AN1 budget for below-street salary: am I crazy?

Incoming AN1 for an intl bank in NYC paying below street (~100k base//assuming 10k bonus). I’m assuming here based on the numbers I’ve been given. I’ve been budgeting tightly since I was still in college. Anything look unusual?

For context, did BA/MA before breaking into banking. Bit late to the game. Not getting any help from my limited family.  


Take-home post-tax: ~6000

401k: -500

HSA: -300

Post-tax: ~5200

Rent: -950 (roommates)

Utils: -100 (accounting for summer, anything left over goes to personal savings)

Transportation: -150

Personal savings: -500

Student loans: ~-1800 (mix of federal and private. Not much I can do here)

Food: ~-400 (groceries plus eating out. i like cooking at home)

Left over to spend however I see fit: ~1300

8 Comments
 

Based on the most helpful WSO content, your budget seems well-structured and realistic, especially given your below-street salary and the high cost of living in NYC. Here's a breakdown of your budget with some insights:

Strengths in Your Budget:

  1. Rent: At $950 with roommates, you're keeping housing costs well below the typical NYC average. This is a smart move, especially early in your career.
  2. Transportation: $150 is reasonable for NYC, assuming you're using public transit. If you're not already, consider monthly MetroCards to save further.
  3. Food: $400 is a solid balance for groceries and occasional dining out. Cooking at home is a great way to save.
  4. Savings: Allocating $500 to personal savings and contributing to your 401(k) and HSA is excellent. You're building a strong financial foundation early.

Challenges:

  1. Student Loans: $1,800/month is a significant portion of your take-home pay (~35%). While unavoidable, this will limit your flexibility until paid down. Consider refinancing if your private loans have high interest rates.
  2. Discretionary Spending: With $1,300 left over, you have a decent cushion for discretionary expenses. However, be mindful of lifestyle creep, especially in NYC, where it's easy to overspend on entertainment, dining, or shopping.

Suggestions:

  1. Emergency Fund: If you don’t already have one, prioritize building 3-6 months of living expenses in your personal savings. This will protect you from unexpected expenses.
  2. Roommates: Staying with roommates for a few years can help you save more aggressively. Consider this until your student loans are more manageable.
  3. Investing: Beyond your 401(k), consider allocating a portion of your leftover $1,300 to a brokerage account or ETFs. Let your money work for you.
  4. Side Hustle: If time permits, a side hustle could help you accelerate loan payments or savings.

Final Thoughts:

You're doing a great job managing your finances on a tight budget. Keep focusing on paying down your student loans and building your savings. Once your loans are under control, you'll have much more flexibility to enjoy your hard-earned income. Keep grinding—you’re on the right track!

Sources: Managing Your Money - Building a Personal Financial Model, Managing Your Money - Building a Personal Financial Model, Is my IB analyst personal budget realistic?, Can someone help me with budgeting? 170k as a 22 year old is absurd to me., Millionaire by 30

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Harlem. I have a couple of roommates and my room is pretty small, but we have in-unit washer/dryer and the apt itself is pretty big. Very good deal

 

Some thoughts on the 1300 left over every month.

I think you should first build up a couple of months worth of living expenses in a HYSA. You probably are already doing that.

Afterwards do you plan to just pay down your debt as quickly as possible? Or put a majority of it into savings? That’s the only part of the budget I’m sticking on.

Also not saying you shouldn’t have some fun with that money

 
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