Reader Study: Getting Rich in Manhattan… on $65k/year

blackhole_1kNew York City exists in a dimension all by itself. Like a Black Hole that has formed upon the Eastern Seaboard, it is a place where conventional financial rules don’t apply. In Manhattan, you can feel poor after receiving your $3.6 million quarterly bonus because somebody down the hall just made $360 million, and while that larger sum will get you a good apartment, it’s still not enough to retire on.

The near-infinite mass of this concentration of funny money creates a great dent in the fabric of the cash-time continuum, and the gravity can be felt over a thousand mile radius as prices and attitudes are distorted. This has given rise to the urban legend that Mustachianism won’t work in NYC. “You need to make $350k here just to stay afloat – and at that level, you’ll still be far from rich.”

I like to collect stories from people who ignore this legend, and today’s is from a couple who started with a $65,000 income and $100,000 of student loans, and wound up debt-free and rapidly accumulating wealth just 9 months later. It’s a mathematical impossibility, right? Not if you exploit the alternative physics that are always present in financial black holes. Let’s check out the story.

Dear Mr. Money Mustache,

A little background – my husband (then fiance) had been lurking on your site for months and began slipping your words of wisdom into casual conversations and feeling me out. He finally sent me your blog and I was hooked and fully on board for Financial Independence.

As we began to get our finances in order, he asked for my student loan details (the student loan I vaguely mentioned and had been assuring him I was “taking care of”), and he was shocked to see our net worth plummet after adding the $100k (@ 6.8% interest) worth of debt to our Mint account for tracking.

I was definitely in denial over the last few years since graduating, making the minimum payments or simply deferring when I could. I also was banking on Public Service Loan Forgiveness (PLSF) – thinking if I just make my minimum payment every month (which wasn’t even covering the full interest accrued), it would all be forgiven in 10 years! Score! This was my “taking care of the loan”.

My husband quickly poked holes in my strategy: I would be limited to the public sector, wouldn’t be able work abroad, wouldn’t be able to work part-time, or wouldn’t be able to just not work at all.  On top of all this, my denial in dealing with the loan resulted in me accruing over $10k (!) in interest alone in the four years after graduating.

What followed was him presenting me with projections of how much interest we would pay if we instead paid this over the course of 5 or 10 years, which I was arguing for, and him then proposing we pay this off over the course of 15 months.

My argument was that we weren’t earning enough, I wanted to save, and we lived in one of the most expensive cities in the world – Manhattan. However, it quickly became clear that our hair was on fire and we committed to kill off this debt ASAP.

This was our financial landscape in June 2013, when we made the decision to go full Mustache:

Starting loan balance: $99,689.49 (our one and only debt @ 6.8%)
Savings: $32,062.17
Starting net monthly combined income: $5663
Rent: $1,695 for a 2br/2ba apartment in Manhattan. (Partially subsidized housing through my husband’s postdoc).
Spending: we weren’t using any way to track this, so I can’t say, but my guess it was on average $1,500-$2,000 on top of our rent.

Fast forwarding to the end result: By increasing our earnings a bit and tremendously cutting back on our spending, we were able to make payments towards the loan that ranged from $4k up to $10k each month. This graph (showing the loan balance at the end of each month) illustrates the annihilation of the loan from June 2013 to April 2014:


Here’s How They Did it:

 In July 2013, the very first thing we did was dump most of our $32k savings account into the loan, bringing the balance to $67,627.32. We left only a small buffer for monthly expenses. Then, we set out to hustle.

  • Around that time, my first 5% raise kicked in, which didn’t hurt.
  • We set to work renting our extra room on Airbnb, adding an additional $2-4k/month to our net income.
  • I picked up additional work, earning an additional $10k over 6 months.
  • In December, I negotiated another 5% raise.
  • My husband received a modest raise (2.5%) during this time as well.
  • We also reduced our buffer to $1k since we had lines of credit and were growing impatient – some might say we were living on the edge.
  • In January 2014, my mom, who thought what we’re doing was awesome, gifted us her old gold with permission to sell it. Through Midwest Refineries (thanks for the pro-tip on how to sell gold), we receive about $4.5k for it which was dumped directly it into the loan.
  • Throughout this time, we sold pretty much anything we didn’t have a use for – extra furniture, an extra iphone, a guitar, my wedding dress – and it added up!

In terms of spending, we cut back a lot and, in retrospect, this had a much bigger effect than the additional income we were able to bring in. We live in Manhattan because my husband has a 2 year post doctoral work contract, so couldn’t change that situation just yet.

  • We cut down eating out/going to bars, which has been the biggest challenge since that’s just what people do in NYC (drinks, brunch and drinks+brunch).
  • My husband switched his cell carrier to a pay as you go (luckily, my employer pays mine).
  • Our transportation costs are super low since we don’t have a car, my husband lives walking distance to work, and I have employee discounted transportation (~$80/month for unlimited subway/bus use), and taxis just did not exist for us (exception: Costco runs).
  • Absolutely no unnecessary purchases (clothing or otherwise).
  • All our expenses were placed on cash reward cards (Chase Sapphire Preferred, AmEx Blue Preferred for groceries).

Usually our monthly spending (apart from rent) fell between $800-$1k/month. We could have probably done better, but we still managed to pay the loan off 6 months ahead of schedule and never once felt deprived of anything, so we’re happy with that. During this time we also had a small, simple wedding (my dad generously paid for this), took a honeymoon (using wedding gift income), and went back home to California for the holidays.

After all of this, I can’t stop looking at the “loans” section of my Mint account, it’s unreal:


We couldn’t be happier to be free from that 6.8%! From here on out, we plan to maintain our lifestyle and spending and looking forward to seeing those loan payments go into savings and investments instead!

The Happy Ending

I get stories like this all the time. Efficient living works anywhere in the world. In expensive areas, the higher base costs are offset by the increased presence of weird anomalies that you can harness to your advantage. This couple used AirBnB to leverage the value of their partially-subsidized housing. They had a large unproductive savings account that they put to work by dumping it into the high-interest loan. And they took the incredibly rare step of combining Costco runs and home cooking with Manhattan, the place where most people don’t even remember if their apartment has a fridge in the kitchen.

There is always a way to live better and prosper in your own system, as long as you acknowledge this truth and set to work finding it, rather than wasting any energy explaining why these tricks could never work for you.

Efficient Living notes from within this article:

  • For great (and cheap) phone service, I’m still a big fan of Mint Mobile (and these others)*.
  • Our NYC friends leveraged several reward credit cards because of signing bonuses of up to $400 and reasonably high cash back percentages. The cards they used are among my own favorites, I maintain a list of them here.*
  • The place I discovered to ship unwanted gold and silver artifacts for recycling (with a high payout) is called Midwest Refineries, I described  the experience in this post.
  • Does Costco really save money? For me, it’s almost a 50% discount on my most expensive grocery staples – see article here.

*Those first two things are also the main source of this blog’s income, so I make a point of including a link occasionally to keep the lights on here, to allow the rest of the site to have minimal advertising. Thanks again for your support!

  • Sly April 6, 2014, 11:15 am

    “Rent: $1,695 for a 2br/2ba apartment in Manhattan (Partially subsidized…”

    sorry but I kinda lost interest right there. Anyone renting an apt at that price in Manhattan is basically sitting on a gold mine. Assuming they live below a 110th street their rent is more than half the local average. If they can’t save money no one can.

    • Mr. Money Mustache April 6, 2014, 12:00 pm

      If you lose interest based on learning about a cool advantage somebody else acquired, you’re missing the whole point of this article. Opportunities like this pop up for everyone, but you tend to miss them if you’re busy writing complaints here.

      It’s just like when people write off my own early retirement story because they don’t have engineering jobs, or know how to renovate houses, or don’t like riding bikes. Instead of looking for alternative ways to do even better (for example, finance pays even better than engineering, many people live for even less than $1700/month in Manhattan due to roommates or other special arrangements, and most professional jobs in that area pay MORE than $65k – to the point that you could pay for an unsubsidized apartment and still have $65k TAKE-HOME after taxes to work with).

