We all have regrets — money regrets, that is. But, like all mistakes, we wouldn't be who — or where — we are today without them. In our "Money Fails" series, real people share how they bounced back from financial slip-ups, and what they learned along the way.
Here, LearnVest editor Christine Aebischer shares how spending too much of her income on her first New York City apartment took a toll on her finances and well-being.
I can still remember the drizzly April day when I received that phone call every job hunter dreams about: I got the job! This news was doubly sweet because not only had I landed a gig I really wanted, but it also allowed me to finally move out of my parents’ house.
So after promptly putting in my two weeks’ notice, my next order of business was apartment hunting. (OK, maybe I had a celebratory drink or two in between.) The new job was in New York City and I was currently living in central New Jersey. I knew what that commute looked like (we’re talking five hours each day) — and I knew I didn’t want to do it for long — but I had no idea what the alternative would cost me.
A Rude Rental Awakening
While my new job came with a decent pay bump, I was by no means rolling in the dough. I knew I’d need a roommate or two to offset the cost, and I was hoping to avoid the dreaded broker’s fee that could add 15% to my yearly total. But I had one non-negotiable: I had to live in Manhattan. Not Brooklyn, not Queens, not Hoboken or Jersey City but the "concrete jungle where dreams are made of."
One problem: NYC rent is seriously expensive. I’d long heard that you shouldn’t spend more than 30% of your income on housing costs, so after crunching the numbers I found that I could afford $1,000 a month. Yeah, I had a good laugh about it too, but more of the bitter kind, with tears involved. (For those less familiar with the NYC rental market, that’s basically impossible, even with roommates.)
Then I started my new job (and that awful commute) and my desperation grew exponentially, along with my sleep deprivation. So I did that thing you’re not supposed to do and loosened my budget. To be fair, I had been funnelling the majority of my income into savings for the past year for this very purpose, but when I finally signed a lease to sublet a room in a four-bedroom Upper West Side apartment for $1,450 a month — more than half my monthly take-home pay — I couldn’t drown out that voice in my head that said, “What have you done?”
In Over My Head
And the voice didn’t go away. Even after I moved in and should have been able to enjoy my new Manhattan life, I was plagued by money stress. Because it wasn’t just my rent that had gone up — everything is more expensive in the city.
Simple trips to the grocery store sent me into a panic, where one misread sign once landed me with a $12 bag of grapes. And when I cut my foot open coming out of the subway one morning, I burst into tears — not from the pain, but from the thought of the impending urgent care bill. And savings? Yeah, that wasn’t happening.
A Second Move
I went on like this for about five months before realizing I couldn’t keep it up. Luckily, my lease was month to month, and shortly after I renewed my apartment search, a friend said she had an open room in her apartment. It was in Hoboken, New Jersey, just across the Hudson River, but rent was $950 a month — a number that fit perfectly in my budget.
So after six months in Manhattan I made the move back to Jersey, where my commute to work is actually shorter and there’s no sales tax on clothes, thank you very much. But most importantly, I’m financially comfortable. I’m adding to my savings again and I can spend money on things I enjoy too.
I thought living in NYC would be this fantastic, glamorous experience, signaling that I had “made it.” But in reality, I spent most of my time on the subway, stressing about my dwindling bank account and still feeling jealous of everyone who actually had the money to do all the things I wanted to do. Now, I actually get to experience more of those awesome city perks, because my money isn’t all earmarked for rent. I may not have that Manhattan zip code, but those digits mean nothing compared to the ones in my rising savings account.