"I Love My Life—But I Can't Afford It"
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It's a tale as old as Carrie Bradshaw: A woman moves to New York, falls in love with the nightlife, the restaurants, and the excitement—and blows through her savings trying to keep up with fast-paced city living. Money that should go into a savings account gets spent on brunch, because if you skip a social outing in the city that never sleeps, you're definitely missing out. Here's one woman's story.
Expert: Stefanie O'Connell. She suggests checking out The Skint for free and cheap things to do in New York City. Read about how having a roommate in NYC can save you money in this article from Curbed, and about why you should start investing in your 20s in this article from CNBC. For more information on today's episode, visit glamour.com/money.
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Talking about
Speakers
(2)
Samantha Barry
Stefanie O'Connell
Transcript
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Break
Samantha Barry
00:14
She Makes Money Moves is a production of
Glamour
and IHeart Radio
.Share
00:23
And that was a really big moment for me, realizing that I was one serious emergency away from being completely broke.
Share
Samantha Barry
00:36
I'm
Samantha Barry
, the editor in chief of Glamour
and this is She Makes Money Moves.Share
00:47
Today's guest isn't the first woman to move to
New York city
, fall in love with the nightlife, the restaurants and the excitement, and blow through her savings trying to keep up with the fast-paced city living. She'll pay for brunch with money that should have gone into her savings and she has a full-time job, but she needs a side hustle to help fund her social life. This is her story.Share
01:13
My name is Julia Sullivan, I am 29 years old, I live in
New York city
. I am an editor, a writer and a part-time spin instructor.Share
Samantha Barry
01:24
At 24, Julia was perfectly happy living in
Arizona
. She was making $60,000 a year as an editor at a marketing agency. The rent on her apartment was $700 a month including utilities. And after paying her bills and her day-to-day expenses, she was able to put $500 a month in her savings account.Share
01:46
She had a job that paid well, a serious boyfriend and money in the ban. But when her boss asked her to relocate to
New York city
for a year, she couldn't say no to the opportunity.Share
01:58
The thought of moving to
New York
, which I think is very true for a lot of people that come across these types of opportunities, is you just absolutely have to do it, you have to take that plunge. My then boyfriend, we were on the fast track to getting engaged. He knew that this was a once in a lifetime opportunity and I had to take this chance.Share
02:24
So the deal was that I would move back at the end of the year having this amazing 365-day experience in
New York
and then, in a way, getting that out of my system, getting the whole working girl New York
thing out and then coming back and resuming what we considered life.Share
Samantha Barry
02:43
So with her cat and $16,000 in savings, Julia said goodbye to the comfortable life that she knew and landed in an unfamiliar city where she had exactly zero friends. That city welcomed her with a quintessential
New York
real estate transaction: she handed several thousand in cash to a shifty broker to secure an apartment.Share
03:05
The first major financial assault that I had was putting down the money for my first apartment. So, I think all being said and done, I put in about $6000 cash right up front, and that includes the broker's fee. Because of course being a new New Yorker wide eyed, I had a broker that definitely could sense that.
Share
03:29
So he asked for cash under the table, and he asked for it in such a hurried way. I was like, "This doesn't feel right", but at the same time like, this is what new yorkers do. They just, they find an apartment and they go for it. They don't even consider that they might be doing something illegal, and he definitely was.
Share
Samantha Barry
03:48
Julia and her cat had an apartment. She had a job, life seemed manageable. She knew before she got to
New York
that it would be expensive, so she had asked her company for a significant raise, but they only gave her a small salary bump.Share
04:03
Not enough to cover the difference in her rent which jumped by $1,000 from $700 a month to just over $1,700. And her
New York
apartment didn't include utilities. Her rent wasn't the only thing that was much, much more expensive.Share
04:20
I noticed right away the cost of food was very, very high and the cost of drinks, it sent a shiver down my spine. I think the first dinner out that we had, my share must have been over $150 for what seemed like just tapas and a couple of glasses of wine. In
Arizona
, that price would have been under $50. It was insane.Share
Samantha Barry
04:47
Also insane? The size of apartments in
New York city
. A recent search on Craigslist
showed seven studio apartments, all-around 400 square feet, with rents up to $3,300. So what does that mean?Share
05:02
The people who live in those ridiculously small apartments, often the newest new yorkers who are just so happy to be in the city, those people aren't entertaining at home. They make friends with other transplants or their coworkers over expensive drinks and even more expensive dinners, which is exactly what Julia did.