      Never question the individual details of anyone’s accomplishments. Instead, figure out the mentality that they used to get their shit done, then adopt and adapt it for your own advantage.

      • Claire April 6, 2014, 12:56 pm

        Understating the income was the one detail in this article that bothered me. $5663 /month actually works out to $67956/ year, and on top of that, they specified that this was their net income… not their gross income. Our gross income is between 50 & 75k, but our net take home is only 65% of our gross. Granted, we do put 10% into our 401k before we take anything home. But without that, we’d only take 75% home after taxes and insurance. If that holds true for this couple, they actually started out making closer to $90,000 or $91,000 nine months ago, before they got three separate raises.

        I’m not trying to be a complainy pants, but I do like to see the math represented accurately.

        Regardless of the $25000 income discrepancy, I am impressed by this couple’s drive to improve their situation. Renting out their spare room, picking up extra work and selling their excess stuff are all fabulous ways for them to grow their stash. I will certainly use their example to strengthen my will power muscles and see what I can do to improve my family’s unique situation.

        • Harry Sit April 6, 2014, 8:22 pm

          The largest contributor to their paying off $100k debt isn’t cutting their non-rent expenses from $1,500-$2,000/month to $800-$1,000/month. It’s actually their $2,000-$4,000/month income from AirBnB, followed by dumping their existing savings. Cutting expenses helped. Selling wedding dress and gold helped. Credit card rewards? Relatively peanuts. AirBnB income drives by far. With raises and the AirBnB income, their total gross income is closer to $130k than $65k. Granted some people with $130k income still don’t do nearly as well as this couple. Still, $130k/year is more accurate than $65k/year. Maybe they meant per person?

      • Miki Yamashita April 6, 2014, 1:37 pm

        I love this response so much. Opportunities unique to your situation will arise but if you are too busy being a Complainypants you will not see them when they come your way!

      • Remy Marathe April 6, 2014, 9:17 pm

        “Never question the individual details of anyone’s accomplishments. Instead, figure out the mentality that they used to get their shit done, then adopt and adapt it for your own advantage.”

        Totally agree with that sentiment. But it does seem fair to question some of the basics.

        If someone got their shit done mainly by winning the lottery or inheriting a bunch of money, there’s only going to be so much you can learn from them.

        • cgkid April 8, 2014, 1:58 pm

          “Totally agree with that sentiment. But it does seem fair to question some of the basics.”

          Yeah, I’m not so sure about this one either. I lived in NYC for 8 years post-divorce/post-financial armageddon. I also clawed out of about $129K worth of debt at a MUCH higher rate than 6.9% by living in my truck for part of the roller coaster. Of course, back then there were no gurus otherwise I would have appreciated them more.

          Love you, MMM, but this is about the easiest 100k payoff possible, and living in Manhattan is not really a financial black hole for locals at all. We actually enjoy the reputation immensely. Just read “Cheap and Free in NYC” and you’ll save thousands of dollars. Check it out at the library, and you’ll save another $2.45. There are freebies everywhere and money is almost literally lining the streets for anybody with a pulse. I picked up trash almost everyday off the street and sold it later in the day – like a money-crapping landfill machine.

          There is money lying around absolutely everywhere in that town.

          Getting around is cheaper and easier than anywhere I’ve ever lived, and only fools own cars in Manhattan, so that’s not a sacrifice.

          It’s the housing that kills you, and this couple was living as close to free as you probably can in Manhattan for a 2bdrm/2ba. I also got hung up with the $2k – $4k in AirBNB income. Everybody knows that NYC has now cracked down on this, right? Think about it, you say that you made at least $24K in (now illegal) thin-air income + $32K in savings + heavily subsidized housing (add at least another $2k to that), and you’re suddenly talking about a $20,000 debt problem.

          Don’t want to discount it too much – I celebrate their victory and love every single Debt Obituary, and restructuring your life and achieving an important goal is no small potatoes. But, this submission over-characterizes the challenge, and a year to pay off $20k is fairly standard. Plus your reference to income disparity doesn’t really apply to this couple. This couple had a capacity issue that they discovered and filled with your blog and a calculator.

          • Frugal Frieda December 2, 2016, 6:48 pm

            Yes, is an old post, but people are still reading it and should be aware that not al airbnb is illegal. It’s illegal when you rent out your entire place for under 30 days, in which case it becomes a short term hotel. It is not illegal in any way to rent out a room in your home on a short term basis. Depending on where you live, meaning apartment, coop, etc., it may be against building policy, but that is building by building and is not the same as something being illegal. As long as you are living in the apartment at the time, totally legal.

      • TK April 7, 2014, 3:10 pm

        The MEDIAN Houselhold Income for Manhattan is $68k per year, which means that half of the people in Manhattan are living on less. Think about that when people say it is impossible.

        Again….$68k is the MEDIAN household income for Manhattan.

        • cgkid April 9, 2014, 4:53 am

          True, but I have never met anybody in NYC who wasn’t pinning down a solid side hustle – or at least with an option to exercise it easily.

          It’s really hard to compare the local economy to anything else most people have never experienced, and there is a massive cash economy that is being overlooked by most conventional metrics like MEDIAN income. It took me 2 years to really figure out what was going on, but there are a couple of rules to living in Manhattan:

          1. The City always wins – don’t try to fight it. You must reach a zen state with the city or you will not make it.
          2. Thou shalt hustle. When you figure out what’s really happening there, you’ll understand that extra money is super-easy. It’s like taking a cheetah to a petting zoo.
          3. Everything worth doing is probably somehow illegal, regulated heavily, or taxed into oblivion – act accordingly.
          4. The City hates outsiders but loves their money. There is a hack, scam, or workaround to EVERYTHING.

          Our couple sounds like relative outsiders to me that figured out what’s up with Manhattan. They turned what is normally a liability into their biggest asset – their apartment. I give them credit for figuring it out because a lot of people just don’t think this way.

      • ABC April 7, 2014, 3:33 pm

        How about a story where people have tried but it may not have worked out for various reason? A Sisyphus type story.
        Maybe they took most of their savings and paid down the student load. And then a partner lost their job and more than half the income is gone etc.
        There’s nothing wrong about inspirational stories. There are plenty of them and they fill a purpose. I prefer that several type of realistic scenarios are also brought to light.

        • Kenoryn April 9, 2014, 10:58 am

          Looks like this is the article you want:


          Except, of course, it doesn’t have a “it didn’t work out” ending. It has a “I learned a valuable lesson and pressed on with my goals despite the setback” ending. That’s what every one of those stories should look like, if there’s anything to learn from them. If the ending is “It didn’t work” – well, there’s no end date on this, so that really means “it got hard and I stopped trying”. The only thing to learn from that is what not to do!

      • Nathan April 7, 2014, 4:29 pm

        “Never question the individual details of anyone’s accomplishments. Instead, figure out the mentality that they used to get their shit done, then adopt and adapt it for your own advantage.”

        Hi MMM, long time reader first time commenting. This is so true. You can not get wrapped up in the details of how someone did something. For some reason that just gave me an AHA moment. I realized I fall into this trap quite often and it is demotivating at times. I am sure others do as well and may I suggest that you write on this in further detail.

        I would just like to share my story with others as I feel like it might be a little helpful to others who earn way more income than I do an still seem to struggle getting out of debt and/or investing or saving money. I am 25 and I have a very modest salary at this point. I went to college and got my degree in Psychology working as much as I could while in school to offset the costs. I graduated almost three years ago and I just found a job in my field six months ago. Fort the past three years I have been working as a server at a fine local restaurant making a decent amount. I also have the advantage of living with my dad rent free but I am still doing everything I can do get out of debt. When I got my job in my field six months ago my starting salary was 25,316. I also have kept my job as a server to increase the amount I earn to contribute to my debt. Every single penny I have earned at my salaried job has been put towards my student loan debt which is the only debt I have that hovers at around 33,000. I plan to put every single penny I earn there toward that debt until its gone. My other expenses are easily covered by what I earn working as a sever (food, car insurance, gas, phone). These are the only expenses that I allow myself. New clothes, new shoes, or anything else that is not needed is not purchased. If I continue on this plan I will have my debt wiped out in a little over two years. So I guess what gets me is people who earn 100,000k a year and struggle getting out of debt is mind boggling. If I earned that much I would be out of debt well within a year, probably six months. I am following what is written on here. My debt is an emergency and needs to be treated as such. I am certain that I would have been more lackadaisical on these debts if it wasn’t for finding the MMM site (which I found because I am a reader over at raptitude.com) I thank you so much for the insight, motivation, and general badassidty that you are passing on to the rest of us. You have inspired me, and gave me hope and confidence in my financial future more than I have ever had!

