Moved to Manhattan to Make More, Save More, and Speed Up FI

Everyone’s path to financial independence is different. One of the big differences is where people choose to live while on their journey. I have seen blog comments and articles about how it is impossible to save any money while living in Manhattan, or how much harder it is to reach financial independence in a big city with the associated high cost of living. So instead of just telling people that it has benefited me financially and sped up my path to financial independence, I figured I’d be more transparent about how it has helped me specifically. There are always pros and cons to any situation, but it seems that the pros have been making their presence known more than the cons since I made the move to Manhattan.

Below I’ll explain how it has directly affected my personal income statement:

Income: Now this one is very dependent on personal situations, industries, performance, economy, career trajectory, employer, etc. My employer gave me a 12% raise for the move along with a one-time bonus. The also paid for all moving costs. These benefits made the move very affordable, and in actuality instantly increased my income and net worth. The move and job switch has also given me other opportunities to increase my pay, which I would not of specifically had if I remained in my other role in a smaller city. Over the course of an 18 month period my income increased a total of approximately 50% from my previous income before the move.

Own downside is that NYC also charges you another ~3.5% on your income for the honor of living here, in addition to New York state income tax.

Housing: My rent has increased approximately 90% or $600. I previously rented a three bedroom house in New England, and now rent a somewhat small Manhattan apartment within walking distance to work, and share it with two roommates. My roommates are my friends, and although I’d like my own place from time to time, I enjoy living with them for the most part, and would rather lower my cost of living with roommates than rent my own place. (Increase of ~$600 or $7,200 per annum)

Utilities: Have gone from about $300 a month to $100 a month. It costs a lot of money to heat a three bedroom house. It costs a lot less money to heat an small apartment, especially when heat and hot water are included in rent. (Savings of ~$200 per month or $2,400 per annum)

Transportation: Has gone from $400 a month to $50. I owned a car before the move, which was fully paid off. Including insurance, property tax, maintenance, and gas, it easily cost me about $400 a month. Right now I walk to work and for most of my errands. I take the subway from time to time at $2.75 a ride. If I want to visit the family or friends I take the commuter rail or Amtrak to their vicinity, and then usually someone is nice enough to swing by the train station to get me. (Savings of ~$350 per month or $4,200 per annum)

I sold my car for $6,500 when I moved to Manhattan. My savings ignores the fact that I had this money tied up in a depreciating asset. I used these proceeds to pay down student loans.

Another saving I didn’t include above comes from the fact that I have three huge airports within my reach where I can shop for killer personal flight deals, and never really have to worry about layovers since I can fly direct almost anywhere. This is a big plus for me since I fly a decent amount for personal travel.

Groceries: Food in the city costs more, and if you shop at the local grocery store prices are probably 25 to 50% higher than what I was used to. But then I found a hidden gem when it comes to grocery shopping in Manhattan – Trader Joe’s. TJ’s has been a life saver. For those who know TJ’s know they eliminate the middle man, and go straight to the source (i.e. farmers, producers, etc.). Therefore their prices are much better than the local corner grocery store. (Increase of $100 per month or $1,200 per annum)

Eating out / Restaurants: This expense can literally eat you alive in the city. In my new role between fancy work dinners for the hell of it, travel work dinners, counseling lunches, late work nights, work drinks, etc., I get my fare share of fancy restaurant food in Manhattan and around the US. This definitely helps curb my appetite to go out and drop my own cash on a fancy dinner. Therefore there has been no incremental costs for me, so I’ll call it a wash (when in reality this has actually been a savings for me since I used to go out more than I’d like to admit to my wonderful readers).

Gym: My only requirement for a gym is decent hours and a squat rack. When I first got to NYC I found an independent gym, within walking distance to my apartment, which was actually cheaper than my gym previous to the move (due to my negotiations). They have become more popular so now the price is pretty similar to what I paid before the move. Avoid the fancy box gyms, which include laundry service and hotel amenities, and gym memberships are pretty reasonable in the city. (No increase or savings)

Clothes, toiletries, home goods, etc.: I buy all this stuff on Amazon, minus clothing. Therefore this is a wash for me and doesn’t really matter where I live since I purchase online.

For those keeping track, my expenses have conservatively increased by approximately $150 per month or $1,800 per year. My cost of living adjustment alone when I first moved here outweighed this cost increase, along with covering the added NYC income tax. Therefore every raise and bonus thereafter has been icing on the cake, and padding on the investment accounts.

Now as a reminder, this is my personal experience moving to Manhattan for work. Others may have lifestyle creep, a job that doesn’t give them a COL adjustment, a family of their own which would cost more for housing, etc.

