The transition from full-time student to full-time employee is challenging enough. There’s so much to think about- what are your benefits, how do you choose your health insurance plan, what is a 401(K) or pension, and most importantly, how do you become that standout employee? Compound that with residing New York City (which has an incredibly high cost of living) and working during an unstable economic environment. Pretty soon you can feel like being an adult is just too overwhelming. Though it might be nice to hide under the covers and hope it will all resolve itself, take this opportunity to explore and learn – especially when it comes to your career and your finances.

Many graduates find themselves in entry-level jobs with entry-level salaries. When your cost of living is high, this can create the kind of pressure that might distract you from really excelling in your field or even tempt to go for a higher-paying but less-fulfilling job. Therefore, the primary financial goal of any new graduate-turned-employee should be to live below your means. Part of living well involves having a reserve of money that is available in case of emergencies. That way when unexpected financial situations arise, you can still sleep soundly and be rest assured that you can make it out financially intact. It’s clear that the recession has taught our generation that you can never feel too confident about any investment decision (in stocks or with real estate) and that it is best to always have a backup. With that said, there’s no reason you shouldn’t be able to enjoy yourself and take advantage of living in New York or any major city.

Part of doing so requires creating a monthly budget based on your current stream of income. Create categories for both absolute necessities and discretionary spending or you can decide to clump discretionary spending into one category. Bear in mind your list of absolute may differ from someone else’s, which is completely appropriate. The whole point is to have a plan that works for you. My budget includes the following categories:

  • Savings
  • Rent
  • Utilities
  • Transportation
  • Groceries (includes food and household items)
  • Clothing
  • Gym
  • Entertainment (eating out, movies, Netflix, etc…)
  • Retirement (Example: Roth IRA) and/or pay off loans

I’ve also included a summary under each category of what I learned while residing in New York City, in order to ensure that I met both my budget and my ability to live comfortably. Though I live in New York, a lot of the things I outline below are applicable wherever you live.


Money that is not a part of your monthly budget should be directly transferred to a high-yield savings account. Ideally, this should be an automatic transfer that takes place immediately after your paycheck is deposited, as a means to avoid the temptation to spend the money. This will become your reserve money for emergencies or long-term financial goals. Be sure to choose an account with no fees, no minimums, and few restrictions to allow for easy maintenance. You shouldn’t devote your valuable time or energy to keeping track of these types of numbers.

On the topic of loans, I believe that if you have any outstanding loans, make it a priority to place that as a separate category on your budget and contribute a fixed amount of money every month to paying it off. It may seem overwhelming, but paying off a little at a time is the first step. The more you can contribute to paying off the loan, the better. If you can only contribute the minimum each month, so be it.


Beyond doubt, the most expensive expense you’ll have in New York City is rent. Luckily, the city offers a bountiful supply of options. The general rule-of-thumb is that you pay for your location. If you feel more comfortable in a more central or pricier location, you might have to compromise by either choosing a bare bones apartment or living with several roommates. Research the area that you choose to reside in, always take safety into account, and thoroughly investigate your apartment (and your roommates) before signing the lease. Finally, make sure that it is an apartment that you can afford, while living comfortably.


For utilities, generally speaking, the more roommates you have, the cheaper your monthly utility bill will be per person. This is because for utilities, such as internet and cable television, you pay a flat monthly rate. Electricity tends to become the biggest utility expense every month. You want to have candid discussions with your apartment about this. For instance, have a roommate agreement to turn off lights or leave chargers unplugged when not in use. In addition, bear in mind that summer months will be more expensive than any other season due to air conditioners and fans being in use. Also, sign up for direct payment or e*bill payments with your utility companies to ensure that you won’t pay another late fee again.


Luckily, transportation costs are incredibly predictable compared to other expensive cities where public transportation is neither accessible nor reliable. If you live in the city, pay for the unlimited monthly metro card for $89. It’s worth it. Also, take advantage of any programs your company offers regarding transportation (for instance, subtracting transportation costs prior to tax calculations known as TransitChek).


It’s incredibly important to research the grocery stores in your area. Your grocery costs completely depend on your dietary habits. The more restrictive your preferences, the more expensive your monthly costs will be. Some good options in the city are: Trader Joe’s (for organic), Met Foods (for food staples, such as rice and pasta), and Fairway (for produce, fruits, and some brand name products). Rite Aid and CVS offer tons of deals for household needs, including soaps and toothpaste. You can check their respective websites for their weekly deals. Checking the website once a week ensures that you won’t have to pay full-price for necessary household products. Finally, if you’re not picky, fruit stands on street corners and in Chinatown offer terrific deals on produce.


New York City consistently has an abundance of clothing store deals. Browse the web for sample sales and store deals. Thrift stores can also be a great bargain. Generally, the best times to garner the best deals are after the season. For instance, buy summer clothes at the beginning of fall or winter clothes at the beginning of spring.


Gyms are expensive in the city. Central Park and Hudson River Park are always good and cheap options for running and biking. However, if you decide that a gym is necessary, know that it is cheaper to sign-up during promotional events (generally in the spring and fall) and to pay for only one location. In addition, if you are able to pay for a whole year at once, you should receive a significant discount. However, be very cautious when choosing this option and really weigh whether the discount is worth the lack of flexibility because refunds will not be granted.


The city offers an abundance of entertainment options. There is an incredible assortment of free events, especially during the summer at Bryant Park and Central Park. The Skint website is a website that lists the free and cheap entertainment events around the city, and is updated on a daily basis. Likewise with restaurants, there is an incredible assortment of delicious food at reasonable prices-a little bit of research can go a long way.


Finally, I personally believe planning for retirement is incredibly important and it’s a well-known fact that starting early will reward you later on. If your company does not offer a retirement package, look into opening up a Roth IRA account. If your company matches your 401(K) to a certain percentage, take advantage and contribute up to that percentage. The maximum annual contribution for those under the age of 50 is $5,000 and unlike a 401(K), it offers qualified withdrawals, such as the option of a one-time $10,000 maximum withdrawal for first-time home buyers. You can contribute to both a 401(K) and a Roth IRA up to a certain income limit.

Living in New York City is incredibly expensive. However, by knowing your budget, cutting down on impulse spending, and choosing your expenditures carefully, you can definitely manage to live in the city comfortably.

Creative Commons License photo credit: Yoav Lerman


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