        • greg April 7, 2014, 7:29 pm

          As a mustachian soon approaching independence well before 30 — even with the anti-complain-y-pants attitude — I still find myself much less inspired by the insights I saw here.

          While the achievement is awe-inspiring even with the absurdly-subsidized rent, I personally find that (for me) the rhetorical mechanisms used to champion mustachianism here sounded a bit too extravagant to be meaningful and found them to detract from the narrative as a result.

        • Jesse April 14, 2014, 7:09 am

          These “random” opportunities are ubiquitous in the US… not just in Manhattan. My wife and I found a gem here in Indiana. Being a teacher (though the program is also available to police officers and firefighters), I was able to purchase a home at a 50% discount with the stipulation that we live in it for 3 years. There are other factors – search “Good Neighbor Next Door” – but if I was a Complainypants, I would have just bitched about the downsides and would not have seen our net worth increase by $60k while we did absolutely nothing these past 3 years.

      • Drake May 7, 2014, 11:06 am

        New reader here. I really enjoy the site.

        Loved this paragraph too: “Never question the individual details of anyone’s accomplishments. Instead, figure out the mentality they used to get their shit done, then adopt and adapt it for your own advantage.”

      • Jeremy October 7, 2015, 9:29 pm

        I can’t imagine reading all the nitpicky criticism MMM. Thanks for staying positive and nudging our culture in a better direction. I’m moving on after these comments to the next great post. I started a few weeks back and I’m now only a year and a half away from being all caught up. I love this – “Never question the individual details of anyone’s accomplishments. Instead, figure out the mentality that they used to get their shit done, then adopt and adapt it for your own advantage.”

    • Janson April 6, 2014, 1:29 pm

      While all advertised rentals are at market rate, MOST rentals in Manhattan are below market (see the 2011 NYC housing survey). I’ve had four Manhattan rent controlled apartments and never paid more than $1400/month, and, of course, none of them were advertised. With one, I saw a painter moving supplies into a building and in exchange for a $300 consideration he connected me to the owner who was happy to rent to me (a few years ago) for $780/month, the max he could legally charge. Of course, it you just want to go retail and point at something you want, it will cost a lot.

      • Wesmon April 7, 2014, 12:04 pm

        “for a $300 consideration ” I just freakin’ LOVE that line! That is so awesome.

        I asked an 87 year old jewish millionaire VC guy years ago, how do you manage to charge companies a finders fee off the top of investments you get them, get equity, AND get a consulting fee? His answer “I just ask, if they so no then they say no. It doesn’t hurt to ask.”

        • Kate in NY April 9, 2014, 6:16 am

          I don’t mean to be all Woody Allen in Annie Hall about this, but what does this millionaire being Jewish have to do with it? I guess I am a little sensitive, but comments about old Jews and $ do make me a tad cranky.

          • Alex in MIA October 8, 2014, 3:08 pm

            Because without the octogenarian Jewish NYC reference, you might read that in a New Yawk accent, where it’s not funny, but in a Yiddish accent, it’s hysterical. :)

      • SMS April 23, 2014, 8:20 am

        I’d love to learn more about how to get a rent-controlled apartment. I’m working in NYC currently and living with my parents, but the $0 rent is made a bit less attractive when you consider my 1.5 hour commute (each way!) and the $320/mo in bus fares to get to/from work. I’d love to cut my commuting time If I could get a place in Manhattan under 1k/mo.

    • Dave April 6, 2014, 2:38 pm

      I live in a 1br, 1ba in Manhattan (Upper West Side) for $2450 per month (I share it with my sig other, so that is $1225 for my half). I will be financially independent within the next 5 years and I have never made more than $60,000/year.

      You find advantages wherever you can – no need to write off being able to save in Manhattan just because of an advantage someone else has that you don’t.

      • cgkid April 9, 2014, 8:09 am

        “no need to write off being able to save in Manhattan just because of an advantage someone else has that you don’t”

        Absolutely! I think quite the opposite. EVERYBODY has an advantage. The problem is we lack any type of self-awareness. EVERYBODY has power, but we tend to strip ourselves of that power or don’t think about how to make a liability into an asset.

        There are so many ways to save $$ in Manhattan, I could never even list them. There is absolutely no reason to have cable and even internet is optional with so many hacks w/in the city. A car? Seriously? Food is actually insanely cheap once you figure it out…. World class (free) entertainment abounds and is dying for your attention.

        Despite what everbody thinks, I actually found life in NYC to be really slow. It’s just that everybody is working twice as hard for half the result (hence the slowness). I can accomplish about 10X the amount outside of that city because everything is so grindingly slow in NYC. But, the slower and steadier you go, the better off you will be there.

        Find your hustle and stick to it. There’s no better place for getting out of debt than NYC.

    • hmmmmm..... April 7, 2014, 4:12 am

      The couple initially (before raises) made close to $100k a year gross if you take into account city and state tax, and they make an additional $24-48k tax free (assuming they don’t report it) from renting out their room on AirBNB which equates to $32-64k gross. So it sounds like their equivalent gross all-in including raises is closer to $170k+, which makes their loan paydown of $67k (after correctly draining emergency funds earning 0%) in 9 months, while still laudable, much less impressive than the headline implies.

      Good job nonetheless.

    • Frugal mom April 7, 2014, 12:57 pm

      I think its great they were able to get out of debt by making some mindful decisions and being proactive rather than reactive. At some point in a persons’ life, you need to really assess why you have what you have purchased, do you really need it, can you live on less, and if you cannot, why not? Are you trying to maintain that “sucessful” front so others can see? Or are you truly living mindfully.. only taking what you need, giving back, etc.. You don’t need much to live on, if you take the time to assess your true needs, and ignore those impulse purchases, and the, “wants.” So what if you don’t have the new iphone? Do you really need it, or is the 4s enough already? So what if you don’t have the new car.. does the old one keep running, and do you own it? Bingo, you just saved a monthly payment. By ignoring our societies desires to put individuals in a “catagory,” you will live freely, happier, lighter, and be truer to yourself, at least that is what I have found works for me.

    • Mike and Lauren April 7, 2014, 6:04 pm


      We lived in Manhattan for 2 years. Our apartment was $1470/mo midtown east on 56th and 2nd. Studio, but still.

      It was the first apartment I found on craigslist on my first day of looking.

      Clearly we got lucky, but it’s not impossible.

    • Max April 15, 2014, 9:29 pm

      “You need to make $350k here just to stay afloat – and at that level, you’ll still be far from rich.”
      This is an exaggeration but if you make $150k in New York City, you rarely eat out or spend money on entertainment, and live in one of outer boroughs or Jersey City, you’re just getting by, believe me, because I’m there. You may actually be doing better if you make less money, for instance, 60k or 70k, because then you qualify to buy a HDFC coop and things like that.

      “Rent: $1,695 for a 2br/2ba apartment in Manhattan. (Partially subsidized housing through my husband’s postdoc).”
      The drastic unfairness of it makes the article hard to digest. That is the under the market rate for an unsafe 350sqft pest-infested studio in Manhattan. Granted there are many people in subsidized and rent stablized or rent controlled situations in Manhattan, but unless you’re in this cabal, you’re paying market rate, and the market rate is twice that at least. The normal working shlep couple in NYC pays twice that to commute in from one of the boroughs or Jersey standing shoulder-to-shoulder in the subway.

