The energetic bustle of city life combined with the eclectic culture make New York City an amazing place to live. But with all the perks of living in the city, comes a downfall — the high cost of living.
The number one expense for most NYC residents is rent, which is why many people look to buy a New York City apartment so that they can put their money toward owning property.
Purchasing an apartment can be a long and complex process, compounded with generally a hefty price tag. After all, the median cost of an apartment in some parts of the city is generally over one million dollars. While this doesn’t mean that the apartment you want to buy needs to be that much, it is important to consider when calculating the most expensive part of the home buying process, your down payment.
It is recommended that you put at least 20 percent down on your apartment. A high down payment means lower mortgage payments and higher equity, meaning you will be closer to fully owning your property than if you had opted for a lower down payment.
However, this also means that you will have to save up longer, as a 20 percent down payment in New York City can range from $150,000 to $300,000. On top of that, don’t forget that closing costs will be around two to six percent.
Despite this, a higher down payment is a better long-term decision. Read on for some ways to save up for your down payment, so that you can make your dream of buying an apartment in NYC a reality!
Developing a budget is an important step when it comes to saving money. Understanding what your biggest expenses are and how much of your income they are taking up will help you figure out where you can cut back and save.
To start budgeting, look into creating a basic spreadsheet that tracks your expenses and income. This is the step where it’s very important to be honest with yourself. Are you spending money on unnecessary expenses that could be put towards saving for a down payment? Once you see where you’re spending most of your money, you’ll see where you can afford to cut back.
While looking for an apartment, also remember to stick to a housing budget. By understanding what homes you can and cannot afford, you’ll avoid the long-term stress of being buried in debt. When you know what’s in your price range, it makes homeownership go from a liability to an asset!
Minimize Unnecessary Purchases
Once you have figured out where you need to cut back, start figuring out ways to follow through. Remember to put your spending into perspective. What are you spending on and why? If you’re consistently out shopping and spending money on wants and not needs, take a step back and wait before you make purchases.
Studies show that the anticipation of a purchase delivers more dopamine to the brain than making the purchase itself. Consider giving yourself a few days between wanting a product and making a purchase. The feeling will generally subside, and you will have saved the money you would have otherwise spent!
Have Fun, But Still Save
Socialization can also be a major expense. If you’re an extrovert, going to bars and clubs on weekends can run your expenses up dramatically, due to entrance fees and expensive drinks.
If you can find clubs with no entrance fees, that’s a huge bonus. If not, consider reserving tickets in advance for that sweet early-bird discount. Some clubs also offer group discounts, so get a group of friends together and plan your night ahead of time so you can save money!
Save on Transportation
Transportation can be one of your biggest expenses while living in New York City. While most people living in the city don’t have any car payments to worry about, the cost of the subways and other forms of public transportation can add up.
If your job’s location requires you to take the subway or a bus, consider investing in a monthly, or even yearly unlimited pass for public transportation. While these passes are still expensive, they could be saving you money depending on how many times a month you use public transportation. The MTA offers several cost-saving MetroCard options such as:
- 30-Day Unlimited: $127
- 7-Day Unlimited: $33
- Pay-Per-Ride: Available in $5.50, $11.00, $22.00, $27.50, $41.75, and $67.50 denominations
If your job is a bit closer to home, consider skipping out on public transportation as much as possible. Walking to work is not only great exercise, it is also entirely free, and can get you to work efficiently.
If your job isn’t within walking distance but is still closeby, consider Citi Bike. If you do choose any of these options, remember to leave a little earlier for work so you aren’t late!
Find Deals on Food
While food expenses are inevitable, there are ways to cut back on them and save money in the long run. One great way to do this is to buy groceries in bulk.
While doing this, remember to only buy the basics, such as bread, meat, and vegetables; as opposed to higher-cost pre-made foods such as frozen dinners. There are plenty of delicious meals that you can make with basic ingredients to save tons.
Sometimes, due to a work schedule or just a busy daily routine, eating out is inevitable. However, that doesn’t mean you need to break the bank! There are a lot of amazing cheap food locations in NYC that you can find, and just because they’re low-cost, that doesn’t make them any less delicious.
Let Your Savings Grow
It might also be a good idea to sign up for an online bank that has automatic savings features. Certain online banks have the option to automatically move extra change or certain proportions of paychecks directly into a savings account.
By automating your savings, you can guarantee that you’re maintaining control over your finances and not overspending needlessly. You would be surprised by how much you find in your savings account by the end of the year!