We SPEND.

In light of my recent infamy on a certain website (the name of which I won't mention as I don't want my 5 minutes of fame to turn into 10) in which I was misquoted about a financial issue, I decided this was the best time to air all my dirty laundry on the hot topic of money.  What the heck? The damage has been done so I might as well let it all hang out now.

$2,000.    $1,500.     $1,130.    $1,535.  These are the monthly rents I've paid in four different Manhattan apartments over the past 4 years.  The cost of learning personal financial responsibility while living in Manhattan: Priceless.

In New York rent expense is high.  So are grocery expenses.  So is the cost of eating out.  Life in general is expensive here.  According to a cost of living calculator on CNN Money.com, if I moved from NYC to Philadelphia, housing would cost 66% less, groceries would cost 16% less, health care would cost 18% less, and so on and so forth.  You get the picture: life is expensive in Manhattan.  That coupled with the challenge of learning to be financially independent can make for a potentially messy money situation for a young college grad.  That's what happened to me.  Here's my story. Don't worry, there's a happy ending (not that kind... get your mind out of the gutter!).

During my first 6 months in the City, I lived in a furnished studio owned by a friend of my mom's friend's dog's uncle's friend (or something).  The owner had just become engaged, was moving in with her fiancé, and needed a month-to-month tenant.  In October while I was in my last semester of school in Florida, my mom and I visited the city to check out the apartment, and I signed a lease to start mid-November.

Money Mistake #1: Don't pay rent for 1.5 months before you actually need to move into the apartment!  At the time, signing a lease so early really did seem like the best idea.  Not only did I get caught up in the excitement of getting my own apartment in Manhattan, but I was also overwhelmed by the prospect of having to find an apartment in a few short weeks if I left the task for December.  Little did I know that a few weeks to find an apartment is actually more than enough time by Manhattan standards.  On the upside, my family had a place to stay when we spent Thanksgiving in NYC. Bonus! Nonetheless, it was money out of my pocket which could have stayed there a bit longer.

Money Mistake #2: Don't pay more than you can afford!  The first few months of learning how to manage my cash flow (I had never before had a steady monthly paycheck in addition to steady monthly bills) were a bit tricky. Although my parents helped me out by purchasing many of my domestic starter supplies (bedding, towels, etc), I was on my own with the rent and all other living expenses for those first 6 months. Here's a glimpse from my journal:

4/9/2008, 10:00PM: "This evening I'm feeling a bit upset. I think I've identified why. I lost an          $80 metro card, I owe $300 to Dina [landlord] for utilities which I can't pay til after 4/15 when I get paid, I have to do laundry (but first put money on my card), I need water [I was drinking only bottled water at the time since the tap water was a murky grey], and I don't have a spring jacket. So overall it's things I need to buy/pay for that are making me upset. Plus, I want to take some dance classes this weekend but they cost money too."

Realizing I was in over my head in terms of monthly rent, I embarked on finding a less expensive apartment.  That brought me to a 1-bedroom, prewar walk-up on the Upper East Side.  Not only was the new place bigger, it was also cheaper. The reduced rent, plus a little help from my parents for a short time, plus a raise at work made for a much better money situation. But apparently I still wasn't totally on course...

5/25/2008, 8:30AM: "I am on my way to achieving the goals I mentioned yesterday... I want to be a better steward of my money. A few examples of how I spent too much money impulsively: buying Nike sneakers (that I didn't need), buying the Guess bag (that I didn't need).  Tonight I'm making a list of purchases I'll need for the new apartment. That way I'll have a plan and won't buy impulsively."


Sounds like I was on a good track, right? Wrong! That very week I bought living room furniture from Macy's (I had to sit somewhere), on a store credit card without any special financing offers.

Money Mistake #3: Don't make a big purchase on a store credit card, especially if there is no incentive (i.e., no interest for a year, no payments for a month, etc)! The furniture was not on sale, and there was no financing benefit.  It took me many months to pay off the balance, and the payments were LOADED with interest (meaning I wasted a bunch of money).

Breaking in some of the new furniture.

Money Mistake #4: Don't keep it a secret... tawlk ta ya Motha! Despite those traumas, I still had lessons to learn about managing my cash flow and not impulse buying.  During that second year in the city, I ended up over-using my Amex card. When I got the bill each month, somehow I was completely surprised at the total and was often unable to pay off the full balance. I ended up racking up an overdue balance, resulting in phone calls from Amex.  This was totally stressful and scary and I didn't know what to do.  So I handled it like any young girl would do: I casually slipped it into conversation with my mom during one of her visits to the city.  She flipped! But after flipping, she helped me devise a plan to get out of the trouble (thank you Mommala!).

My smart mother and me. :)

After that, things started to brighten up in the money realm. I moved in with some new roomies to a fab apartment.  Living with roommates DEFINITELY helps save money. I got my rent to a manageable place, and gained much better control of budgeting, cash-flow, etc.  Don't be fooled by all the mistakes above... I don't have any student loans or any credit card debt, so I couldn't have been all wrong. But we all have room to learn and grow.. and hopefully grow our bank accounts right along with it :)