Oct 21, 2024
In the hustle of New York City, where ambition is as high as the skyscrapers, the cost of living remains one of the highest in the country. For many young professionals, sharing an apartment has become more than a rite of passage. Instead, it can be a long-term strategy to afford living in such an expensive city.
Take Ishan Abeysekera, a 33-year-old structural engineer who moved to Crown Heights, Brooklyn with hopes of building new friendships while pursuing his career. Today, he shares a home with 23 other housemates, paying $2,100 a month in rent.
Advertisement
“When I say I have 23 housemates, people are like ‘Wow, what’s that like? That sounds wild,’” Abeysekera told CNBC Make It. “But actually, it’s quite nice.”
Yet, there are trade-offs. "Once, I had to wait 15 minutes for the shower,” Abeysekera admitted.
Living with strangers might seem extreme, but it’s often necessary. With the average rent for a one-bedroom apartment in New York sitting at $3,900 per month, you can easily wind up living paycheck to paycheck.
But, if communal living isn’t your style, here are 5 alternative ways to bring down your cost of living — without having to come home to 23 strangers.
Look at rent in cheaper neighborhoods
One of the most effective ways to lower your living costs is to rent in a more affordable neighborhood. Opting for a place with a bit more distance from the hustle can be key.
For example, as of July 2024 in New York City, a 704 square foot apartment in Little Italy averages $6,451 per month. But for a similar space in Washington Heights, you’ll pay around $2,612 per month — a huge difference for a change in location.
Advertisement
Even in Crown Heights, Brooklyn, where Abeysekera chose to live, rent for a one-bedroom apartment averages around $2,935. So if he preferred this living arrangement, he still potentially could have found a similar dorm-like accommodation in a slightly less expensive neighborhood.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Choose a co-living space with fewer roommates
Abeysekera may have found community with his 23 roommates, but not everyone is cut out for such a busy living space. For those who crave a little more peace, co-living with just two or three roommates can still ease the financial burden, offering the chance to meet new people without sacrificing personal space.
After all, there are plenty of online services dedicated to finding roommates in New York, and with no revolving door of people, it could be easier to make lasting connections.
Cut back on essential costs
Roommates can help lighten the load, but there’s always a way to trim spending a bit more. Essentials like gas, groceries, utilities and rent might seem set in stone, but small tweaks — like cutting back on takeout or trading the Uber for a subway ride — can add up over time.
And let’s not forget about insurance. Whether it’s renters insurance or car insurance, shopping around for a better rate could give you savings you didn’t know were there, leaving you with more cash to enjoy the city without feeling like you’re overpaying on the essentials.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Make your money work for you
Cutting back on the basics can free up some extra cash, but there’s also ways to make your money do some of the heavy lifting for you. Investing even a little spare change into a diversified portfolio that includes ETFs could turn those small contributions into something bigger over time.
Then there’s your savings accounts. Swapping a traditional savings account, with an average return of 0.45%, for a high-yield option offering up to 5%, can make all the difference. Making this simple switch can help turn your savings from passive to proactive, helping you build a cushion for your future.
Budgeting for big city living
In a city as expensive as New York, budgeting is an essential part of financial survival. By taking a closer look at your monthly expenses, you can make smarter financial decisions and pinpoint where savings can be made. Creating a monthly spending limit may sound like a constraint but it’s a strategy that allows you to put aside a little extra each month towards your future goals.
Those small sacrifices can lead to bigger rewards, like planning a getaway, building an emergency fund or enjoying the peace of mind that comes with financial stability. If you need help creating a monthly budget that fits your lifestyle, a financial advisor can offer valuable guidance to help you get started.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Victoria Vesovski is a Toronto-based staff reporter at Moneywise covering personal finance, lifestyle and trending news. She holds degrees from the University of Toronto and New York University, and her work has appeared on platforms including Yahoo Finance, MSN Money and Apple News.