      • Max April 16, 2014, 10:30 pm

        A current article in the NYTimes — http://www.nytimes.com/2014/04/20/realestate/the-east-village-in-the-thick-of-things.html?hpw&rref=realestate — has a much more realistic picture of what rent is like in Manhattan.

        • Kevin BK April 17, 2014, 8:07 am

          This article shows what rents are like for a certain class of people who are accustomed to a very specific standard of living.

          The subject paid someone $5k+ for the privilege of “discovering” one of the most well-known large EV apartment buildings.

          I daresay these people are not in touch with the spirit of this blog.

          There are a great and many people in Manhattan who have amazing deals on rent, or have found other ways to work the system to live frugally. And it’s not just luck, housing projects, rent control, etc.

          Like every other worthwhile goal, you have to have the right mindset, make an effort and have some patience. See my post further down in the thread for some notes.

    • Emmers April 18, 2014, 9:50 pm

      Shouldn’t the effective value of their rent subsidy be added to their income, if this article were going to be intellectually honest?

    • Dave July 31, 2015, 2:44 pm

      Whiny McComplainy Pants here.

  • Dave April 6, 2014, 11:18 am

    That’s awesome! My wife and I started our journey last year – sold a few things (including a 35′ RV), cut down on expenses are are on our way to financial independence. It’s great that their family is supportive. Not all of are family is…some think we’re a little crazy…but we just keep on going.

  • postconsumerlife April 6, 2014, 11:18 am

    I think the biggest barrier to financial independence while living in big, expensive cities is being surrounded by an expensive norm.

    In the San Francisco Bay Area where I live (cheaply and well)—which according to a recent news article now has the nation’s highest rent—it’s easy to get caught up in the restaurant-eating, big-ass-car-driving, daily-latte-sipping as a default way of life. When everyone around you is living an out-of-proportion lifestyle, it’s easy to THINK that living frugally can’t be done here.

    Like this couple has shown, that’s just a matter of PERCEPTION. It’s great to have examples like these to show that’s not the reality.

    I do have to say, though, that I really hate the ongoing credit card promos, in spite of your frank disclaimers. Credit cards, even when used responsibly, are part of the problem. Sorry, Mr. MM. Love pretty much everything else.

    • Justin April 6, 2014, 11:38 am

      How is a responsibly used credit card part of the problem? That really doesn’t make sense. Scores of people earn hundreds or even thousands of dollars in free money every year by simply using a credit card and not being an idiot.

      • Doug April 6, 2014, 4:09 pm

        That’s consistent with my observations also. I’ve had a credit card since 1982 and it’s never been a problem. Most of the time I use cash or debit card for purchases, but credit cards are very useful for online purchases. Not only that, but you can get better deals online. For example, have you used http://www.greyhound.com ,or http://www.greyhound.ca in Canada, lately? They have cheaper fares if you book online and print out your own ticket. Oh, and for the record I ALWAYS pay my credit card bill on or before the due date to avoid interest charges. How’s that for debunking that old urban myth about credit cards being a problem?

      • Mike M April 7, 2014, 1:27 pm

        I don’t think the problem are people who responsibly use credit cards. It’s the majority of credit card users who *think* they’ll responsibly use them, but don’t. And there’s the behavioral aspect – are we more likely to pick up three extra items we didn’t really need at the grocery store because swiping a card is easy? Would we spend a little less if we had to trouble ourselves with cash in some places?

        Now my wife & I earn almost $500 a year from credit card rewards. We could do a bit more to maximize our reward return, but eh… it doesn’t seem really worth it. But the bottom line is credit card rewards never made anyone rich. Ever. Rewards may help a touch, but far more often people get lazy with cards and overspend.

        So when people ask me, I say “credit cards are the devil.” And if that person is smart enough to say, “but hey, I pay it off every month, shouldn’t I get some rewards?” Then they’re smart enough and disciplined enough to see past the initial, simple answer.

      • ike April 12, 2014, 9:20 am

        … you can save more shopping anywhere that refuses credit cards or charges different prices for cash/debit and credit.. Aldi’s (cash only grocer) often is half off compared to other grocers, and around here a lot of gas stations charge $.10 less per gallon to cash paying customers

    • Mr. Money Mustache April 6, 2014, 11:50 am

      I hear you, Post Consumer – I do try to keep the promotional stuff down because it can clearly take away from a blog’s message.

      But I totally disagree on credit cards being any sort of a problem for responsible people. I absolutely love the things and I have put 100% of eligible spending on cash-back credit cards for at least the past 15 years.

      They are simply a loophole in our system that logically should not exist (prices should just be 3% lower and we should all pay with no-fee debit cards). But if they exist, it makes sense to use them to the fullest extent.

      However, it is definitely a shame that they suck vulnerable people in and destroy billions of dollars of their work in the form of interest payments.

      Given the choice, I’d give up my own few thousand per year in CC rewards in exchange for nobody getting into credit card debt. I’ll let you know if the credit card companies ever join forces and present me with this offer. :-)

      • Chattanooga Cheapster April 7, 2014, 6:45 am

        You could argue that if credit cards went away “supply and demand” would just suck up the 3-6% that they add to the retail cost of things. Changing something that ubiquitous would just have a corresponding market correction. Same logic many economists use when saying tax cuts on the largest consumer population only work in the short-term. Eventually a market correction just adjusts prices upward.

      • misterfancypantz April 7, 2014, 2:26 pm

        MMM… It’s a common misconception that prices are artificially higher due to credit card usage, when in fact the majority of people use credit cards like you as a convenience mechanism, as technology has improved over time credit cards have basically replaced checks as the most convenient form of purchasing goods and services as both are actual a form of credit, but credit cards shift the credit risk away from the merchant and to the issuer which reduces costs especially to smaller mom and pop style merchants, it provides protection to the consumer as well, so in reality credit cards actually reduce prices rather than inflate them, there is the cost of fraud prevention which needs to be accounted for, but compared to the total transaction base it is small and is much smaller then the check fraud costs the credit/debit cards generall replace. Merchants use the credit cards fees and excuse for higher prices, but as you can read below it is not really based in any substantial fact, but simply an excuse.


        The link I provided above is of some academic research that explains in great detail the economics of credit card usage in regards to both transactors (people like you and I) and revolvers those who carry balances. This particular study is detailing the lack of a link between credit card pattern usage and bankruptcy declaration, but it is good representation of how credit card usage is not a price inflator, but more likely a price deflator.

        I have another study from the Federal Reserve that compares the cost of transactions between debit cards, credit cards and cash; you would be surprised to find that debit cards are more costly in general to merchants in most cases due to the fee structure and transaction sizes. If you’re interested I will try to dig it up as well.

      • Ex-Sgt Pepper April 12, 2014, 6:36 am

        Mrs ex-Sgt Pepper and I are more of the “Traveling Mustachian” breed, and we love the travel rewards of using our Amex and United Mileage Plus visa cards. We’re sitting here in S Africa right now, and saved $2800 by using points accumulated over 2-3 years. Otherwise we probably wouldn’t have come here, and we wouldn’t have experienced giraffes in our driveway and zebras on our porch! And warthogs and kudu in the 2-mile dirt road that we use to walk to the local market. The key is that, unlike our younger, suck-ier selves, we had the discipline to use them wisely, i.e. we don’t buy shit we don’t really need and we pay them off in full at the end of each and every billing cycle.

    • morphball April 6, 2014, 12:21 pm

      San Francisco does have the highest rent, yes. The outlying areas, no. Many coworkers and friends of mine who live in SF live quite frugally because of the rent prices.

      (You could argue that they move into the outlying suburban areas, but even then, you can only go so far before BART and CalTrain stop being effective, as they’re all carless.)

      • ___ April 6, 2014, 7:19 pm

        In my experience in SF, you can find cheap living situations in the city itself if you ask around. However, any neighborhood in the greater bay area that has easy access to Caltrain or BART are equally expensive once you count in the additional cost of Caltrain and/or BART. You just tend to get more space for the money. If you drive, you can find cheaper rent even farther from the city, but then you’re spending money maintaining a car, paying for gas, spending 1-2 hours a day sitting in a car, dealing with the stress of California traffic, and parking.

