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Budgeting in a High Cost of Living Area, Part 3 – $50k

It’s a law graduate’s worst nightmare – making only $50,000 in an expensive city like New York. What to do if you have a pile of loans? Unless your parents are paying the rent, living in Manhattan is out of the question. Frugality must start kicking in hard.

Here I used the paycheck calculator to compare the net pay outcomes for NYC residency and non-NYC residency. Contributing to a 401(k) is not going to be feasible at this point.

[Disclaimer – Pay check results are approximate and based on a single filer with no dependents. The net pay was calculated without taking any deductions into account.]

A. Living in New York City

Bi-weekly Gross Pay: $1,923.08
Federal Withholding: $265.53
Social Security: $119.23
Medicare: $27.88
New York: $93.78
NY SDI: $1.20
City Tax: $58.31

Net Pay: $1,357.15

B. Living in New Jersey

Bi-weekly Gross Pay: $1,923.08
Federal Withholding: $265.53
Social Security: $119.23
Medicare: $27.88
New York: $93.78
NY SDI: $1.20

Net Pay: $1,415.46

Based on the above results, the difference in net pay seems pretty negligible whether you live in New York or New Jersey, amounting to only $100 per month. Your public transportation expenses will be also be higher if you are commuting from New Jersey versus having an unlimited MetroCard to cover all your travel needs in New York City. However, as you can see from the budget below, you still get an extra couple hundred dollars for loans and savings with the slightly lower cost of living in New Jersey.

Rent $1,000 $1,000
Utilities $50 $50
Transportation $150 $250
Cell Phone $100 $100
Loans $400 $500
Savings $125 $150
Food $400 $300
Personal Care $75 $50
Entertainment $350 $350
Entertainment $350 $350
Miscellaneous $50 $50
TOTAL $2,700 $2,800

Overall, you would need to incorporate some frugality in your life in order to make ends meet on a $50k salary. My suggestions are as follows:

  • For $1000, you can live in Brooklyn or Queens with one or more roommates. Same for New Jersey, though it is possible to get a studio for $1000 or less. I know because I’m living in one!
  • You have to limit dining out to maybe once or twice a week, depending on the price of the meal. Also packing lunch for at least a few days a week can help cut down food costs.
  • You also have to give up the convenience of dry cleaning. Save dry cleaning for pants or skirts and hand wash everything else. Most tops that say dry cleaning, including silk or wool, can simply be hand washed with Woolite. This actually helps preserve your garments. Men’s cotton work shirts can be thrown in the washing machine and ironed at home.
  • Limit cab rides to post-midnight trips, when the subway runs less frequently and you may want to avoid walking for safety reasons. Choose to walk more when the weather is nice, the exercise can be a bonus.
  • Life can still be fun with a smaller entertainment budget. Sites like Groupon and Living Social always have good deals for activities and events. Take advantage of happy hours for drink specials (assuming that at $50k, your work hours won’t be too crazy). Organize potlucks and picnics where everyone can enjoy food and company for less.

So there you have it – how to survive on $50k while paying down your law school loans. One variable that I didn’t address in the above budget is health insurance. In this economy, it’s very possible that your employer doesn’t provide health insurance benefits. If that’s the case, then you will need to decide if health insurance is a priority based on your tolerance for risk and/or a necessity based on your personal health conditions. The cost of individual health insurance would have to cut into budgeted areas for savings and elsewhere. It’s a hard knock life!

Lastly, if you’re working in public interest, remember to look into the loan forgiveness program. It could be your savior after 10 years.

If you’re currently “roughing” it in NYC for $50k or less, please share your tips and insights in the comments below.

[In case you missed the other installments: Budgeting in a High Cost of Living Area, Part 1 – $160k and Budgeting in a High Cost of Living Area, Part 2 – $100k.]

Sunny Choi is the 2013 Writers in Residence Coordinator for Ms. JD. She is a former participant in the Writers in Residence program, where her monthly column Legally Thrifty focused on beginners personal finance advice for law students and professionals. A graduate of the University of Michigan Law School, she currently practices commercial litigation and creditors’ rights while freelance writing and blogging in her spare time. She can be reached at

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