We have had a few threads or posts about how people in NYC need huge salaries just to survive there, due to the high cost of living. People like me who have spent the entire life in backward places like AZ just couldn't understand it. However, I just ran across an article that sheds more light on this.
The subject of this Web article is a highly-educated married couple perhaps in their late 30s. With the husband having a doctorate from MIT, and the wife a dentist with her own practice, they make $400K/yr. Yet, they are scrambling to get by with their 3-yr old and a 9-mo old in a 800-sqft one bedroom apartment. This apartment, being on 5th Avenue, still has a price tag of $1M, and costs them 1/2 of the take-home salary. But more on this later.
Instead of going to the movies, they rent videos. Restaurants are reserved for once-a-quarter special occasions, rather than their monthly date nights. They now buy necessities at Wal-Mart and spend more time surfing the Web for sales than ever before.
Despite their income, Fou says he and his wife have little in savings and certainly not enough to support the family for any length of time should one of them lose a job. Nearly every dollar they earn is spoken for.
So, how do they spend their $400K yearly income? Here's what I got from the article
Gross = $400K
Taxes = $200K
Housing = $100K+
Child care = $40K+
Preschool = $15k
This leaves them with $45K for all other expenses -- medical, food, transportation, etc... -- which, even an ignoramus like myself knows, does not get them far in NYC.
Fou still plans to take the family on a winter vacation this year. He wants his son to get on his first pair of skis. But instead of flying to Colorado, they'll probably rent a car and drive up to Vermont for a long weekend. It's unlikely they will visit their families in Texas anytime soon, given the cost of airfares. So Fou purchased a webcam to ensure the grandparents can still see the kids regularly, albeit virtually.
So, why do they choose to live there? "We grew up in Dallas and Houston, respectively, and we just couldn't see ourselves living in the suburbs."
For a view of the 800-sqft $1M one-bedroom apartment for a family of 4, see video below.
See inside a 5th Avenue apartment - MSN Video
The full article is here.
Getting by on $400K
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