        My solution to all this was buying a used electric motorcycle that was pretty much only suitable for city traffic and using that to get around the city itself. It was $4k at the time (the same model motorcycle, a 2010 Zero DS, is considerably cheaper now), plus $100 a year insurance (it’s classified as a 0cc, which is a loophole in the current insurance climate). Electricity to charge it was pennies a day, free when I charged at work. Cheaper than public transportation by far, more fun than cycling (IMHO) and faster too.

    • rjack April 6, 2014, 1:44 pm

      There must be enough MMM readers in major cities to create Meetup groups. Wouldn’t that help lend moral support and learn new city-specific tips?

      MMM, maybe you could create a separate page of MMM meetup groups by city and promote it here?

      Just an idea.

      • JP April 7, 2014, 6:37 am

        Hey Rjack,

        Check this out. I think it MMM is a step ahead here: http://www.mrmoneymustache.com/forum/meetups-and-social-events/

        • PFgal April 8, 2014, 4:34 pm

          The Boston group has met a bunch of times. It’s awesome to hang out with other like-minded people. If the forum doesn’t have a thread yet for your city, you should definitely start one!

          • Scott & Kenda April 12, 2014, 6:18 am

            Hi PFgal, My daughter lives and works in Somerville/Cambridge, I would love to get her hooked up with you Bostachians. I’m gently nudging her in the mustachian direction, unfortunately I sucked at this when she was in her formative years (but was great in other ways, at least). Where can I point her to? She’s been reading and enjoying the articles I’ve forwarded to her so far… Thanks!

      • Wesmon April 7, 2014, 12:08 pm

        That’s a nice idea. I just might try one where I am.

        Drink a few beers at home, get a good buzz on. Come to Joe’s bar and order water with 15 other people.

        Just kidding, as it warms up here we have a ton of great state parks where we can picnic.

    • Steve April 6, 2014, 1:52 pm

      High Five postconsumerlife — I also live in the SF Bay Area and started waking up AFTER I bought my wife a new Lexus SUV last Summer. Amazing what good old fashioned AWARENESS can do.

      Morphball — Those outlying areas in the SF Bay Area have to be pretty darned outlying. I live 28 miles south of SF and the rents are Facebookian high. Not complaining. We bought our house in 2003.

    • allison April 6, 2014, 3:44 pm

      Yes, thank you for pointing out that the SF Bay Area is at least as expensive as Manhattan. Some of the nation forgets that there is any culture/publishers/luxury (fill in the blank) west of the Mississippi. The rent this couple paid for their 2bed/2bath in Manhattan didn’t even faze me. We pay close to $2000/month for our 3 bedroom/2 bath and we live 40 minutes outside of SF. Interesting and inspiring article. Everyone’s situation is different, sure, but there’s a lot to be learned, regardless.

      • Jb April 7, 2014, 6:37 pm

        Oddly enough, for you SF folks, the local public radio (KQED) had a blip today that people in SF are getting evicted for renting their rent controlled housing on AirBnB.

        Except for high costs round here in the Bay Area the salaries are off the hook, I never dreamed my household would make this much money and I don’t know we could do that anywhere else. It’s a big reason why we haven’t left. Just gotta be smart here, my two mistakes were buying a home at peak and buying a new car. But they can be overcome and all other advantages taken. Nothing like this couple in the article though, they are truly badass and I strive to do better.

    • Jeffrey April 8, 2014, 1:02 pm

      agree with you about spending lifestyles. people are obsessed with eating expensive food, $50 brunches, and dropping lots of money at bars. My wife and I live in Jersey City and had to limit ourselves to 1/2 nights per week takeout (chipotle for two if $15), drinks maybe once a week, and dinner every other week.

      On another note – they mention the limitations of Public Student Loan Forgiveness. The 10 years of payments do not need to be consecutive – as long as 120 payments are received while under employment of a non-profit, government / state, or similar organization. My wife is currently doing this as her job in Manhattan is rewarding with tons of time off and she can still work per diem for extra money. Every situation is different

      • Josh Gordon April 10, 2014, 12:17 pm


        I was wondering that. I am 31 have about 45K of student loans. I am in my 7th year of working for non-profits, but it has not been consecutive (worked for a for profit for 2 years) or for the same organization. Also, I went back to school and received deferment? Do those things mean I start from the beginning again or pick up where I left off?


      • JC June 5, 2014, 1:10 pm

        Jeff – keep it quiet about Jersey City – used to be a secret but is getting out and now people are moving in – haha. Was a cheap Brooklyn but in 5 years probably will be just as expensive in the downtown-waterfront

        Agree with others’ comments on the rent though for this example. Reasonable 2bed in Manhattan is 3500 and maybe 3k if you are on 1st ave or far on the west end. Just doesn’t make sense for most to live in NYM unless making $100k+ a yr or have good career opps or certain industries like finance

  • Carlos April 6, 2014, 11:24 am

    It also shows how much easier it is when both parties in the couple are on board.

    • Curtis April 7, 2014, 8:47 am

      That was my biggest take-a-way: They worked together to accept their combined finances as a couple, as one unit. It wasn’t HER debt, it became OUR debt. They pooled resources and accomplished a great task. Bodes well for their future as a newly married couple.

      I’m just not on board with the whole separate finances thing for married couples. But that’s a whole different thread.


    • Mike M April 7, 2014, 1:28 pm

      So, so true. Any journey to financial independence really requires both people in a relationship to be fully on board.

  • Sheila April 6, 2014, 11:29 am

    The property tax rates for condominiums in NYC are ruinous. We are currently paying off a $150K mortgage and our tax bill exceeds our mortgage payment, amounting to almost $12K a year. It is tax deductible, but puts a big crimp in our monthly income. Subsidized renters and rent-controlled/ stabilized tenants are in a much better position on a month to month basis. I’m pretty sure that renting a room in an apartment would violate most leases and that monthly rental income needs to be reported to the IRS.

    • Marcia April 6, 2014, 1:51 pm

      New York is just bad for this. My inlaws live upstate. You can buy a house/ condo/ duplex for quite a bit less than you can rent one for – but the property tax is really high.

      I mean, the property tax on a house in my inlaws’ home town would be almost the same as my prop tax here in California. Same size house, but the price of the house here is 6x the price in NY.

      In some areas, I’d guess that if you owned a house and rented it out, it may barely pay for upkeep and prop tax.

    • Frugal Frieda December 2, 2016, 7:01 pm

      Renting a room in your apartment is not illegal. In fact New Yorkers have very protective laws concerning housing because the expenses can be so high. We have something called the “Roommate Law”. Anyone in NYC, is guaranteed the right to ONE adult roommate, AND that adult’s children. No rental, no coop, no condo can override that — it’s the law.

  • Gabtastic April 6, 2014, 11:35 am

    Hey MMM,

    What are your thoughts on Public Service Loan Forgiveness generally? Is it advantageous for some? For instance, if the minimum time for someone to pay off his/her loan was 7 years (this is throwing every extra penny at the debt), would it be better for him/her to pay the minimums for PSLF for 10 years, have the debt forgiven, and otherwise live a Mustachian life?

    • Responsible Adult April 6, 2014, 12:00 pm

      I am not familiar with PSLF but the description of that option in the article pretty much stated the problems and good reasons not to go that route. My understanding of the philosophy of Mustachaism is that you should take responsibility for your debt an finances. Not try and hide from them.

      Or do I misunderstand the purpose behind PSLF?

      • Davin April 7, 2014, 10:07 am

        You might misunderstand the purpose of the Public Service Loan Forgiveness program. The PSLF is set up to encourage people to work in certain government jobs like social services when they could probably make more working in the private sector. The ethics are similar to taking a tax deduction for having kids or something along those lines. Whether or not this is a sound financial move depends entirely on your situation.