Now living in Manhattan hasn’t been all peaches and cream, and of course there are some negatives for me. For me personally not having a car to be able to hop in and visit friends and family on a whim, not having a yard, and the increased cost of living have been a pain at one time or another.

Have you sped up your path to FI by making a physical move? Would you give NYC a shot if it sped up your path to FI? Feel free to ask any questions if you’re thinking about a move.

50 thoughts on “Moved to Manhattan to Make More, Save More, and Speed Up FI

  1. Brian @DebtDiscipline

    We’ve never made a move. We three children in school it’s tough to uproot them. Once they are out of high school we may downside or consider moving to reduce cost. I would have no problem living in NYC, I’m just not sure it would reduce cost for us.
    Brian @DebtDiscipline recently posted…Credit Report Check UpMy Profile

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    1. Fervent Finance Post author

      Being a single person and having a family of five are totally different ballgames in the big city.

      Reply
    1. Fervent Finance Post author

      Agreed it’s definitely doable for a single person or a couple, but then when you start adding in kids, I bet it becomes uneconomical real fast.

      Reply
  2. TheMoneyMine

    Hi FF – You did a great job leveraging the qualities of NYC and using them to speed up your journey to FI. I can see however how the exponential increase of temptations could be difficult to resist.
    A friend just moved there and even though his pay is much higher than before, his costs have increased even more.
    I’m sure it takes practice and the right mindset.
    TheMoneyMine recently posted…The All-You-Can-Eat MortgageMy Profile

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    1. Fervent Finance Post author

      By no means was it easy to keep my costs down. Resisting temptation is not easy for all, and some like spending more than others. Luckily I’ve embraced being frugal in the city.

      Reply
  3. Alyssa @ GenerationYRA

    Very interesting breakdown! In my mind, a move to Manhattan would definitely make yearly living expenses soar. It’s nice to see how your expenses have fluctuated in one way or another, ultimately leading you to faster FI with a very slight increase. Of course all moves have variations (job, transportation, etc.), but with the way you have handled the pros & cons it seems to be working out in your favor – great work!
    Alyssa @ GenerationYRA recently posted…Generation YRA: A Year In ReviewMy Profile

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    1. Fervent Finance Post author

      Yeah definitely wouldn’t be this beneficial to everyone. I lucked out with decently cheap housing within walking distance from work. This is my biggest money saver for sure. Plus selling the car.

      Reply
  4. Josh

    We are on the opposite side of the spectrum for geography, moved to East TN, but same basic principle. We are building a house, greatly helps there is a builder in the family so our mortgage is a lot lower. But it allows us to reach our FI goal in maybe another 15 years tops, I will be age 45.
    Josh recently posted…Average Cost of A Baby For The First YearMy Profile

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    1. Fervent Finance Post author

      Believe me, if I was able to find a remote work job – I’d be hightailing it to a low COL area instantly! I’ll have to check out your blog to learn more about the move to TN!

      Reply
  5. Our Next Life

    This breakdown is so helpful, and should counter all the arguments about it being impossible to save in the city, even the notoriously expensive NYC. We find it much easier to save now that we’ve left the city, but that’s only because we were susceptible to temptation. It sounds like you do a great job looking the other way when temptations are in front of you, which is the biggest key of all. That and keeping housing costs low, which you do by having roommates. And in our case, as much as we’re glad that we moved out of the city, we know that our situation is not exactly replicable. We couldn’t just *get* jobs as senior vice presidents with consulting firms living where we live — we had to bring those jobs with us from the city. But we’re sure glad we have the set-up we have!
    Our Next Life recently posted…Why Married Early Retirees Should See Our Marriages As Our Most Important InvestmentsMy Profile

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    1. Fervent Finance Post author

      You guys have done exactly what I will try to do in the future: build a career in NYC and then make a NYC income in a lower COL area. Wish me luck! 🙂

      Reply
  6. Abigail @ipickuppennies

    Our finances improved greatly when we moved to Phoenix. It was so much less expensive than Seattle. We had a dingy, one-bedroom apartment for $700 a month up there. That paid for a two-bedroom down here. And during the downturn, prices were so cheap that we pay less than that in mortgage. (As long as you don’t think about the painful maintenance expenses that come with homeownership.)

    Granted, I was also able to get a job when we moved down here — and it had nothing to do with our physical location. So that helped immensely. Still, things were a lot easier once we moved.
    Abigail @ipickuppennies recently posted…Dear healthy people, I’m not going to my reunionMy Profile

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    1. Fervent Finance Post author

      Wow didn’t know how low COL Phoenix was. Looks like the move benefited you greatly! Take care.

