Let’s talk about… MONEY. (and financial goals, NY apartment searching, and some other things)

talking-money-lg-blog

April 5, 2018

Who likes talking about finances? Maybe it’s easier when the person you’re talking to is your partner? Or a close family member? MAYBE your bestie?

Regardless, I’ve always thought talking about finances was rather tacky. The only person I can comfortably talk about money with is with my husband and that’s because it’s HIS money too.

Why do I feel like talking (rather, writing) about finances with YOU?

Because the whole point of this blog is to offer a glimpse into this crazy adventure of moving to NY from GA AND finding jobs and an apartment in the city. At some point, I was going to have to be honest about MONEY. If you are considering making a similar move, I would urge you to look at your finances fiercely. 

So, if you read through this post, you will discover the truth to our financial success.

Firstly, I won’t be sharing [too many] specific numbers. I will reflect on our goals and what we achieved. Plus, I checked with my hubby, and he would prefer to keep some things private. (That’s fair.)

If you haven’t already scrolled through this blog’s posts OR you haven’t been reading since the beginning, let me review our original financial goals regarding our move to NY from GA:

  • Get out of debt. (Regarding credit card debt: completed. We still have car payment on Car #2.)
  • Save save save $$$. (Done and done and done…but always trying to save more.)

In addition to the above goals, Daniel and I also needed to be sure our Checking and Savings would have enough money that we could comfortably live off of. While Uncle Peter is a gracious host and is allowing us to live with him rent-free while we job search, which is incredibly helpful, we still need MONEY. One last thing, we needed to be sure that we had enough money for the apartment process.

NY real estate, including apartments, is definitely different than what I have experienced in Georgia. My last job was in property management – I was never familiar with NY’s way of the apartment process, which may include broker’s fees and additional deposits that can equate to 3 months of rent.

My understanding of NY’s apartment hunting process is in thanks to:

  • Online blogs/articles.
  • Talking to those who live in the city.
  • NY apartment search apps.
  • Talking to several NY brokers.

So, what was the first step in completing our goals list?

(WARNING: you are about to read the big, stupid, dumb thing I did to ensure our financial survival in a big new city…)

I emptied out my 401k.

(What I imagine you, the Reader, are thinking: “NOOOOOOO WHYYYY?! That’s SO DUMB! That’s your RETIREMENT! How will you LIVE WHEN YOU’RE OLD!!???)

Accessing my 401k was sort of the beginning and end part of completing our financial goals.

Let me start from the beginning – –

Last year, in the spring or fall, I was in a panic. This was due to the fact that Daniel and I were still not sure what our plans were. Were we moving? Was one of us quitting our jobs? How could we make any goals if we had credit card debt? YES, we all have credit card debt. BUT I think we can also be responsible human beings and set realistic goals before taking the plunge doing something insane (like making a random move out of state).

(NOTE: Daniel’s job was also putting us in an uncomfortable position. I will not elaborate further here. If you’re curious, feel free to shoot me a private message.)

I took out a small loan from my 401k. This was a more responsible decision. The loan option meant that I would be paying my 401k back from my paychecks (tax free). The small loan was enough to cover half of our CC debt.

Why use the 401k monies rather than just save up the money ourselves? Because we SUCK AT SAVING.

I like having a to-do list. I like checking off all the boxes. The loan option meant I could check off boxes faster.

(Reader: But you could have saved! You could have just put more money away into Savings or spent less!)

YES, Reader, that is all very helpful info.

But let’s be honest – I do not know anyone that is actually good at saving money, unless they’re making six figures.

Several of my friends have shared how they had to empty out Savings accounts due to unwelcome situations. Sometimes it was just ONE thing that required all of that money. Have you ever had your car suddenly break down or have issues? Have you ever had medical bills?

Daniel was amazing at researching articles regarding budgets and how to save money in a better way. He downloaded special apps and we started discussing our budgets more.

We were able to clean up the rest of our credit card debt before our move to NY.

I am happy to say that we did have a good amount in Savings BEFORE the 401k addition. This happened because we cut out big expenses (gym memberships, therapy, big ticket dinners).

Back to the 401k –

Was this a smart decision? Probably not. Do I regret it? Absolutely not.