    • ATXbikette April 6, 2014, 1:17 pm

      While I think they are a lifesaver for many people, one important thing to remember is that the terms of the agreement are set by the government, and they can change at any time. In fact, I read on Huffpost they are thinking about changing the terms of the agreement, basically setting a cap on the amount the government will pay off, and that is setting up some people (mainly people like med and law school graduates) with a huge chunk of debt to pay off on their own. Many recent graduates are not happy, counting on this program to pay off their loans. While I was in college I took advantage of a loan forgiveness program from the state of Texas, it no longer exists for private school students. So, I would say attack the debt like you would any other because the government can change it’s mind and since it is a loan, you are still responsible for it.

      • Jimmy April 8, 2014, 8:23 am

        According to the department of education, the proposed cap of $57,500 only applies to new loans on the PAYE program as of July 1, 2015. If you are already utilizing PSLF in conjunction with another eligible repayment program, such as IBR, you will be grandfathered in to the prior terms, i.e. no cap.

        As someone married to a doctor with over $200K in loans (and working in the public sector), I have researched this exact topic to the end of the earth and back.

    • Andy April 6, 2014, 1:17 pm

      I think the key for the loan forgiveness is to run the numbers for your own situation. I have a friend with somewhere in the realm of $200k in law school debt. With something that sizable it ends up being advantageous to ride out the 10 years of public service and like you said, live a mustachian life. For someone with a smaller loan, it may make sense to just attack it like the couple in this case study, but you won’t know for sure until you do the calculations.

      The amount you pay while you’re on the forgiveness program is also tied to your taxable income so by maximizing things like 401k/IRA and other tax deductions, you can limit the monthly payments that you have to make. So if you do end up going for the forgiveness, you can end up putting away a good chunk in savings and just look at the monthly payments as more of a required expense with a finite timeline than an actual debt that you need to pay down. The only gamble is that the program disappears at some point, but it seems fairly unlikely that they’d revoke it for people that have already been on it. It’s more likely that at some point they’ll just stop letting new people enter the program.

    • Jen April 6, 2014, 2:05 pm

      Re: student loan forgiveness: I have been working at various non-profits since 2007, and will be eligible for forgiveness in Oct 2017. I currently have $10,500 in federal loans @ 4.5% (just paid off my private loans this month! Woohoo!). Assuming I stay in the NPO world for the next 44 months, at my current payment rate of $143/month, I will have paid just under $6,300, and will have >$5,000 worth of loans forgiven. If the government reneges on the plan, or if I decide to switch careers, I have plenty saved up so that I can pay off the remainder in one fell swoop and still have a healthy emergency fund and investments.

      Other benefits of non-profit jobs: my employer matches 4% on top of giving me an additional 4% of my retirement savings, has a tuition reimbursement plan, pays for my cell phone & any job-related expenses, including car mileage, lets me work from home, and pays me a salary in the top 5% of American wage earners.

      • Mrs Oz April 12, 2014, 12:47 am

        @Jen please share what type of work you do. I am extremely curious!

    • Wes April 28, 2014, 5:03 pm

      I certainly think PSLF can be very advantageous vs. paying everything off in a hurry, depending on the scenario. Obviously, you need to be on Income Based Repayment or something similar and minimize the heck out of your monthly payment, which, as astute observers have already pointed out, can also be controlled/manipulated by you. Prime example: Many government positons, in addition to a standard retirement plan, also offer an optional 457b deferred compensation plan. A good mustachian thing to do is max out your deferred comp (invested in something like VTSAX or similar). Last year’s cap for 457 plans was $17,500 dollars. So that shaves $17,500 off your adjusted gross income (taxable income). Not only did you reduce your tax exposure by doing this, but since IBR payment amounts are based off AGI, you likely just lowered your monthly loan payment! Depending on principal amount, your remaining monthly loan payment will likely be all interest (no principal), which is usually a bad thing, but since everything is getting forgiven at the end of ten years anyway, this works in your favor because up to 2,500 in student loan interst payments is an above the line tax deduction, which, of course, further reduces your AGI and further reduces your monthly loan payment! See the synergy here? Meanwhile, after having maxed out your tax-advantaged accounts, you are funding your taxable account(I like VTSAX, like MMM), or investing in real estate, etc. To cap it all off, a real beautitul thing about a government 457b deferred comp plan is that you won’t have to wait until you are 59.5 to access the ‘stash! You will be allowed to access your 457b ‘stash upon separation from the government job, regardless of age. My point is, there is a LOT of synergy to be had with PSLF, IBR, governmental 457b plans, the income tax code, and your monthly loan repayment amount. If you can get your AGI low enough I believe you can even get a tax credit for funding your IRA. I’m not saying this is for everyone, but it’s worth running the numbers to see how things may pan out versus assuming that your hair is on fire from your student loan if you can get PSLF forgiveness.

  • nmdude April 6, 2014, 11:39 am

    BOOYAH! What a great story of accomplishment! I’d love to hear what their savings balance is in 12 months. Keep going, kids!

  • TallMike April 6, 2014, 11:43 am

    I am in awe. What guts! Such discipline! Major kudos to this family; thanks for sharing this story.

    I think I am most impressed by how *widely* they looked for so many different ways to save, earn, and make extra payments. Nothing was too outlandish; it was the cumulative effect that got them there.

  • HealthyWealthyExpat April 6, 2014, 12:05 pm

    What a great story! If you want to be different from the masses, you have to act different from the masses. One other point that I noticed was the reference to a simple wedding and the sale of the wedding dress. Fairytale weddings can be a HUGE drain on the finances, and wedding dresses that are used only once and then stuck in the closet to be rarely looked at (and never worn) again are a big waste of money IMHO. When we got married, I rented my tux and my wife rented her dress. It was a really nice wedding with over 300 guests at the best restaurant in town overlooking the Mekong River in Vietnam. It cost a grand total of $2000. Ah, but the guests all brought money. How much? About $2000!

    Kudos to these people for finding a way to have a simple wedding and enjoyable honeymoon that they could feel good about. It can be done wherever in the world you may live.

  • Karen April 6, 2014, 12:13 pm

    Great, inspiring story!

  • Aarchman07030 April 6, 2014, 12:22 pm

    I honor these kids for their self-discipline and determination. A life-long New Yorker, I know how difficult it can be to resist the siren call of the countless insatiable, money-sucking temptations offered by NYC.

    Theater and restaurants beckon, seducing you into thinking that “world class” entertainment is one of the reasons you put up with all of the City’s hardships. Walking down the street tests the will-power of anyone trying to resist the urge to consume, with countless stores selling truly beautiful and unique items.

    The truth is, though, that the sheer size and diversity of the city provides just as many very affordable alternatives–delicious and inexpensive neighborhood restaurants and off (and off-off) Broadway theaters provide a universe of culinary delight and entertainment–you just have to make the effort to find it. And–yes–cooking at home offers its own financial and gustatory rewards.

    Ultimately, though, I had to move across the Hudson River–to Hoboken, NJ–to escape the relentless drumbeat of acquisitiveness generated by NYC’s retail landscape. I go into the City when I want/need to, but largely spend my days far from the shop windows full of the latest “must have” items. For me, the silence is golden–in every sense of the word.

    • insourcelife April 7, 2014, 7:53 am

      NYC sure is tempting. I lived in the area for a while but luckily it was during my “broke” days where all I could afford was a subway ride to get to Manhattan and maybe a 2 cheeseburger meal with water at McD’s ($2) or a hot dog from a street vendor. Nothing teaches you to appreciate what the city has to offer as not having the money to spend on all the crap they sell there. For me it was about taking a train in and spending the day walking the streets, taking in the sites and sounds, going to museums on free days, taking the free ferry to Staten Island and back, going rollerblading in Central Park and hundreds of other things that you could and still can do in Manhattan without spending a dime. Despite the fact that we can now afford to do pretty much anything we want, we still tend to do similar free activities when we visit NYC. Sure, we’ll go and see a Broadway play and upgrade to a nicer meal than a cheeseburger once in a while, but you really don’t have to spend a lot to really enjoy what Manhattan is all about. The vibe and the energy are all free!

