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Click here to get $75 off your tickets to Cindy's upcoming money course!

In this video, Test Lab host Cindy tries living on the average NYC budget for a month, and shows everything she budgets for and spends!

Whether through attempting a no-spend challenge, switching up a budget system, or tracking progress on a new healthy routine, we'll be highlighting all the risks *and* rewards of frugal living.

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Hi, everyone. I'm Cindy Zuniga-Sanchez for The Financial Diet and welcome to The Test Lab. Here at The Test Lab, we take on different money challenges to help us live a better and more budget friendly lifestyle.

In today's episode, I'm going to be taking on the challenge of living in New York City on the average income for New York City, which is about $64,000 a year. Now, depending on which part of the world you live in, $64,000 a year may seem like a whole lot of money or maybe not. But we all know that New York City is one of the most expensive cities in the world to live in.

I'm certainly well aware of this fact, because I've lived in New York City my entire life. I've also lived on different parts of the income spectrum. For some background, I was born and raised in a very low income community in the Bronx, New York.

As the daughter of immigrants, my family's household income hovered around the federal poverty line for most of my childhood. I attended a public university and then went on to law school. I graduated law school with a job offer at a very prestigious law firm where my annual salary was over $200,000 a year for most of my time at the firm.

However, that all changed in May, 2021 when I left my job as an attorney to pursue my business, Zero Based Budget Coaching LLC, full time. Now, although I am very grateful for this shift, I have experienced a dramatic salary decrease. Starting your own business is not for the faint of heart.

However, now I am at a point where I can start paying myself a salary. And the salary that I can comfortably afford to pay myself is about $64,000 a year or about what the average New Yorker earns. So through this challenge, I hope to gain a better understanding of two things.

Number one, how realistic is it to live in New York City on an income of $64,000 a year? And number two, how is my own lifestyle going to change and be impacted by this new salary? How are my money goals, perhaps, going to be impacted?

So what I'm going to be doing with you all is sharing my budget for the month of January. Yes, showing you my real numbers. And I'm going to be doing weekly check ins, where I'm going to let you know how my budget is going, how my spending is going, challenges that I'm coming across the way, maybe even some income earning opportunities which would be really great.

So I'm really excited to share this with you all and yeah, let's dive in. OK, so I budget on a monthly basis using the Zero Based Budget Method. And if you're unfamiliar with that method, it's basically where you give a purpose to every dollar that you expect to earn.

So you take your income and then you assign that to specific categories, such as savings, investments, expenses and debt. The key is to account for every dollar that you bring in. And I'll show you what that actually looks like.

Here is my budget for the month of January. At the very top, I write my income. Because I'm not at the moment receiving a traditional paycheck, I calculated what my net pay would be by plugging in $64,000 into a paycheck calculator.

I like using smartasset because you can include specifics on your situation. Such as marital status, location, any pre and post tax deductions that you have. So my expected net income came out to $3,996, which I rounded up to 4,000.

Your net income may differ given your marital status and any deductions that you have that come out from your pay. So I did want to note that. After income, I get into my savings and investments.

So for investments, I have planned to put $800 into investments for the month. I also have what you'll see three sinking funds, and sinking funds are basically short term savings for any expenses that you may have coming up in the future or irregular expenses as well. So for me, I did travel, Christmas and gifts, and those are the amounts that I put into those categories.

So total savings and investments for the month, I have planned $1,325. Next, we'll get into my expenses. Now before I get into there, I wanted to issue two big disclaimers.

One, this budget does not account for my husband's numbers. I budget separately and so these are my numbers alone. Another thing is that I did not include my giving or family help in this budget.

I do give to charitable organizations and I do help my parents financially, but for privacy reasons, I have omitted that from this budget. So now with that out of the way, for my expenses I have $1,200 for rent. That is, again, my part of the rent.

I pay our electric bill. I've budgeted $75 for that. I pay for two cell phone lines, $175.

For household items like toilet paper, personal care products, things like that, I budgeted $50. Transportation, I budgeted $200. Groceries, $300.

Dining out, $300. Personal spending money, $150. Clothing, I budgeted $100.

Entertainment, I budgeted $50. Subscriptions-- so for me that's my iCloud, my Google Storage and Spotify, I budgeted $14.97. That stays pretty consistent month over month.

I also always include a miscellaneous category in my budget. So I've included $60 for that. And then next, if you do have any debt, you would then want to include that.

I currently don't have any debt so that part of my budgeting is zero. And you'll see that if you take the income and you subtract what's in my total savings and my total expenses from that number, we get 0 or a zero based budget. So with that, I will check in at the end of this week.

Hey everyone. This is my week one budget check in. And I have my laptop here with all of my numbers, so we'll get into it.

