How Much Can You Save in NYC?

Hey there fellow monkeys! I understand that bonuses are getting cut this year because of the coronavirus, but I was wondering if I could get some insight on how much an IB analyst can save of their signing bonus, base, and first year bonuses if we were still living in a pre-coronavirus world? I'm estimating a $10,000 signing bonus, $85,000 base salary, and $55,000 year-end bonus (of which 70% is paid within one year of the beginning of the First Year Analyst stint, and the remaining 30% comes in two months later). My personal forecast says that I have roughly $54,000 in hand after paying taxes, rent, and food/other expenses per month. Does this seem realistic. Thanks is advance for the help!

Comments (25)

Jun 7, 2020 - 9:44am
theATL, what's your opinion? Comment below:

It would be much more useful if you explain your assumptions. Just asking if the result is reasonable won't be all that useful since people have different spending patterns and therefore will get to that number different ways and what is reasonable spend on rent for one person may not be for another.

As an example $150k is roughly $95k after taxes in NYC (depending on your benefit costs and 401k contributions) Then you could lay out the rest (annual): Rent: $24k Food (incl restaurants): $6k "Fun" budget (going out): $6k Utilities + phone + subway: $3k

So at this point you are at $56k with some numbers maybe a bit inflated above to be conservative in your savings.

Then ask yourself how you want to budget: Travel (fun and family trips, maybe in your fun budget), clothing, hobbies, anything needed for work (computer? Etc), and if your first apt furniture and setup costs (broker fee, etc).

Array
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  • Analyst 1 in IB - Gen
Jun 7, 2020 - 2:07pm

yeah this is pretty spot on. 40k+ saved would be a good goal and 50k+ would be kind of a stretch depending on how frugal you are

Jun 7, 2020 - 4:30pm
IB43, what's your opinion? Comment below:

Thanks for the insight. Yes so I assumed a 36% tax rate on all income, $2,000/month rent, $500/month for food/groceries/other expenses, and $121 monthly subway pass. I didn't include any amount for 401k contributions as of right now, because I think its more important to help my parents out with some debt that they have. I am not sure about healthcare/insurance costs, but it looks like I need to include that in as well.

Array
Jun 7, 2020 - 4:45pm
theATL, what's your opinion? Comment below:

Got it, some unsolicited advice, but if the debt your parents have is at a reasonable rate, I would suggest at a minimum maxing out your employer contribution. Many firms will match 50%-100% of X dollars so it is an immediate (risk free) return and helps setting you up for retirement (yes there are a bunch of rules and you can't touch the money, etc but I would still recommend it).

I realize that is a personal decision and there are many reasons why paying your parents debt might be a better use of the funds (and might be a stress relief thing, etc).

As for benefits it won't be much ($30-100 pre tax a month).

You shouldn't forget moving costs as those can be large (including as I said before furniture, etc).

And a final thing, I normally find that no matter how well you budget you should add ~20% to any "fun" budget as you end up spending more at dinners, trips, and nights out with friends.

Array
  • 6
Jun 7, 2020 - 7:14pm
Whatever007, what's your opinion? Comment below:

also don't forget apartment utilities, renter's insurance, dry cleaning, haircuts, shoe-shines, business clothes, any medical costs, etc. There are soooo many unexpected costs that people (myself included) didn't take into account before starting FT.

  • Analyst 2 in IB-M&A
Jun 7, 2020 - 3:15pm

A good practice with regards to savings is to not count your bonus when you think of your salary. If you just live off of your base salary and save/invest all/most of your bonus you'll be at a great place down the road.

I take home about ~$5k a month (post 401k health insurance etc) and currently have about a bit over $100k saved up in cash/stocks/etc.

  • Analyst 2 in IB-M&A
Jun 7, 2020 - 9:11pm

Can't say its all me to be honest, was able to graduate college debt free (scholarship + parent support). Got a great bonus 80~90% base my first year since the firm did really well 18-19. Although not sure how bonus will be looking soon...

Live with 2 of my buddies so rent comes to about ~$1,600 a month including utilities. Also so busy with work that money sort of just built up over the past 1~2 years.

  • Prospect in IB - Cov
Dec 5, 2020 - 9:33pm

When you say save bonus do you mean invest it or just hold in cash. Hear this a lot and don't know what people mean by it

  • Analyst 1 in IB - Cov
Dec 5, 2020 - 10:20pm

Going A2A soon and frankly, haven't saved much. How much would be a realistic savings goal for an Associate assuming 250k all-in?

  • Prospect in IB - Cov
Dec 5, 2020 - 10:39pm

Assuming nyc, 150 base, and no real lifestyle change from a3-as1, I'd say you should really put in the 13% towards 401k to max it out, and given the big bump in salary from 95-150 you can definitely save another 20k on top of that from the salary. Could do a backdoor Roth IRA with extra $ too. For the bonus save it all or maybe treat yourself a bit but that's more up to you. 

  • Incoming Analyst in IB-M&A
Dec 5, 2020 - 11:26pm

yeah biggest fixed cost is rent, keep that within reason. Avoid buying rounds for everyone/pre game at home and you should be able to hit the 10k off base. How much are you planning on contributing to 401k?

  • Intern in IB-M&A
Dec 5, 2020 - 11:32pm

Assuming maxing out a 401k + max out a Roth IRA, but I count both in my savings/investments goals. Not sure what my bank's 401k match policy is though. I guess one good thing happening now is I've seen a lot of rent prices in the city going down which should help, seems like 1.5k-2.0k/month would be a reasonable rent goal and hopefully closer to the lower end but I'd be willing to pay more for a shorter commute. 

  • Analyst 2 in IB - Cov
Dec 7, 2020 - 3:02am

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