  • Emily April 6, 2014, 12:28 pm

    I love success stories like this. I’m currently working on almost $40,000 in student loans (down to about $31k now) and I make $100,000 a year. My numbers aren’t nearly as impressive, but stories like this are definitely motivational. I’m hoping to finish paying the loans off at the end of this year. (I did take off this last month from paying the loans to put $5500 into a Traditional IRA for 2013 before the cut off date, getting me another $825 in tax money back. I also max out my 401k and HSA contributions each month which lowers the amount I can put toward the loans by over $900 a month but it is worth it!)

    Also, I’m glad to see that the MMM household watches Cosmos!

  • Alan April 6, 2014, 12:49 pm

    Congratulations on the savings! However, there’s a pretty significant chance that renting the extra room on AirBnB puts their subsidized apartment at risk, as AirBnB rentals are almost certainly in violation of the lease.

    A $1700 2Br/2Ba Manhattan apartment is a major subsidy, too— there are essentially no apartments of the same layout available for less than $2700. The apartment subsidy is effectively a post-tax raise of at least $12,000.

    That said, one definitely can save a lot of money in NYC— salaries are high, there are neighborhoods in the outer boroughs where rents are reasonable relative to salaries, and, as opposed to many expensive areas, one genuinely doesn’t need a car to live a full life— in fact, a majority of NYC households are car-free, and NYC is an American innovator in high-quality protected bike infrastructure.

    • KR April 6, 2014, 2:29 pm

      I rent a large one bedroom, the entire top floor of a really nice brownstone, for $1600. OK, it’s not 2 bed, but it’s huge, with skylights. The secret? Move above 110th street to a “less desirable” neighborhood. (Although unfortunately that cat’s out of the bag now and lots of people are moving uptown.)

    • KR April 6, 2014, 2:42 pm

      I’m impressed with this couple! I started following this blog a couple years ago and found ways to cut back drastically, but still spend more than that, just me.

      One thing I’m not sure people take into account when they think about the “high cost” of Manhattan is the simple fact that you don’t need a car here. That means no gas, no insurance, no maintenance, all those annoying charges that add up when you’re maintaining a vehicle.

      One commenter mentioned how we’re bombarded with beautiful things to buy …. that actually acted the opposite way with me. There’s so much to be had, it’s over saturation, and I feel very little temptation.

      I have two friends who live in Queens and retired in their 40’s. He mentioned to me once that they couldn’t have done it if they lived in the city proper. That really made me think, and about eight years ago I took the plunge and moved up to the 140’s, by City College (aka Harlem). Huge apartment, top floor of a brownstone, $1600., landlords have never raised it. It’s helped me save a TON.

    • Jessica April 6, 2014, 10:56 pm

      I used to live in Manhattan. Yes, you can live in a decent space with high middle income. Transportation is dirt cheap ad commute times are next to none.

      The big issue I have with this report is the AirBNB use being their ticket to fast freedom. This isn’t a couple being ‘smart’. This is a couple breaking the terms of their lease (renting a room for financial gain). A subsidized apartment no less. if their landlord is to find out he can take them to court and recoup all of the illegal rental money.

      • Peter H April 7, 2014, 1:19 pm

        Also, whether or not it is in the lease, using Airbnb is (stupidly) illegal in NYC. In order to rent for less than 30 days at a clip, you need to be a licensed hotelier, which is basically impossible to get.

        • Jessica April 7, 2014, 1:45 pm

          Right. I’ve read it’s hard to enforce, but it’s also for the safety of the neighboring apartment renters. The couple would have to essentially be giving out a pair of keys to enter the building (not just the unit) to over 40+ random short tenants.

          I really would like to read a response from the couple addressing this because while I’m all for extra FI schemes and tips (airbnb is great for the right person), meddling in illegal and unethical activity to get there is questionable.

          If it’s too good to be true, it probably isn’t.

        • AKstache April 8, 2014, 11:42 am

          Peter – you bring up a valid point. But according to this NYT article:

          “In most residential apartment buildings, renting out your space for less than 30 days is illegal, unless you are present when you have that visitor.”


          Unless I am mistaken, they were present when they rented their extra room, so technically it is not illegal.

    • sara April 8, 2014, 7:03 am

      Another question on the AirBnB piece: Are they paying appropriate income taxes on their rental income from AirBnB? Given their stated incomes and lack of mortgage or children, the marginal tax rate on additional income for them must be pretty high, and I’m betting the $2-4k Airbnb is pre-, rather than post-tax.

      More generally, what’s the Mr. Mustache position is on whether people should report and pay appropriate taxes on under the table income? (My take is that you should pay it for both moral reasons and because it’s not worth the potential hassle of getting caught, but I know I’m more risk averse than the typical reader here).

  • Alan April 6, 2014, 12:52 pm

    Oh, and in many outer-borough neighborhoods, it’s traditional to leave unneeded goods on the sidewalk on weekend mornings— I’ve found many useful things while out walking and ‘shopping’. Just yesterday, I got a freshly dry-cleaned J. Crew shirt that fits perfectly (I did, of course, bake it in my oven to kill any possible bedbugs).

  • Naners April 6, 2014, 1:14 pm

    Another Mustachian NYC dweller here! Yes, it’s more difficult to have a high savings rate here but not impossible. Hope to hear other NYCers weigh in with their favourite frugality hacks. Here are some of mine, biased towards a yonger lifestyle:

    – no need to skip all eating out, just focus on delicious ethnic foods. Chinatown is a personal fave: $6.50 for a huge bowl of noodles or $15 for enough dim sum to leave you stuffed.
    – while in Chinatown, pick up your produce. Much cheaper and fresher than grocery stores.
    – live in a working class neighbourhood for cheaper rent and groceries and friendlier neighbours. I love my nabe of Kensington south of Prospect Park in Brooklyn.
    – hit happy hour for after-work drinks.
    – pick your favourite museum and get a membership. $70 buys me all the modern art I could possibly want for a year as well as special access at certain times of day to avoid the crowds.
    – concert tickets for great but smaller bands can be had for $25.
    – personally Costco hasn’t been worth the membership fee: I find that Trader Joe’s and Target have comparable prices with less hassle to get there and no fee.

    Not quite sure things will be so easy once kids arrive but I imagine there are ways to make it work.

    • Andres Salomon April 6, 2014, 1:41 pm

      I’m actually surprised that Costco comes out that far ahead. We do bulk orders through a bulk wholesaler here in the PNW (combined with other neighbors, so the delivery cost is free). Bulk staples and produce is typically 1/2 the price of what you find in the bulk section of our local grocery stores. These places seem to cater to housing coops, dorms, etc (as well as store deliveries). I’d be surprised if there wasn’t one near MMM’s location.

      I lived in NYC for a year, back in 2005. My rent was $1350 for at around 1200 sf, but it was in Queens. The rent savings was well worth the 30min subway commute into Manhattan.

      • kelly April 7, 2014, 1:13 pm


        What is the name of the bulk company? Thanks, Kelly

    • Mr. Frugal Toque April 6, 2014, 7:16 pm

      “- no need to skip all eating out, just focus on delicious ethnic foods. Chinatown is a personal fave: $6.50 for a huge bowl of noodles or $15 for enough dim sum to leave you stuffed.”
      Remember though: as cheap as that seems, a person who does his own cooking can eat for less than $2/meal with very little effort. Even $6.50 for a bowl of noodles is more than tripling this baseline.

      • Naners April 6, 2014, 8:16 pm

        Yes, and I eat at home 6 nights/week and take lunch to work every day. The point was that NYC is not all Michelin-starred restaurants, Town Car service and haute couture: you can be Moderately Mustachian and still enjoy a lot of what NYC has to offer. It might not suit someone at the extemely high savings end of the spectrum, but I like to think Mustachianism is a big tent with room for different types.