While I care about retirement-age Laura…she’s still someone I don’t have to worry about yet.

I was worried before about today-Laura. I was worried if our career choices were the best options for us. I was concerned living a “comfortable” life in GA was the best scenario for us. I was unhappy. I wanted a challenge. I wanted to live life to its fullest. If that meant emptying out my 401k, then so be it.

(We’ll get to the money part soon, I promise.)

Daniel and I have been researching 2-bedroom apartments in NYC. We have been looking at Manhattan, Brooklyn, Queens, and Harlem. 2 Bedrooms, from what we see and are liking, range between $1900-$2500/month.

How could we afford a $2500/month apartment? Daniel and I are hoping to each earn at least $50,000 with our new jobs. A couple earning $100,000/yr could easily make a $2500/mo. apartment work. Now, ideally, I’m still looking at the $2000-$2200 range.

A couple of NY brokers I have talked to have explained that if we start our apartment search BEFORE finding jobs, we may need to be prepared for additional deposits – each equaling to a month of rent. Let’s not forget about security deposits, application fees, and other deposits required. The other surprise is that some apartments may require these additional deposits regardless of having jobs or not.

If we use a NY broker, we could be paying a broker’s fee of 15% of the annual rent. That’s A LOT of money.

But a broker is also extremely helpful. He/She may have access to apartments before they are posted. They look for our specific wants and needs for an apartment. They have access and knowledge.

Keep in mind, in GA, it’s easy to look for an apartment. You do a few Google searches, stop by a leasing office, pop in, and BOOM! you could have an application in hand immediately.

NY apartment buildings are a bit different. There may not be a leasing office. You may actually have to wait and schedule a tour with the building’s landlord or manager. The same apartment you look at could be GONE by the time the next few tours roll around.

A lot of people in NYC are using apps like Street Easy, which we use, where you can view apartments, see pricing, and set up tours. I’ve talked to a few people who have used Street Easy and loved the experience, as they handled arrangements themselves and avoided the broker’s fee.

(We haven’t started the apartment search process yet…jobs must come first. For now.)

NOTE: However, from my research, I’ve learned that an apartment advertising “no fee” does not necessarily mean you’re not paying some type of broker’s fee back to the building.

So, a big part of fulfilling our financial goals was to have enough money to get an apartment. Let’s say we go for an apartment that is $2500/month. $30,000/yr. That means the 15% broker’s fee is $4500.

Let’s say the Security Deposit is equal to one month’s rent ($2500). Let’s also say the landlord requires first and last month’s rent up front ($5000). So, in total, we would need to be prepared to have $12,000 in cash (including the broker’s fee). AND there could be more fees or money due upfront?!

I would like to take advantage of the luxury of using a broker, but, with enough careful planning and timing, we could save ourselves more money. But we’ll see…

But think about – $12,000 up front just to get an apartment settled? THAT’S INSANE! But could be necessary, especially when living in NYC.

I am happy to say that we did meet our minimum money goal. Our target goal was to have at least $15,000 prepared just for the apartment process. The rest will go to Savings. The other bit is saved specifically for the 10% tax I’ll need to pay to the IRS next year (for emptying out my 401k). And the “extra Savings” money will be used to start an IRA and possibly a second retirement account. This was all due to the sale from the house, the emptying of my 401k, and the sale of one of our cars.. We still have Car #2 to sell at some point.

We are financially comfortable – that’s a big part of what is making this adventure so exciting. I have never slept better. Since we have been at Uncle Peter’s, I have not had ONE difficult night of sleeping. If you know me, you know that since I was in high school, I have struggled with insomnia and high functioning anxiety/depression. I have never been happier.

Maybe making more money in NYC will allow me to catch up on the 401k I lost? Who knows? Maybe I’ve just kissed all that money goodbye? But maybe, just maybe, I made a sound choice to allow us to start our new lives.

The whole point of my blogging was to share my life with you. You might agree with our choices. You might think we made a terrible decision.

But it was ours to make. We are happy and excited to be in New York. We don’t have jobs yet. We’ve lived with Peter a little over two weeks now. Daniel and I are partners in all of this; we support one another. And we’re happy.

If you have any insight to the NYC apartment hunting process, please contact me! Also, please share and follow my blog. Thank you all.

 

 

 

 

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