When I moved to Manhattan after college, I scored my own apartment–and my own bills. But I quickly realized that between clubbing with friends and eating out, life in the city took every dime that I made.
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My career as an advertising writer for a global agency was going well, so moving to a more affordable city was unthinkable.
Then, around the age of 30, I stumbled across a book about managing your personal finances at work–and suddenly my outlook changed.
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I read about how high interest rates on credit cards sidelined people–especially women, who made around 77 cents to every dollar that a man earned. As a woman, I knew that I had to start being smarter about my money.
I was making around $85,000, and paying my bills, but I wasn’t saving nearly enough to achieve my goal of one day owning a home. So I decided that if I wanted to make an adult life in New York City, I had to get my finances in order.
Even though I’d spent years spending indiscriminately, I began changing my behavior in six key ways over the next few years–and it made all the difference.
1. I Stopped Believing in the Rental Fairy Godmother
For the first ten years of my working life, I thrived on stories of other New Yorkers who’d snagged great, big apartments for super low rents. I checked out listings, and tapped friends, as I clung to the fantasy of fulfilling this dream for myself.
However, I had a back-up plan: Once married, I’d gain both a husband and a wonderful place to live.
But with age comes clarity. At 34, I found myself single again after a one-year relationship derailed, and I had to accept two facts. First, real estate luck probably wouldn’t come my way. Second, I wanted a home–not a pit stop.
No more delayed gratification!
So I stopped taking taxis. I halted the mani-pedis. I dined in restaurants less, and cooked at home more. And I grabbed every freelance assignment that came my way, saving the funds for a down payment on a condo.
Rather than search in a trendy neighborhood, I scouted up-and-coming areas, with safety in mind. I bought an 850-square-foot, one-bedroom condo for $129,000. Eight years later, I sold it at more than double my investment, and then used the profit as a down payment for a larger home, where I still live today. My mortgage payment for a two-bedroom condo is now less than my former monthly commitment for a one-bedroom rental.
2. I Stopped Thinking of Work As, Well, Work
Once I let go of the idea that working after hours was a no-no, my writing flourished. And so did my bank account. After years of working, experience had increased my speed, so I could manage my day job, work extra hours–and still maintain a social life.
I plan to stay in the working game at least until I’m 70. (Fortunately, writing is a sit-down gig.) While the national age to qualify for social security benefits remains 65, the Social Security website says that, by delaying retirement benefits until age 70, I can actually receive more money.
Now I regard the national standard for retirement as a suggestion, instead of a mandate, especially when I take into account what my mother’s physician informed her as she approached that golden age: “Most people start to rust once they retire.”
RELATED: Why Retirement Is Harder for Women
3. I Made Travel a Social Experiment
Before 35, nice hotels were my norm. But nice hotels are pricey. Then I heard about a house-swapping site, Homelink, through friends at an Italian language school. After reviewing the site, and paying a small fee, I registered, and then swapped my Manhattan apartment with a couple from Lisbon, Portugal. The only glitch in our weeklong deal was one broken wine glass. They left me money to replace it.
When I was younger, I wanted to spend money on luxury, but as I got older, I realized that what I wanted was experiences, to be a citizen of the world. From then on when I traveled, I stayed with friends or in modest hotels. As my network of friends increased, I never renewed my Homelink account. I didn’t need to.
There are inherent risks associated with swapping homes, but I believe most swappers are great guests for one simple reason: They, too, have left their homes in the care of strangers. Everyone takes the same risk.
With airfares steadily marching upward, along with airline fees, swapping homes makes travel more affordable. The best part is that I feel less like a tourist–and more like a long-lost relative returning home.
4. I Turned to Cash
I favor cash for small purchases, and rely on a low-tech budgeting method: A few times a week, I pull money from my wallet and my pockets, and toss the bills into a box at home reserved for Broadway theater tickets, dinners out and whatever else sounds fun. Paying cash for twice-a-month entertainment luxuries doubles my pleasure because once the experience is over, I don’t have a credit card statement lingering as a nasty reminder.
In my 20s, I charged my way through dinners and cocktails, and paid the extra transaction fees. Now I avoid them by paying cash. My last theater outing was secured with a staggering amount of singles … fortunately, the cashier was good-natured about the transaction.
5. I Prioritized My 401(k) Match
I contributed modest amounts to my retirement account in my 20s, but after two layoffs, I began to think of my 401(k) as an asset that I could take with me to any job.
Now I go for the full matching amount. With contributions coming out of pre-tax dollars, in a sense, I don’t miss the funds because they never appear in my bank account. After a little over two years at my current company, my 401(k) account–much to my surprise–is more than $20,000. And the combined funds from my former jobs have surpassed six figures.
6. I Became a Bag Lady
For years, I’d read about the savings that came with bringing your lunch to work, but I rarely did this myself. I wasn’t a brown bag snob–I just loved the freedom of midday gastronomic possibilities. Manhattan is a foodie paradise.
Then I adopted a kid. (Let’s hear it for the over-40, first-time mom!) Two months later, after my maternity leave ended and I returned to work, I discovered my priorities had shifted. Brown bagging ensured that I made it out of the office on time–working through more of my lunch hour meant that I could leave earlier.
A few months into single mommyhood, I sat down and did the math: I spent $8-$10 a day to buy lunch, five days a week … that was about $2,500. Wow.