Share
05:23
My first group of friends were naturally my coworkers, and you spent a lot of time talking at work, but to further that the first instinct is always "let's go get drinks". And I think I would initiate those types of get-togethers more often than not because I didn't want to just go home at night and sit in my apartment and feel lonely, facetime my boyfriend.
Share
05:54
I continued to try to further the night by suggesting, "Oh, how about another round of drinks on me?", and automatically, at least from my perspective, one that means I'm I have one more hour of feeling social and then maybe they like me a little bit more, maybe by offering these gestures this means that they're going to want to go out with me again. And they did, we had lots and lots of fun Tuesday night drinking sessions with my coworkers.
Share
Samantha Barry
06:28
More on She Makes Money Moves right after this quick break.
Share
Break
Samantha Barry
06:57
I'm
Samantha Barry
, welcome back to She Makes Money Moves.Share
07:01
After months of unrestrained fun nights out, Julia realized that her social life was killing her savings account. Initially she had spent with abandon, thinking she'd returned to her reasonably priced life in
Arizona
when the year she promised her company was up. But as the one year Mark approached, Julia also realized that she didn't want to leave New York
, which had brought so many opportunities.Share
07:26
She and her boyfriend had broken up and she was single in the city. She got a raise at work and published her first freelance article. She loved her new life and she didn't want to change any of it, including her spending, which she knew was excessive. So Julia continued to splurge on drinks and dinners and trips to the beach. But when her cat got sick, the $3,000 vet bill was a wake up call.
Share
07:53
I love my pet dearly, I would have paid three times that, but that could have been me. I could have had a single ambulance trip that would have been, say, $1,000 more than I would have paid for my cat's vet bill. And that was a really big moment for me, realizing that I was one serious emergency away from being completely broke.
Share
Samantha Barry
08:22
So Julia wrote a list of ways she could save money. She could skip the most expensive nights out, she could cook meals, which she used to do when she lived in
Arizona,
instead of ordering out. She could consider getting a new apartment with a roommate.Share
08:38
Actually, let me think about this for a second. I don't think I would ever consider getting a roommate. I'm 29 years old and I know it's common for people my age, but I had so many bad roommate experiences growing up that the thought of doing that at almost 30 years old truly terrifies me.
Share
Samantha Barry
09:06
She did start earning extra money with more freelance writing assignments and by becoming a part-time spin instructor, but she's getting fewer writing assignments lately and an injury has sidelined her from spinning.
Share
09:20
She also hasn't been very successful at saving. When she comes home from work, she's never in the mood to cook when ordering takeaway is so much faster. And on nights she manages to pass on a concert with a $70 ticket, she'll stay at home and have dinner and a bottle of wine delivered, which winds up costing two-thirds as much as the concert ticket.
Share
09:43
To heat up another bowl of ramen or cook Campbell soup just seems like the most depressing option.
Share
Samantha Barry
09:53
Julia also can't seem to quit her expensive workouts. She says that in addition to her $70 a month gym membership, she'll spend $100 a week on boutique rowing or spinning classes.
Share
10:07
I spend a lot of money on workout classes. Actually, an obscene amount. And I always reason with myself when I make these types of purchases that I'm doing something good for my body and I'm making a healthy choice. And that also seems like a better alternative than going out for drinks, that this is something I can do that's healthy.
Share
Samantha Barry
10:35
Because all of her friendships in
New York
were built on the foundation of big nights out, Julia is not sure how to engage those friends without the buffer of dinner and drinks or a concert.Share
10:47
Without that buffer, I'm afraid that I might be seen as not someone worthwhile to hang out with. I always have this thought that everyone in
New York
has such a limited amount of time and energy, and that's true for everyone. So for me to suggest a meet-up that costs absolutely nothing, that isn't cool or trendy or fun or delicious, feels as though I would get an automatic no, that just having a conversation with me wouldn't be enough.Share
Samantha Barry
11:29
She seems so insecure about the status of her newest friendships that she's nervous to ask them to spend a low key night in.