      Reply
    1. Fervent Finance Post author

      Those recruiters are like vultures! I wouldn’t move anywhere if I were you, since your new house is so awesome!

      Reply
  7. Team CF

    Wow, that is much less of an expense increase than we thought at the beginning of the article. Well done you! Good luck on your path to FI. Seems you have it well under control.

    The last time we moved it was to be closer to family and friends. We had thought that it was going to be a setback for our FI plans (higher cost of living, higher taxes, lower paying jobs, etc.). But as it turns out, the impact was less than we assumed. The main thing was the company car, public transit passes (paid by the company) and salaries that were on par with our previous. All in all, it was a good move that made us happy and did not set us back too much.
    Team CF recently posted…How much do you need to become financially independent in the Netherlands?My Profile

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    1. Fervent Finance Post author

      Hi Team CF. I definitely think at some point in the future I’ll move to be a little closer to friends and family too. It’s great that it didn’t impact your FI plans too greatly.

      Reply
  8. Gen Y Finance Guy

    Sounds like it has been a great move for you.

    It’s funny because we took the opposite approach and moved out of the “city.” We were living in Newport Beach in the infamous Orange County where there are much higher jobs, and housing is crazy more expensive.

    Typically, making the move we made an hour inland would have required a pay cut. But the trade off is substantially lower living expenses. We bought a house that was 4 X the size and half the money of anything we could have bought in the OC.

    My wife was already commuting to work in the area.

    And even though I had accepted a pay cut as a possibility. I actually was able to secure a job about 5 minutes from our new house and get a 17% pay raise. Little did I know I would double my income over the next 18 months.

    That’s cool that you get your fix on going out on the company’s dime. That would be a huge risk for us living in the city, because we just love going out so damn much.

    Great post!
    Gen Y Finance Guy recently posted…Freedom Fighter Interview #17 – Selina @ Financial BuddhaMy Profile

    Reply
    1. Fervent Finance Post author

      It’s great that the move worked out so much in your favor. I guess I am lucky that I get my fancy dinner fix on the company’s dime. I’m hoping eventually I can take my NYC salary and work remotely from a low COL area.

      Reply
  9. Andrew@LivingRichCheaply

    I love posts about saving money while living in NYC. It doesn’t have to be as expensive as most people make it out to be. As for having a car…there is an option of Zipcar which I’ve never tried but seems like it might be worth it if you really miss having a car. And groceries…Aldi’s has great prices as well as ethnic supermarkets (for fruits/produce/meat) though I’m not sure those are conveniently located for you. I think living in NYC actually slows down my FI date, but I was born and raised here…and all my family/friends are here so I have no plans of leaving. And hoping to “retire” in NYC can be difficult too. I think I’ve asked before…but I forget…where do you plan to go after FI? Big city, suburbia, lower cost area, small town? Back home to MA? Nomadic lifestyle traveling the world?
    Andrew@LivingRichCheaply recently posted…Life, Liberty and the Pursuit of Financial FreedomMy Profile

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    1. Fervent Finance Post author

      I was hoping my fellow city dweller would see this. I don’t have an Aldi’s near me I don’t think, but TJ’s is not far and where I usually try to go.

      As for FI life, there will be many stages most likely. A globe trotting stage. A RV US/Canada trotting stage. A settle down in a low COL phase. Who knows how long each will last or in what order, but I’m flexible!

      Reply
    1. Fervent Finance Post author

      Thanks Steve! I know the type – they’re everywhere. Order delivery or go out for every meal and “need” a big apartment in the trendy neighborhoods. Can you say lifestyle inflation or laziness?

      Reply
  10. Debtless in Texas

    I had a blast in Manhattan when visiting family out there, but they have since moved to New Rochelle to get away from Manhattan prices. That is awesome that they gave you a raise and paid for the move, it seems like a no-brainer.

    We made the move from Orange County (coincidentally Gen Y Finance Guy was there too) to Texas and have been able to increase salaries dramatically with a substantially lower cost of living and no state income tax. Austin is a bit more expensive than most Texas towns, but there is a lot of tech and high paying jobs here. It was totally worth it, I am sure your move will end up the same way. Congrats!
    Debtless in Texas recently posted…Managing a WindfallMy Profile

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    1. Fervent Finance Post author

      I’m not a city-boy at heart so I’ll be making a move out eventually. Hopefully I can keep the higher salary and lower my COL. Glad the move has worked out so great for you!

      Reply
  11. Vawt

    That is pretty impressive for a move to NY. I have been to the big city 3 times and still remember being shocked at how expensive even McDonald’s was!

    Amazon is definitely a godo way to aovid huge mark-ups on personal goods.