This week, I spent $141.83 on groceries for both my husband and me. We usually alternate with who buys groceries, and this week it was my turn. About $20 of that is the delivery fee and tip.

We do Whole Foods, which is expensive but it's convenient. We also shop in our local supermarket, but this week we did Whole Foods. That amount is also about half of my grocery budget for the month.

So I'm definitely going to want to keep my eye on that budget, since we're still very early into January. Throughout the week, we typically eat breakfast, lunch, and dinner. We both work from home.

We usually do that here at home, but I did get us pizza one day for lunch, and that came out to $28.67. A big money win that I had is I decluttered our apartment, and I was able to sell some things that I had decluttered. Clothes, two pairs of sunglasses and a purse.

And I made $175. Shipping those items cost me $35, so my profit was $140. Definitely a money win and something that I added to the income section of my budget for the month.

My husband and I also do weekly date nights. And because of the Omicron surge in New York City, we rather just stay in and so we decided to order in. It was my turn to plan date night.

So I ordered pupusas from a local restaurant here in the Bronx. If you're unfamiliar with pupusas, they're a Salvadoran dish which is very, very popular and really amazing. It's basically a dough filled with like meat, beans, cheese.

And I feel like every culture has some variation of pupusas. So yeah, we got that for $35. And we also played Monopoly, some free fun on date night.

Definitely a win. I also had a few other expenses during the week. I rented a movie on Amazon for my nephew.

I think it was Paw Patrol or something like that. Came out to $2.99. I took an Uber back from getting tested for we all know what, and that cost $8.05.

I paid our cell phone bill, which was $171.84. That's for two lines. And I was also alerted to an old co-pay for physical therapy that I had apparently outstanding since March 2020, which they had never alerted me to.

So I immediately paid that and that was $21.99. My husband and I also went to the New York Botanical Garden, which is here in the Bronx, one of the most beautiful gardens here in New York City. And we have an annual membership to the garden, so we didn't have to pay anything out of pocket for our tickets.

But that also reminds me that I actually have to renew our membership by the end of this month, and the membership is $120. And I did not budget for that. So I guess we know where the profits of my decluttering sale is going to go.

This week, the grand total that I spent was $444.97. It's been very cold in New York City, so I've been doing a lot of staying at home and you'll see my budget reflects that, because not too much one on this week. This week, I spent $69.93 on HelloFresh, which is a service that sends you recipe cards and the ingredients to make those recipes.

I typically include this in my groceries budget because I still have to cook the ingredients. So that's my rationale. I did go out on Saturday night with my best friends.

We went to a Mexican restaurant here in the City and it was a lot of fun. We split the bill, and I spent $33.62. We then went to my friend's apartment for sangria and we exchanged Christmas presents.

I contributed $20 towards gas for my friend's car because gas is really, really expensive right now. But even so, it's good to help out your friends that have cars. I had an automatic transfer into my investment account from my checking account for $200.

I set up this automatic transfer for every other week when I was at my previous employer, because that's how I got paid. So it aligned with my paychecks. And I never turned off that automatic transfer, because it's a good habit to keep.

So every other week $200 is taken from my checking account. I had a couple other expenses for the week. My Google Storage subscription for $1.99, my Spotify subscription for $9.99.

I spent $11 on breakfast one day. I spent $22.29 on vitamins. I paid for our electric bill, which came out to $47.16.

I had budgeted $75 for this, so it's nice to be under budget. And my total spent for week two was $415.98. It's been another very cold week in New York City.

I don't know about you, but January makes me want to hibernate. I'm a lot less tempted to spend because everyone's indoors. So let me know if that's just me.

Let us know in the comments. Is January usually your slowest month? So let's get into it.

This week, I spent $86.19 on Whole Foods for our groceries. I didn't need to buy any meat because my husband had already purchased that last week and we still had some in the freezer. So I stocked up on produce, eggs, milk, juice, bread, and also the ingredients to make that famous TikTok feta pasta.

It was really good, so I recommend it. On Saturday, my husband and I took the Metro North downtown. That was $9 round trip.

We took the scenic path, walking through the Oculus to avoid being outside in the cold. I needed a new pair of jeans, so we went to the Madewell in Brookfield Place. It's a mall and Battery Park City.

It's really cute. It has a really small ice skating rink outside and gorgeous sunset views. So I recommend checking it out if you're in New York City.

I brought in a pair of my old jeans for Madewell's Denim Recycling program. So if you bring in a pair of jeans, they credit you $20 that you can use at their store. I also had an additional $20 credit from December.

So I paid $88 for my jeans that were originally $128. That's a money win. I also spent $31.51 on our lunch that day.

