Right after I graduated college, I landed an internship in New York City, debt free. But there's a cost to this opportunity: living full-time in the city on an intern's salary.
Considering New York is one of the most expensive cities to live in, being financially independent isn't an easy task, especially after you pay for rent, a MetroCard, and a brunch or two. Honestly, it's almost impossible to live without support or a second job unless you consciously plan ahead. Miraculously, I've pulled it off.
I have to preface by acknowledging I'm privileged to have graduated college debt-free. I'm forever indebted to my parents for giving me the opportunity of not having student loans burden my already tight budget.
Here's how I spend — and save — on my intern salary in New York, which comes out to more than $10 an hour, but less than $15.
I record fixed expenses for months in advance, so I know how much money I actually have to spend.
Before I go into the month, I budget my expenses for the month on this spreadsheet. I deviated from the original a bit but it still lets me visualize how much I can spend on food, entertainment, and shopping, after I pay for necessities.
When you do the math for how much income you're making with a full-time internship, the numbers can be disillusioning. For example, if I make $15 an hour, I should make $2,400 a month, right? Wrong. After factoring in taxes, that hourly salary drops to about $11.25 an hour, or around $1,780 per month. (You have to remember that New York City also has a city tax!). You'll have to wait for your first pay statement to properly calculate your real per-hour salary, unfortunately.
I got lucky with a $1,000-a-month apartment in Brooklyn, which costs less than dorm housing. Even then, I still have to lock a certain amount of my paycheck to other fixed expenses each month, including transportation, internet, utilities, and my monthly Adobe Creative Cloud subscription. I'm still mooching off a friend's Netflix, so I save $20 from that.
For what money you have left to spend, separate it into categories and create maximum spending caps.
From budgeting, I know that for the entire month, I can only spend about a week of my paycheck. My biggest fear is overspending to the point where all I can afford to eat is instant ramen. To navigate my limited disposable income, I assign maximum spending amounts to each category. The parenthesis show how much I've budgeted per category, while the right column records up-to-date numbers of my spending.
This way there aren't any surprises near the end of the month — like how I will need to find a new apartment once my sublet ends. No stress.
Since I just moved in, I had to buy a lot of oils and spices for cooking, making my budget for groceries higher than I'd like. Zara sales are also, unfortunately, a thing, and I didn't have the willpower to walk away. So I'll compensate by limiting my eating out and bar budget. Prioritize!
Numbers are dizzying and terrifying, but you need to confront your spending with a reality check.
I track every penny I spend and hoard all my receipts.
I record everything I spend on the same Excel spreadsheet to keep myself in line with my budget. This habit has four benefits:
1. You see how quickly your expenses add up. Oftentimes, you're mindlessly swiping your card, so you don't see how much you're really spending until after the fact. Recording everything — even that pack of gum — will make you more aware of your habits. Trust me, keep all the receipts from your bar tabs and Uber rides, and you'll realize that going out in Manhattan will cost you around $15 if you limit yourself to one drink, which you probably won't.
2. You'll be more conscious of your purchases. You'll feel silly when you see you blew $15 on a Vitamin Water and measly sandwich that didn't even fill you up.
3. You begin cutting down your spending. When I see what I spend frivolously on, I actively avoid making the same purchase I'll regret later. See Vitamin Water example above.
4. You can identify your spending habits. Everyone spends money differently. Knowing where your money goes to will help you prioritize your money on certain things and cut back on others.
Avoid expensive grocery stores like the plague and moderate how much you buy.
I, too, will not spend $13 billion at Whole Foods or Dean & Deluca.
I also stay away from packaged, pre-washed vegetables, and opt for veggies sold at my local grocery store where I can get a bushel of kale for $1.
In addition to buying cheap, don't purchase anything perishable in bulk quantities. You run the risk of having your food spoil, and in turn, waste money. This is especially important if you live in a dorm with a communal kitchen. You'll be less incentivized to cook and more likely to let your neglected vegetables rot. You can always go back to the store. You can't revive moldy bread.
Aside from vegetables, buy grains like pasta (whole wheat is affordable), bread, and brown rice as bases for your meals because they work well with a lot of dishes and can be stored without going bad. You won't have to meal prep several days in advance (and you won't get sick of your lunches).
I cook almost every single meal, that includes brunch.
The minute you sit down at restaurant in New York you might as well rip $10 out of your wallet right then and there. Cooking my own meals usually is healthier than eating at a restaurant anyways because I can control the ingredients and portion sizes.
Every time I cook dinner, I prep my breakfast and lunch, so I don't "accidentally" forget to bring food to the office. I don't have to cook early in the morning before heading to the office and I save money. I also don't indulge in coffee or drugstore snacks ever, thanks to my daily home brew and free coffee at work.
That said, I don't completely isolate myself from the restaurant scene. It's an important part of socialization, so I splurge once in a while, but mainly at restaurants whose food I can't easily replicate.
I try to hand-wash all my clothes, except for sheets and jeans.
Laundromats near me charge $4.25 to just wash my clothes, and $0.25 per seven minutes to dry. Because of the cost, I dedicate Sundays to hand-washing clothes, especially delicates, to avoid paying the laundromat fees. I'll air dry the clothes on a drying rack or hangers in my room in front of a fan, so they'll dry by the following morning.
I can't get away with washing jeans and my bedding, sadly, so I have to suck it up to wash them every two weeks.
When it comes to activities, find cheaper alternatives.
I'll schedule meeting with friends according to my weekly budget because friendship often comes at the cost of meeting over food or drinks. Based on my budget, I allow myself one happy hour or dinner with friends per week, at most. I've even turned down invitations because a friend's dinner request didn't "fit into my budget." (If you're wondering, yes, I actually say that.)
This behavior sounds antisocial but those happy hour specials do add up. What I'll do instead is invite friends over for a home-made dinner and a glass of Two-Buck Chuck. I don't need to spend $15 I don't have on drinks, and drinking alcohol isn't a necessity to have fun.
The beauty of New York City is that you can make a day of free activities. Kick it back in the park with friends or learn to cook. Enjoying yourself shouldn't be contingent on the amount of money you spend.
Again, everyone has different priorities and spending habits. My frugality on some activities isn't the only way to go. As I mentioned before, I'm fortunate enough to not have a good portion of my already strained budget go towards paying back student loans. I acknowledge not everyone can afford to live in NYC, but this budgeting advice applies around the country.
Develop smart money habits now at a young age, not only when you have an internship. It's an essential life skill that may be tough for the time being, but developing financial insight now only has benefits.
SEE ALSO: I live in New York City on a $90,000 salary — here's what I spend in a week
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