    I think another thing you could highlight is all of the free entertainment that can be had in a big city. There is always something to do (especially if you like people watching).
    Vawt recently posted…Amazon Prime- AgainMy Profile

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    1. Fervent Finance Post author

      True story with the free entertainment. One of my favorite activities is walking through Central Park and the Hudson River walkway.

      Reply
  12. Red to Riches

    FF,

    I grew up in a town with a few thousand people and now live in a city with about 80,000 (midwest). I had an internship in Manhattan during summer during college and had the time of my life. I also went broke because I already had no money and my internship just barely covered my rent.

    One thing I noticed while being there was that I was more motivated. Everything was bigger and better than I was used to and I enjoyed being able to walk to things most people vacation to.

    At the same time, full-time jobs where I interned paid about the same as my midwestern town and the midwest comes with much lower expenses especially when you live near work.

    Definitely an interesting article that you don’t see very often. If financial freedom is the hero in our story, Manhattan is essentially the villian in most articles :).

    Looking back on my time there, I definitely can see the opportunity to save (especially living in Jersey City/Hoboken and getting Manhattan wages in particular industries). Glad to see you are making it work for yourself!
    Red to Riches recently posted…October 2015 Net Worth UpdateMy Profile

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    1. Fervent Finance Post author

      Wow that’s awesome that you were able to make a “NYC salary” in your midwestern town. People think you can save money by living in Hoboken and Jersey City, but the issue is you’re tacking on a long commute and you have to pay for that commute which can add up. Thanks for stopping by.

      Reply
      1. Red to Riches

        Yeah I wouldn’t consider it a top tier NYC salary, but it was as much as the 2-4 year experienced coworkers made and much more of a work life balance.

        If I remember right my unlimited pass was $90 per month for NJ to Manhattan system? I remember I had to take two different rail systems to my employer which definitely added up as you mentioned.
        Red to Riches recently posted…October 2015 Net Worth UpdateMy Profile

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        1. Fervent Finance Post author

          It’s definitely over $100 a month now, plus the time commitment. But I’m not 100% sure as my mode of transportation is my feet 🙂

          Reply
  13. Jenna L at Hello Suckers

    It seems you’ve definitely made the right choice when you take all of that into consideration. Once I graduate, my partner and I will be making a move closer to a city (for both of our work and to save money as we currently live in quite a well-off part of the country) but it won’t quite be as far as Manhattan as we’re over in the UK. Nevertheless, you’ve given me some good ideas about what financials to consider when we make the move and I’ll be interested to note what we save and where!
    Jenna L at Hello Suckers recently posted…Dividend Investing For Wealth PreservationMy Profile

    Reply
    1. Fervent Finance Post author

      Good luck with your move, and good job being proactive ahead of the move. Thanks for stopping by.

      Reply
    1. Fervent Finance Post author

      The main deterrent to families living in NYC is definitely the high real estate costs (to rent and own).

      Reply
  14. KR

    I live in Manhattan and am reading through these comments. There are many people who live here on modest means, including my dog walker, who shared that she’s saved 500k. Another friend, a retiree on a very small income, was able to buy into an income-restricted complex for 30k total (she owns her apartment as co-op shares but can never sell it at a profit). She and another friend who own in an HDFC (income restricted) keep urging me to buy into an HDFC. They keep raving about how high the income cap is at 70k, never imagining that I make a lot more. If they think 70k is a princely income, I imagine they’re living on about 35k give or take. Yet they seem happy and have very full lives here. The retiree takes dance and painting lessons. There’s tons of free activities, you can walk everywhere, you don’t need to own a car. So NYC isn’t as expensive as everyone says!

    Personally, I’ve considered, if I want to stay in NYC, keeping at my high salary job until they kick me out, and then living off a small portion of my savings, showing very little income, and then being eligible for income restricted housing. I don’t think I’m the first genius to have ever figured this out.

    When I first came here I rented in the West Village and was never able to save because of the ever-increasing rent. Then I moved way up north to Harlem, just a few years ahead of the rest of the masses looking for cheaper rent. Living in a less desirable neighborhood is one way to maximize your savings.

    And for the person who mentioned Zipcar, it’s too expensive. Just like if you want cheaper rent you move out of the center, if you want a cheap car in this town you take the bus or ride your bike across the George Washington Bridge to the Enterprise in New Jersey. $18 a day vs. $75.+ in town. 🙂

    Reply
    1. Fervent Finance Post author

      Wow very interesting KR. I’ve never researched low income housing options because I know I’d never qualify. Renting a car in the city is SO EXPENSIVE. I did it once and learned my lesson. I know take the train to other cities to rent if I have to and save a ton of money. Thanks for stopping by.

      Reply

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