How we are (more than) making it in a HCOL

View from my previous apartment in Williamsburg, Brooklyn, NY on Christmas Eve[/caption] It’s definitely easier to attain financial independence (FI) faster when you live in a LCOL (low cost of living) with a high income.  Is it out the window when you live in a HCOL (high cost of living) – like Brooklyn, NYC (where I live) or the San Francisco Bay Area? Of course not. But some thing(s) need to give if you want to reach it in a reasonable amount of time. So, how are we able to put away > $80,000 a year towards FI, pay down loans aggressively, be able to afford child care in this expensive city AND still be able to enjoy life? 1. We keep housing costs as low as possible This is probably the largest ticket item for those of us in a HCOL. A modern (meaning it includes a dishwasher and laundry in-unit) 2 bedroom apartment in a great part of Brooklyn will be a minimum of $4,000 for likely < 1,000 sq. ft. Manhattan? Try $5,000 and likely much more for any decent neighborhood. What about buying? Try $1 mill for a tiny 1 bedroom (again, if you’re lucky) and upwards to $2 million+ for a 2+ bedroom apartment. That doesn’t include the monthly maintenance fee. Want a parking spot? Extra.

“If you will live like no one else, later you can live like no one else.” – Dave Ramsey

I am not a huge fan of Dave Ramsey, but his basic mantras will serve most people very well.  M and I live in a tiny apartment (730 sq ft). M owns this apartment and luckily bought in the early 2000s for a whopping down payment of < $20,000. No, there isn’t a missing zero. It is a true two bedroom, one bathroom apartment. We have a dishwasher and our own laundry – which in NYC is a luxury. With the upcoming baby (and our bonus son that we have sporadically during the school year), many have told us that we have to upgrade. Nope. My brother and I attended high school living in a similar apartment (sharing a room). This won’t be “forever” but we are doing our best to stay here until my student loans are paid off by end of 2020 or earlier. We will finish paying off M’s car loan (I drive to work) in the next month or so leaving just the mortgage on his end. We street park (free). Our total housing costs (mortgage + taxes + condo fee) is ~5% of our 2017 annual gross income.

2. We chose a financially like-minded partner 

Aka choose your spouse wisely. OK, so we didn’t exactly do this on purpose, but sorta (at least on my end)? About 1-2 months into dating M, I asked him about his finances. Specifically, I asked him how much money he had in his retirement accounts and what debt(s) he had. I also knew that he wasn’t a big spender. As things became more serious we discussed our shared financial goals for the present and future. We did this before we got engaged.

2. We make savings automatic

My 403(b) and 457(b), and his 403(b) contributions are automatically deducted from our paychecks. We never see the money. Since these are all pre-tax contributions, we don’t really miss it vs. not doing this automatically and seeing if “we can afford to save.” We do our best to fund the Roth IRAs early in the year so we don’t miss it and are not tempted to spend the money instead.

3. We (mostly) stick to a budget

I use YNAB to budget. I haven’t added M’s expenses yet but I am able to track our overall spending in eMoney (web based software we use with our FA). I’ve been using YNAB for over 2 years now. I was a spendaholic and this is my rehab.

4. We don’t buy (much) stuff

We aren’t minimalists, but we both agreed that stuff does not make us happy. We also don’t have room for the stuff anyway (see above).

5.  We have decided on the 1-2 things we really enjoy and don’t hesitate to spend on it

Luckily, we both really enjoy eating out & cooking good food and traveling. Sure, we could nix all vacations and eat rice and beans until loans are paid off  but it’s important to enjoy life now too. We do try to meal plan for the week and we generally bring lunch to work. We budget for all of this.

[caption id="attachment_1137" align="aligncenter" width="402"] Lots of wristbands to get into Panorama 2016[/caption]

Another thing we both really enjoy is attending live concerts of our favorite bands (mainly indie pop/rock/some electronic). Luckily, NYC is almost always a stop on anyone’s tour. Not to mention home of some of the big summer festivals. Confession: I have not paid for a single concert since M & I met. One of the big perks of M’s job is free (and VIP) access to almost any concert we want to go to. We attended Panorama last summer. In the past several months, we have seen the Shins, the xx, Sigur Ros, Frightened Rabbit, M83, Tame Impala, Sia, the 1975s, Mumford and Sons, and Flume to name a few.

Bottom line – we live well below our means.

How are you making it in a HCOL? Comment below.


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  1. notadoc on June 6, 2017 at 5:31 pm

    An advantage to the eating out/traveling thing is that if things get really tight money wise, they are easy to cut back on. Plus only you and your SO have to know you’re cutting back. Can’t say the same thing about mortgages or driving an expensive car.

    • on June 7, 2017 at 6:52 am

      Good point!

  2. Physician on FIRE on June 8, 2017 at 10:24 pm

    Good for you guys! I’m super jealous of the free concerts — that’s the stuff I listen to, as well. Also a bit jealous of the incredible real estate investment M made some 15 years ago.


    • on June 10, 2017 at 10:09 am

      Well, if you ever make it to NYC during the summer, M will hook you up (he runs Central Park’s Summer Stage)!

  3. […] I preach Geographic Arbitrage, but it doesn’t work for everyone. How is Miss Bonnie MD getting ahead in New York City? How We Are (More Than) Making It in a HCOL. […]

  4. Biglaw Investor on June 11, 2017 at 6:31 am

    Whoah, you have laundry in your apartment? What is that #fancy life like? Housing expenses are pretty much the anchor that sinks most people financially in NYC. We are down to spending 9.7% of our gross income on housing (and that’s without laundry, if it wasn’t clear). Good for you guys!

    • on June 11, 2017 at 8:11 am

      Laundry really is a luxury in NYC 🙂

  5. Passive Income M.D. on June 13, 2017 at 10:58 pm

    We’re trying to do the same on the West Coast so I understand the struggle, although it seems like you have it well under control. Nice work! Keeping housing costs down is the big challenge and we feel fortunate to have bought 5 years ago. It’s definitely not a bargain by any means but we wouldn’t trade it for anything at this time.

  6. Xyz from OurFinancialPath on July 3, 2017 at 9:32 pm

    the city can offer so much, just need to do your research. Thanks for sharing.

  7. Johanna Fox Turner on July 4, 2017 at 8:15 am

    Love the statement “I was a spendaholic, this is my rehab” – insightful! Might steal that one, heh heh

  8. The Luxe Strategist on July 10, 2017 at 6:02 pm

    I passed through your neighborhood this weekend. My SO and I went to Anella in Greenpoint, and it was spendy, but delicious.

    I follow the same points as you–basically, focus on the big wins and get rent down as low as possible. I’ve refused to pay a broker’s fee just out of principle. Whenever I got a raise, I’d just continue living the same lifestyle.

    How lucky you own a place! I’m sure with how built up Williamsburg is now the value of your apt has skyrocketed.

    I also take the subway to Trader Joe’s for groceries instead of our local bodega, when we can. Sometimes we stop to get ingredients from Chinatown on the way home from work. Otherwise, we try to minimize eating out, or if we do, we go for happy hours.

    I refuse to install Uber or Lyft on my phone so I don’t get tempted to used them.

    I feel like we recently got a big win. Our landlord moved away and now he’s let us use the washer/dryer in the basement AND have storage space. He used to hoard all those amenities for himself. So, looking forward to saving money on laundry bills (we used to do drop off).

    • Miss Bonnie MD on July 10, 2017 at 7:44 pm

      I used to live in the burgh. I’m in Boerum Hill now. We wish we bought and lived in the burgh!

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