Share
11:38
Making friends has been difficult. I've been here about 3.5 years and I can still count all my friends on one hand. So I haven't really made an effort to suggest meeting up at the park just to talk. But I'm afraid to.
Share
Samantha Barry
12:03
Julia knows she needs to curb her spending. She's hoping to figure out how to do that and how to go home at the end of the day without worrying about all the fun that's happening without her.
Share
12:16
I just need to understand how I can be fulfilled coming home at night, not getting drinks with someone, not ordering seamless and not drinking a bottle of wine. And just being okay and being content with that simplicity.
Share
Samantha Barry
12:46
When she was in her 20's, today's expert also struggled to pay rent and had to check her bank account before signing up for exercise classes. But she took control of her finances, and in the 10 years since she's become a nationally recognized financial expert.
Share
Stefanie O'Connell
13:04
Hi, I'm Stefanie O'Connell. I'm the author of The Broke and Beautiful Life, and I write about all things of women, worth and money.
Share
Samantha Barry
13:12
Stefanie, Julia fell in love with
New York city
and she doesn't want to miss a second of the excitement or a single night out. It's easy to have that FOMO or fear of missing out when there's always a million things happening. What are we going to do with her?Share
Stefanie O'Connell
13:28
So, I was looking through Julia's average monthly expenses and the thing that really stood out to me was her rent cost. It's over $1700 without utilities, so that's a pretty enormous amount of her income. So I would say, and she talked about this a little bit, is thinking about getting a roommate.
Share
Samantha Barry
13:48
She does not want this, so I think, that really stood out as well. She's not in the business for roommates. Do you think you can convince her otherwise?
Share
Stefanie O'Connell
13:55
I hope so. I know she's coming from
Arizona
and a lot of this is about what our narratives are about what we think adulting looks like.Share
Samantha Barry
14:03
There's plenty of people in their 30s and 40s in
New York
with roomates.Share
Stefanie O'Connell
14:05
Exactly. And I think, you know, when I tell people that in other places they're like, "What do you mean you have roommates and you're 30 years old?", I'm like, what do you think I mean? You know, it saves me half of my housing costs that I can then spend to travel.
Share
14:19
So yeah, is that trade-off worth it to me? Absolutely. And I think that this is something for her to think about, is what is a reduction in her housing costs going to afford her in her lifestyle?
Share
Samantha Barry
14:31
Right. Her rent could go down significantly and she'd get to split the internet, Netflix and utility bills. So her monthly total expense might decrease by up to 30%, plus there's a chance her new roommates could become her new friends. The type she could enjoy a night in with. What else Stefanie?
Share
Stefanie O'Connell
14:49
I gotta start cooking. You know, there is a happy medium, right? I understand if you're coming home from work at the end of the day, you're exhausted, you don't want to think about going to the grocery store, what you're going to cook.
Share
15:01
Can she try something like a meal delivery service where they give you all of the ingredients, they give you the recipe, they proportion, everything out for you, and then she just follows the instructions, 20 minutes later she has a meal?
Share
Samantha Barry
15:12
And that's gonna work out way better than takeaways every night.
Share
Stefanie O'Connell
15:15
Exactly. And it's not that it's the most cost-effective thing, but it's something in between. There's usually. you know, she's existing on two ends of the spectrum here. Like I either cook everything at home, like rice and beans, or I am going out or getting seamless every night, and there's something in between.
Share
15:31
And so, can she find something that works for her there? And make maybe cooking something she looks forward to, can it be a social activity? Can it be something where she watches her favorite show while she cooks?
Share
Samantha Barry
15:41
She could order a meal kit and have a friend bring wine and they could make a night of it.
Share
Stefanie O'Connell
15:45
I love it.
Share
Samantha Barry
15:46
So, Julia only has a handful of friends in the city and those friendships revolve around going out and spending money. She's worried that those friends won't want to meet up with her for a walk in the park. Listen, a walk in the park can be boring, let's be honest. So what can she suggest that's fun and cool and free?
