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The 40x is applied to gross(before taxes,etc) income.
I think it usually(always?) translates to 30% of your income.
In other words,a 1,500/mo apartment means you should have a 60,000/yr income or you shouldn't pay more than 30% of your income on rent so if gross income is 60,000 you shouldn't pay more than 18,000/yr or 1,500/mo.
I actually think the 40x or 30% rule is too liberal.My parents told me to never pay more than 25%.I think that is better because it relieves a little pressure and allows for some savings.Many NY'ers do pay almost 50% of their incomes on rent in order to live in Manhattan or other neighborhoods that they can't really afford to live in but most of them live hand to mouth,rely heavily on credit cards and save nothing.Not a good long term plan.
Cut back where you can to live where you want. Avoid taking cabs, do your own laundry, pack your own lunches, search for food/drink specials before choosing a restaurant, buy everything on sale. I make $52k and paid $1475 for rent and somehow made it work. It is possible.
You will absolutely need a roommate, NYC is a fantastic place to live but comes at a cost. Try finding a studio apartment instead of a 1 br if you don't want a roommate. Here's a local LES news source that may be able to help you find a great place to live...or help you get acquainted with the neighborhood once you move in.
I do not live in NYC yet, but have been looking into moving for some time. I have found that (1) $60,000 in NY is not the same as $60,000 in FL, (2) NY has state income tax and NYC has a city tax, (3) that $60,000 salary will look more like $40,000 after taxes, maybe less.
Location: Formerly NYC by week; ATL by weekend...now Rio bi annually and ATL bi annually
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Quote:
Originally Posted by TurtleCreek80
You only qualify for $1500 rent based on NYC landlord guideline of 40x monthly rent = salary.
And no, your budget does not look right at all. Here are some tips:
1. $1500 max for rent. Welcome to NYC- if you are single, you'll be living in a studio not a 1Br. If you want a better/bigger place, you need a roomate. Ask the director of your training class if other trainees are looking for a roomate- that's how I found my very first roomate. Or send an email to recent grads from your school to see if anyone has a friend of a friend. 90% of people in their 20's living in Manhattan have roomates.
2. No money budgeted for cabs or car rental. You will not use mass transit 100% of the time. Put at least $100 a month aside for cabs- it will go quickly.
3. No money budgeted for laundry ($30 if you do it yourself, $50 if you send out), dry cleaning ($75-100 if you are business casual, more if business formal), haircuts, toiletries (everything like toothpaste costs 1.5-2x more in Manhattan).....do you need a new work clothes wardrobe? It can cost a ton your first year even if you're shopping JCrew and Banana.
4. No gym membership- will you want one? $80 min.
5. No lunch money- or is that coming from your $60/week for groceries? I'd bump that to $400/mo.
6. $400 for "nightlife" will go fast if you plan on partying it up. Buy a drink for yourself and a cute girl and it's easily pushing $15-25 a round. $15 is two beers. A dinner date is easily $80-100++. Dinner delivery is $15-20. Splitting bottle service with your hard partying work friends-> $100, min.
My point is that NYC is incredibly fun, exciting, and incredibly expensive. $60k is the threshold for being able to enjoy life IF you can keep the fixed living expenses under control. I'd highly recommend finding the smallest/cheapest place you won't feel claustrrphobic in & lease it. You could easily pocket another $5-6k a year for more partying, travel, and life's unexpected expenses.
Very good advise as I am looking into the move myself. Very good...Thnx
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