What Does It Take to Make It in the Big City? 3 New Yorkers Bare Their Budgets

Leah Gervais, 25, a non-profit executive coordinator in Manhattan "I love working for a non-profit, but making my salary stretch in Manhattan isn't easy. I live with two friends and pay $1,450 in rent, or about 45 percent of my salary. I know that ideally, housing shouldn't eat up more than a third of your take-home pay, but I'm a homebody, so I'm willing to pay the price. I divvy up the rest of my money between flexible spending (food, entertainment, etc.), student loans and savings. I automate my savings , usually socking away 15 percent every month. Paying myself first is what's gotten my emergency fund up to about three months' worth of expenses. I'm also on track to pay off my student loans , a $700 monthly bill, way ahead of schedule, thanks to refinancing and expedited payments. Otherwise, I'm debt-free. I'm all about side gigs , bringing in an extra $100 to $1,000 monthly from a mix of blogging , writing and freelance web design work. I put 75 percent toward my loans and keep the rest for fun money, which covers the occasional shopping splurge, seeing a Broadway show or enjoying a rooftop cocktail overlooking the city. As for retirement, I contribute to a 401(k) and Roth IRA . I don't max them out now, but plan to once I eliminate my biggest student loan. I'm definitely frugal, but certainly not unhappy! I may not take lots of vacations or go out every night, but I'm living in the best city in the world with a 9-to-5 I care about. I wouldn't trade that for anything, even a six-figure salary." Expert insights: "I'm impressed with Leah's financial know-how! It's great that she's aggressively paying down her student loan balance while simultaneously saving. So many people make the mistake of just doing one or the other. Aside from paying off debt and maxing out her retirement funds, what are her other big-picture goals? Does she want to travel? Save up for homeownership? It's okay if she doesn't know yet, but she can set herself up for success by upping her investing game in the meantime. She's only 25, so if she opens a regular brokerage account now, the magic of compound interest will grow her wealth big time—and help her check off some medium-term goals —over the following decades.” Click the arrows below to keep reading. Darron Cardosa, 50, a part-time furniture salesperson, waiter and blogger in Queens "My annual income flows from a patchwork of gigs adding up to about $55,000, which actually makes me the breadwinner of my household. My husband Mark works as a Broadway dresser, and together we bring home around $85,000. We own our one-bedroom apartment in Queens, where our monthly mortgage and maintenance fees run about $1,600. Becoming homeowners was a huge milestone we hit in 2004 after a decade of saving for a 20 percent ($30,000) down payment. We spend a little more time commuting, but it's a long-term investment. Aside from our mortgage, we are debt-free. We also have a solid emergency fund, which holds enough to cover a few months of expenses, and I funnel about $200 each month to a 401(k) I have through my part-time job. Mark has a retirement fund as well, but we honestly aren’t sure we’re on track for retirement. The truth is that we look at our apartment as our safety net—when it comes time to retire, we'll probably sell it and move to a cheaper city. Since eating out adds up quickly in New York, we try our best to go grocery shopping, look for deals and cook at home. When we do go out, we hit up places with happy hour specials . If we want to see a Broadway performance, we look for shows offering discounted tickets. When a new movie comes out, we opt for cheaper matinees and skip the concessions. We've also been known to spend our days off playing Scrabble in Central Park. There are so many ways to live frugally while still enjoying the city." Expert insights: "I love Darron's budget-friendly approach to food and entertainment. Factor in their emergency fund and I'd say they're doing a lot right. The one thing I’d like to know more about is their retirement plan because relying on their apartment as a nest egg is risky. What if the market turns when they're looking to sell? Darron's only 15 to 20 years out from retirement, so now is the time to make more of a concrete plan, instead of just socking money away blindly. I'd first suggest tallying up their annual expenses to learn how much they’re actually spending, which should give them a target savings number needed for one year of retirement. If they want a concrete first goal, they could estimate what they think their apartment will sell for and starting working toward saving up that much now.” Click the arrows below to keep reading. Aly Walansky, 36, a freelance writer and editor in Brooklyn "My income fluctuates since I'm a freelancer, but after taxes , I'm bringing home about $3,000 per month, which works out to about $50,000 above the line. I've traded living in the heart of the city for Brooklyn, where my rent is considerably cheaper. I currently pay $1,375 for a small studio—and can still be in Manhattan in 20 minutes. I divide my pay between rent and bills; whatever's left over goes to food and entertainment. I really want to build up my nest egg—my Roth IRA has about $8,000—but it's tough. My emergency fund is pretty much nonexistent, too. I know I could save more easily if I moved out of New York altogether, but my family and some work obligations are here. One way I curb my spending is by batch-cooking. On Sundays, I usually whip out my slow cooker and prepare huge portions that I freeze for future meals. This saves me a ton of money, especially after a long day when I'd otherwise be really tempted to order takeout. I also go to budget-friendly bars and restaurants and opt for public transportation over cabs and Ubers. Making an average income stretch in New York really comes down to compromises, but I consider them small sacrifices to live in the greatest city in the world." Expert insights: "It's great that Aly curbs her food spending so well, but I’d really encourage her to focus on her emergency fund. If she’s hit with a slow work month or other pop-up expense , how will she handle it? She’d debt-free now, but most people without a safety net would have to rely on credit in that case. The idea of going from zero to three months' worth of expenses is really intimidating, so I say start small. If she can build up just $1,000 and make that her floor, she'll be much better equipped. Hitting that milestone will also stoke her motivation to keep going; it's all about baby steps. This all comes down to prioritizing saving. If Aly finds this challenging, I'd recommend tracking her income and spending to get a clearer idea of her inflow and outflow of money. This is the foundation of creating a budget that works . Also, since her income fluctuates, doing a yearly cash-flow projection can be a game changer because it'll reveal the big-picture peaks and valleys of her income. This way she can plan ahead for slower months."