Share
Stefanie O'Connell
16:04
So, one of the richest resources is your parks and recreation website. So the
New York
city parks website, their event calendar is jam-packed with free yoga classes, free concerts, you know, free nature walks. Also the library website.Share
Samantha Barry
16:22
Love the library website, so much.
Share
Stefanie O'Connell
16:23
New York public library, right? It's not just about the books. They have programming classes, events every single day and in every location. So there's there'sinfinite activities that you can be part of.
Share
16:35
Also, you know, surprising places like the Apple store. You know, they will have free programming or you know, your local lululemon might have like a free yoga class. You just have to be, you know, engaging with those places online, researching, googling.
Share
16:49
I also, in
New York
specifically, love this website called theskint. com, every day they send me a little newsletter of free and cheap activities happening around the city. And so theskint. com, yeah, there's just no shortage of like free days at museums, pay what you wish exhibitions. So in this city in particular there's no excuse.Share
Samantha Barry
17:12
More on She Makes Money Moves right after this quick break.
Share
17:18
I'm
Samantha Barry
welcome back to She Makes Money Moves.Share
17:22
Another moment that struck me in Julia's story was when she said "I was one serious emergency away from being completely broke". She's debt-free, which is great, but she doesn't have a
401K
for retirement savings, she doesn't have a fallback fund. Can you explain to listeners what a fallback fund or an emergency fund is?Share
Stefanie O'Connell
17:44
An emergency fund is money you have set aside in a dedicated savings account specifically for emergencies. This can be around 3 to 6 months worth of living expenses, stored out with at least $1000 in that account, and make sure it's in a savings account, so that's something that's accessible when you need it. If you lose your job, if you need to get out of a bad relationship, if you have a medical incident and any other unforeseen emergency.
Share
Samantha Barry
18:11
It's so important, but lots of 20-somethings aren't actively planning for the future. How can we get Julia there?
Share
Stefanie O'Connell
18:19
It's really tough to think long-term when you've been scraping by in short-term mode for so long. And I think that's the trap that we need to really break free of. Even if we are living paycheck to paycheck, even if we are paying down debt, simply getting into the habit of saving money and investing, even if it's as little as $5 a month, is so important because it bills that skill set of long-term thinking.
Share
Samantha Barry
18:45
She needs to start thinking about what her goals might be in 10 years' time, when she's 39. What does she have to do right now to get there?
Share
Stefanie O'Connell
18:54
She probably has an idea of what she might want her life to look like. It might be a house, it might be having a kid. And then start breaking down whatever is in that future that she has hopes for and start putting a price tag on that future.
Share
19:09
Here's how much I actually need to afford all of these goals, and if I'm going to actually make that happen and not settle for anything less, I need to get started today. And that'll bring urgency to the longer-term thinking.
Share
19:23
And it's also so important that she makes those things really personal and really connected to her value system rather than what she thinks she should be doing. Because I think that's one of the reasons where it's really easy to defer some of these action steps because somebody said that I should own a home, but I maybe don't really care about owning a home. But I'm guessing there's probably something else in her future that she does need to be saving for.
Share
19:46
And I also recommend making them visual. I have a picture of, you know, that that trip I want to take next year in my wallet wrapped around my cash and my credit cards. Every time I go to pull out that cash or that credit card, I am looking at that picture of what it is I want for my future, and then I can make an assessment of is this short term trade off worthwhile or is it not?
Share
Samantha Barry
20:12
Lots of people are careless with money in their 20's. I know I was. Retirement is decades off and spending $100 at happy hour tonight probably feels more worthwhile than putting it into an account that you can't touch for 40 years. But waiting to invest until your 30s could literally cost you hundreds of thousands of dollars. Check the article in the show notes for the math.
Share
20:36
Retirement, decide if you're having dinner delivered every night, you're not saving for your immediate future either. To change your spending habits, start thinking about what you'd like to say for. And, like Stefanie said, put a price tag on it. Maybe write down your goal on a post-it and stick it to your mirror.
Share
20:54
Having that constant reminder might make you think twice before spending carelessly. Do you want Thai takeaway for dinner tonight or a trip to
Thailand
in a year? I know what I'd choose..Share
Break
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