 25%). If you can expect cost of living increases, then you’ve got to get out. It’s probably worth having this discussion with your boss sooner rather than later. I’m sure she/he understands that cost of living situation and that your salary is far below the average for the City.

As for your income, what is the pay range for the next position for you? Is that something to which you can look forward or would that leave you in much of the same position? How many years do you have to put in before you get a salary that would make you live less paycheck to paycheck? I am in a NYC-focused industry that pays very little and am considering a career change/re-orientation.

As for expenses, your rent is the black hole. As others said, would moving make a significant change in your lifestyle? PS: I live in Ditmas in Brooklyn for $550 with 3 roommates.

I live in the midwest and here you can get a 1300 sq. ft. home built in 2006, two car garage, fireplace, central air, three bedroom, two bath on a 30 year fixed for the same monthly payment (maybe a little cheaper).

I don’t think being a city dweller is a bad thing, but you need a good enough job to make up for it.

I know that sounds ridiculous, but I’m betting your interest rate on that is ridiculously cheap (is it lower or higher than what you get from ING?)

Stop paying that off, and instead start putting that money in a Roth. You didn’t say what you work on, but I’m betting that you expect to be earning more money in coming years — if so, investing that money now is your best bet.

I’d also check on whether the conventional wisdom that NYC is the only location for your industry is true. If it’s publishing, for example, there ARE book publishers outside of NYC. Sure, they’re not Penguin or whatever, but do they have to be? Questioning some of the “everybody knows” statements like that might be worth doing.

At your age you are doing 100% better than virtually all of your compatriots just by not digging yourself into a deep hole of consumer debt!

My top 3 suggestions for those in just starting off (usually in their 20s) are
1) Keep your credit cards at $0 (pay them off each month)
2) Fund your 401k up to the match (at least)
3) Get started on an emergency fund

It sounds like you’ve got all three under way.
But if your student loan interest is less than 5.5% I’d stop prepaying that and focus more on your emergency fund.

Next I’d suggest the following

1) Focus on increasing your salary - ask yourself how can you get a raise / promoted

2) When you hit 3 months of an emergency fund - switch the focus more to a Roth IRA - you’re guaranteed to need to retire but there’s no guarantee you’ll ever need an emergency fund (you can always raid your Roth if things get really bad)

3) Start saving for an apartment/condo/house

4) Try to hold off on buying a car as long as possible - between $$$ to purchase them, taxes, gas, insurance and depreciation they will suck you dry.

There’s not much more beyond that at this stage.

Best,

-Frank

1) Stick with your friends who can have a good time without having to break the bank. If you have good friends who can really have fun with a cheap bottle of wine and home-cooked dinner or are content to go to bars with cheap beer, you won’t hit your 30s regretting having missed out on having fun while you were younger. Share this time with others.
2) Ignore the NYC PR machine’s hype about what fun high society is having at Place XYZ. You’ll go someday if you want to.
3)Focus on building your career and professional life. You hopefully picked an industry where people eventually make more. Work on building the skills and contacts that will get you from where you are now to where you want to be. Have a plan.
4) Build that emergency fund. Nothing will put you in a tailspin like a temporary setback of some kind.
5) If you’re really only paying $1000 a month in rent right now, you’re not going to find much that’s cheaper. Don’t move to a suburb for $800 a month in rent and then add on MetroNorth Fare fare, larger utilities, etc. If you do find something cheaper, stick with something on the Subway or PATH.

I would actually argue for doing the opposite of what most people are saying with regards to retirement vs the student loan. You mentioned that your student loan is a “ridiculously low rate”. If it’s locked at a low rate, honestly, I’d pay the minimum on it until your emergency fund is set up and your roth IRA is maxed out.

I am in a vaguely similar situation in that as a graduate student for years on end (I’m in a very long program!) I have a fairly limited income relative to expenses for an unusually long time. In my case, I was deciding between paying off my mortgage at anything above the minimum rate vs maxing out my roth IRA contributions. For the first couple of years, I figured guaranteed returns were better than not guaranteed ones, and skipped the IRA to pay the mortgage. Once I had a 10 year history of following what I did have in my IRA, however, I sat down one day and calculated my averaged yearly percentage returns on my IRA money - and it was well more than twice (!!) my interest rate on my mortgage. So, given that a roth IRA is a great deal where if you skip your $4k contribution now you’re never going to get the chance to make it up, and that even ignoring the tax advantage on average your returns are so much better than your interest rate on your student loans (which in turn actually have a tax advantage of their own - you’re deducting the interest on them from your taxes, right?) I would say it’s clearly worth it to max out all other forms of savings before paying more than the minimum there.

I definitely agree about English Major’s metrocard comment. A 30-day unlimited metrocard taken out pre-tax is by far one of the best deals I’ve ever encountered. Especially for a subway system that runs 24/7.

I also wanted to say that while you are busy cutting out utilities and getting rid of cable, you should head on over to the NYPL (nypl.org) and get your library card on. Find the branch closest to you and you can search for books/dvds/vhs etc online and have them delivered, (free of charge!) to a branch of your choosing. Booya. Free entertainment. Don’t forget to return items on time though!

1. Seriously, Amanda can be paying less for rent. I pay $600/month for a big bedroom (which I share with my boyfriend) in a recently-renovated Manhattan two-bedroom. Not that $1000/month is an uncommon price in New York, but that doesn’t mean you can’t find cheaper, especially if you’re willing to live with several people. In my social circle, only people who live alone pay that much in rent. Depending on convenience to her job, she should check out Greenpoint, Sunnyside, and Flushing. This is the big one—any price drop she could find in her rent is money she could be putting right into savings.

2. She should make sure she’s getting the best deal with her Metrocard. It’s surprising how many people don’t take advantage of the monthly deal and run it through an FSA at work.

3. She should make sure she’s not paying for extraneous features on her phone. Most common money drain in my social circle.

Other than that, really, her frustrations are the frustrations of a mini-generation of young New Yorkers who are waiting for their salaries to hit a level that allows them to have brunch with friends without budgeting for it for two weeks. My hunch is that we just have to make smart choices with the little bits of money we have and wait.

A few years ago, I lived on credit cards, racking up about $1,000 worth of debt, in order to live in this city over the summer and intern for peanuts during undergrad. That landed me the current job when I graduated. I chose to live in the city, close to public transportation, in an apartment that cost about half of my take-home pay. Some might have seen that as a mistake, but living in a not-scary neighborhood close to the metro meant that I could pull late nights as needed. After 2 years at my job, and two big promotions, my salary has increased by 35%. (And it was a decently-paying job to begin with.) No way that I would have snagged those promotions without working until 8:00pm during busy times to be the person who got the job done–well past the time that the last buses run in the neighborhoods out at the end of the metro lines.

Of course, if you’re in an industry where a masters degree or MBA is going to be required to really get anywhere, then there’s not much of a point in wasting a few years living hand-to-mouth at this point. (Go back to school now!) Same deal if you’re working for a nonprofit NGO where your salary is probably not going to go up much, regardless of how far you are promoted.

I’m nth-ing the suggestion to scale back on student loan repayments and retirement savings until you have a decent cushion in an emergency fund. (I’d define that as at least 3-4 months rent plus food, which sounds like about $5,000 for you.) There’s no describing how much anxiety it lifts to have a cushion like that. Even if you’re still barely making ends meet every month, it will feel different.

Good luck!