If you’re living in New York City then with housing, food and transportation costs in addition to taxes, you may be feeling as if it can be difficult to make ends meet, let alone save any money for your golden years!
Preaching to the choir, we know!
As an aside, if you’re buying property or refinancing a mortgage in NYC (or elsewhere in New York State) there are ways for you to save money on the title insurance portion of the closing costs that are described in the article at this link.
It is no secret that New York City is expensive. A fly trap for tourists, expensive shops line the streets of the most densely populated city in the United States. With roughly eight million residents, finding a place to live in New York City can be difficult. What becomes even more difficult, however, is paying for that place to live, as well as everything else that comes with living in the city. So what is the actual cost of living in New York City?
New York City has some of the least affordable housing in the United States. Affordable housing is defined by the US Census as “a rent-to-income ratio of 30 percent or lower.” While city rent-to-income ratios tend to be higher across the board, New York City’s median asking rent was estimated to equate to roughly 65% of residents’ median income. But what do those rent prices look like in dollar amounts?
While rent depends on the type of space and the area, monthly rent for a furnished living space can be anywhere from $2,000 to $3,664. This, of course, is just for rent, and does not include utilities, cable, and internet. A month of utilities can cost anywhere from $124 to $185 on average, with internet and cable costs adding an additional $53 at least. This depends mostly on your internet/cable company and your plan.
Altogether, housing costs can be anywhere from $2,177 to $3,902. This is just for basic housing, utilities, and internet, and excludes regular costs of laundry or select appliances. Bear in mind that these prices – and many others in this article – can be lower or higher depending on the area of the city you choose to live in.
Food in New York is a different matter. You can drop hundreds of dollars on a fancy meal or fifty cents on a slice of pizza in the distance of one block. But essential groceries will always be essential, so it is best to know the average price for essential grocery items. The average price for one liter of whole fat milk is $1.07. A dozen eggs averages at $4.53. Two pounds of apples average at $3.79, while two pounds of potatoes average at $1.92. Although up to 39% more than the national average per trip, standard grocery prices appear reasonable, and are very easy to accommodate into your budget according to your needs.
Transportation in New York City also depends heavily on your lifestyle. If you have your own car in the city, you have to worry about parking, gas, and car insurance, among other things. The average cost of auto insurance in the city is a whopping $4,093, according to autoinsurance.com. Additionally, parking can cost anywhere from $430 to $533 a month, and a quarter gallon of gas is roughly $0.69. This means having a vehicle in the city can be around $771 a month, with one tank of gas on a small car costing around $33.
If you do not have your own car in the city, you’ve saved yourself money, but not as much as you think. While the cheapest options are always walking or riding a bike, they are not always the most practical options. An unlimited monthly pass for the subway costs $116.50. A regular ride costs $2.75. For the monthly pass to be worth it, you have to take at least 43 subway rides in the course of a single month. Taxis are no cheaper. On a business day at standard fare, a five mile taxi ride costs about $15. If you need to travel any significant distance in the city, be prepared for it to cost money.
Taxes are another big, unavoidable drain on finances, and they come in several different forms. Property taxes can range from 10% to 17% depending on the year. This rate tends to be higher than most other places in the country.
Income tax is a whole different animal. While tax rates depend on income level and filing status, they average anywhere from 2.907% to 3.648%. Additionally, New York City has separate personal income and state income taxes, which can be difficult to juggle.
Finally, sales tax – both state and local – is 8.875%. This is only slightly higher than the nationwide sales tax of 8.45%. An important item to note, however, is that items such as cigarettes can have a higher tax rate. Cigarettes are taxed $4.35 per pack in New York State, with an additional city-based supplemental tax of $1.50 per pack, meaning cigarettes in the city are taxed at $5.85, one of the highest in the country.
A $50,000 yearly salary, minus minimum monthly expenses for rent, utilities, basic internet, and a monthly metro pass as listed above, also taking into consideration income and property tax minimums, leaves you with $1,534 per month to spend on food, clothes, and entertainment. This means you would be spending $31,588 per year just to live in and get around New York City. This amount excludes any you would put aside in savings or have taken out of your paycheck for items such as retirement. Bear in mind that this amount also demonstrates a bare minimum average for a small studio in a normal portion of Manhattan, including average tax rates that are not necessarily representative of what you may personally experience. While the cost of living is high, life in New York City can be doable.
(Article reposted with the approval of the SavingAdvice.com website)
- Who is your underwriter?
- What is the claims experience of your title insurance provider?
- Do you know whether the non-title insurance premium fees you are paying are fair and reasonable?