I had a few activities for savings and investments. So I transferred $100 to my investment account. Also transferred money into my sinking funds, which are my savings that I have for like my short term goals and expenses.

So I put $400 into my travel fund, $100 into my gifts fund and $200 into my Christmas fund. I've been saving for Christmas year round this way for a few years now, and I very much recommend it because it makes the holiday shopping season so stress free. So if you've never tried it, highly recommend you can start now.

Other expenses that I had this week. I spent $31 on breakfast for my husband and me, $28.99 on Girl Scout cookies, $15.23 at Rite Aid and $36.24 on a supplement. So that brings my total for week three to be $1,126.16.

I will see you next week for my last budget check-in. This week, we got hit with a snowstorm in New York City. And the day before it snowed, I decided to go to Harlem to get my eyebrows done.

Might as well take advantage of the time. I lived in Harlem for seven years, and it's one of my favorite areas in New York City. So I spent about $20 on my eyebrows and the tip.

I then walked to the Whole Foods in Harlem, because I had the idea of cooking a fancy brunch for my husband and me since we were going to be snowed in. And I looked at my budget and although I had only $2 left in my groceries budget, I had about $130 left in my dining out budget. So that was going to give me the wiggle room that I needed to buy my items.

I wound up spending about $105 on a very small basket of groceries, which is a bit ridiculous. But I did stock up on ingredients that I don't normally get like vanilla extract, maple syrup, coconut oil, things like that. Brunch was a success by the way.

I invested another $500 this week, which brings my total invested for the month to $800. And there are a few other expenses that I had this week. I spent $122.79 on Ubers and Lyfts, which is a lot for one week, but it was within my budget. $33.27 on household supplies, $9.79 at Rite Aid, $3.26 on an app and 2.99 for my iCloud subscription.

And finally, we had to pay our rent for the month of February. So my part was $1,200. So that brings my week four total to $1,997.06.

OK, let's do a quick end of month budget recap starting with my income. I was able to bring in an additional $175 in income from my Poshmark sales after I decluttered my apartment earlier this month, and that meant that I was able to send $400 to my travel fund instead of $225, which is the amount that I originally planned. This just goes to show that even small amounts of additional income can have a big impact on your budget and your overall money goals.

Next we have my savings and investment goals for the month. I was able to satisfy those. Actually, I surpassed that because I was able to put more money into my travel fund, which I'm very proud of.

As for expenses, generally I was under in my expense categories, except for my groceries budget. I did go over my groceries budget by about $103. But because I was under in my other budget categories, it did balance out.

The lesson there I think is the check in regularly with your budget. I recommend doing so at least once a week just to ensure that you are on track. So in the end, I was under budget for the month by $190.83.

I will likely be using that money to renew my annual membership at the botanical garden, which is $120, and is due today. So that's most likely where that money is going to go. Now as for my final thoughts.

At the beginning of this challenge, I sought to gain a better understanding of two things. Number one, how realistic is it to live in New York City on this income of $64,000 a year? And number two, can I adapt my lifestyle to this income?

So first, can you realistically live in New York City on this income? Yes. In fact, millions in my City do.

And we need to be mindful that many earn significantly less and live in New York City. However, can you live comfortably in New York on this income? That's going to depend on your circumstances, your lifestyle, as well as your money goals.

For example, a single parent that is financially supporting someone else is going to have a much tighter budget than someone that's maybe in their 20s and living with a roommate. So ultimately, it is going to depend on your individual circumstances. OK, as for whether I can adapt my lifestyle to this income, I think generally yes.

But I did do this challenge in the month of January. If I had done it in the month of July, I think it would have been much harder for me to stick to the budget. A few other things to keep in mind is that my rent costs, $1,200 a month, is much more reasonable than I think what most people pay here in New York City.

And that's because I split the cost of my two bedroom apartment with my husband. So because of that, I did check to see what the cost of a one bedroom apartment is in our building, and it's $1,800. So if I lived on my own, I would be paying $600 more a month on rent or I would probably just live with a roommate.

Another big important thing to note is that I don't have any debt. So if you have student loans or credit card debt, which I believe most people do have some form of debt, that's definitely something that's going to impact your budget and is going to give you less wiggle room to put towards your savings or your investments or even your expenses. I believe that something that we can all take advantage of is exploring ways to increase our income.

So whether that's at your current employer, asking for a raise or a promotion, seeking out different higher paying job opportunities where you can negotiate your salary, or it's taking on side hustles. Those are all going to be well worth our time rather than just focusing on how can I cut back on my budget. So I hope that you enjoyed following me along for the month of January to see how I budget off of the average New York City income.

If you have any challenge ideas that you'd like to see me do, comment them below and don't forget to like this video, subscribe, and I will see you all soon. Bye.