        • Mr. Frugal Toque April 7, 2014, 7:19 am

          Oh, indeed. While the Toque family tends to save restaurant meals for birthdays and such, I don’t want you to think that I’m a purist in that regard.
          I wanted to make clear that adopting a $6.50/meal cost as a regular part of one’s life would lead to a savings-preventing grocery bill.
          To some, this seems like a reasonable way to eat. Really it leads to a food bill in the $500 range for a single person, when that person should be eating in the $100-$180 range.

    • Frugal Frieda December 2, 2016, 7:28 pm

      As a single mother living in Manhattan, I have learned over the years, all sorts of great Manhattan hacks. Here are a few ideas:
      1. Convert your one bedroom into a two bedroom and get yourself a roommate. My toddler sleeps on a trundle that rolls under my bed, while a roommate lives in his future bedroom. We live in absolute luxury compared to most of the world.
      2. Get the NYC ID pass and get free entrance and member ship to dozens of museums, botanical gardens, zoos, etc…the list is extensive.
      3. NYC is Freecycle and Craigslist Free Section HEAVEN. Everything you can think of regularly posted and given away for just the cost of your effort to pick it up. Bags of beautiful clothes, appliances, hair dryers, furniture, antiques, rugs, FREE.
      4. What’s not free is going really cheap on Craiglist.
      5. Costco and online bulk shopping. And don’t forget to get the black Costco membership card which costs $110 and offers cash back…and then get a second card and let your heavy shopping roommate use it. They get their membership for free and you get all the cash back to cover the entire cost.
      6. Eat at home, invite foreign friends for a potluck and try new international recipes.
      7. Yes, we have libraries, parks, hiking and free events and concerts all over the city.
      8. No need for a car here, but I have one for my grocery shopping, Home Depot and freecycle runs. I’ve been driving the same car for the past 17 years.
      9. Lots of work and you can find lots of ways to make side money if you’re creative. Sell things, do typing for people, dog walk, pet sit, airbnb, the list is limited only by your imagination.
      10. Many companies here deliver bulk (like really big orders). See who you know who wants farm fresh products and then divvy up an order, charging for your time effort. That can shave 25% off — or pay for — the stuff you order for yourself.
      11. Buy used clothing from thredup.com and clean out your closet. Shop online, pick what you want and then return what doesn’t fit. People throw out amazing things in my building…designer clothes and bags by the barrel. Send them in to thred up and get a paypal credit a month or so later.
      12. Buy food when it’s in season and buy in bulk, then freeze it and can it and eat cheap all winter long. Good, healthy stuff. We canned 300+ jars of product last year. Make our own soap. Make our own cleaners.
      THE POSSIBILITIES ARE ENDLESS HERE.!!!!! The list of things you can do here to pinch a penny are amazing. And lest you think we live in a dirty, flea infested NYC apartment in a bad area, you’d be totally wrong. We live in a luxury hirise doorman building, beautiful home and neighborhood, top quality organic foods. The highest expense that has been difficult to work on has been childcare…and even that is negotiable. My babysitter has traded me babysitting when I’m cooking something she likes and I make a double portion and send it home with her. The other day I found a beautiful, brand new looking designer handbag and had a buyer for it within a day, when the babysitter saw it and traded 3 hours of babysitting for it. Win-win for everyone. We give things away all the time, cook for people, it’s a great life. I have a long way to go and some issues that need correction. I found this blog a month or so ago and have already added to my hacks. But it is totally not about where you are, it is about who you are, and how open you are to trying new things. If you don’t try, you don’t get. Keep in win-win for everyone and all will be well.

      • Yard Work June 13, 2017, 5:35 pm

        > 2. Get the NYC ID pass and get free entrance and member ship to dozens of museums, botanical gardens, zoos, etc…the list is extensive.

        +1 for the ID NYC, it is the real deal. You can get free memberships to a many, many cultural institutions. I started with: BAM, Met Opera, NYC Ballet, Public Theater, Film Forum, I can’t remember all of them. http://www1.nyc.gov/site/idnyc/benefits/museums-and-cultural-institutions.page

        It’s very easy to get the ID, but you have to do it in person. Then you have to go to each institution to sign up (with your NYC ID in hand) for membership and and the membership is typically a year. You’re also signing up for an email newsletter from each place too.

  • Johnny April 6, 2014, 1:36 pm

    Heck yeah! I was fist pumping the whole way through. Congrats!

    My wife and I found ourselves in a similar boat, albeit with much less debt. We soaked up the city’s free attractions, cheap eats, and hosting friends and family (which meant we never had to pay to visit them). We took two cab rides in our entire stint in the city (once to the vet, once to a late Bolt Bus departure location) and made Costco trips on the bus every couple weeks. We lived about 30 blocks away so we’d bring two backpacks and a huge duffle bag and we’d load them up and haul them back to the bus stop two avenues away. Those trips alone served as our “gym memberships” (and running in Central Park).

    NYC is a fantastic city, and an even better city to realize that getting out of debt and getting ahead can happen anywhere.

  • Ken April 6, 2014, 1:39 pm

    OMG! OMG! I just got back from visiting my sister in NYC, and I fell in love and wanted to move back so badly. I was thinking can Mustachian live in Manhattan? I had my doubts, and for me it just isn’t possible I to have alot of debt. I graduated dental school in 2009 with $320K of debt. I now have $161K with $40K in the bank as 6 month emergency fund. (I plan to dump the emergency fund right when I get to the last $40K.) My income after taxes is about $9K per month. My monthly min loan payment is $1040 a month. My rent is $1050, and regular monthly expense run me about $1800. So monthly student loan, rent and regular expenses are $3877. So I’m able to put in over 50% of my income toward student loans. This makes $121K to go. My questions is how were you able to make $4K to $10K extra payments only making $5K a month? Well however you did it, that was impressive! I’ve been really depressed lately about my situation, but this story reinvigorates me and I have hope!

    • Naners April 6, 2014, 3:04 pm

      My rent for a 1BR in Brooklyn is $1400, and my total regular expenses are around $2500. My lifestyle includes many optional luxuries, the largest of which is not having roommates, although my health insurance is fully covered by work. I think you could totally keep up your current debt repayment and live in NYC. You just need to live about 30 min from Manhattan by subway, less if you’re strategic about where you live.

    • Kenoryn April 9, 2014, 11:53 am

      Unless that student loan is interest-free, put your $40K toward it now and you’ll pay it off faster without the added interest cost.

      Also – you make $9K/month after tax, you’ve paid off more than half your debt already in just a few years (and of course it goes faster the more you pay off, as the interest decreases) and it looks like you’ll be debt-free and accumulating huge amounts of money in under 2 years! I say congrats, and you have nothing to be depressed about!

      Regarding the above figures, the $5K was their starting salary. After that they got multiple raises, took on extra work and rented out a room for an extra $45K or more per year.

  • CL April 6, 2014, 1:59 pm

    I’ve constantly told myself that the reason why I wasn’t living in NYC was because it cost too much. Their story smashes through any complainypants excuses, and I love what they’ve done.

    Using AirBnB for extra income was a masterstroke. 2k-4k/month in extra income? That sounds amazing! Paying off a loan ahead of schedule? Amazing. Getting raises? Amazing! The whole article was one win after another. Very invigorating :)

    If they continue to save 4k-10k per month with their current expenses of $1695 rent + 800/1k of other, they’ll be able to retire in a few years. In a best case scenario of saving 10k per month and spending 2495 per month, they’d be FIRE in 5.6 years.


    • cgkid April 9, 2014, 7:49 am

      Yes… sounds amazing. It IS amazing. Don’t forget – everything that is amazing in NYC is somehow taxed, overpriced, or illegal, but don’t let it slow you down.


      The trick is to find the loss leaders of NYC who are dying for people to come through their door. Did you know you can get free wine while standing in line for a Chinese restaurant? $1 PBR and free country karaoke? Free concerts, movies, shows, gallery openings everywhere — often with free food? Get paid to sit at the DMV? The list is endless.

      I used to pick A/C units that littered the streets – just get a map of the garbage pickup schedule and be out the night before. I got about $20 apiece for a long time until the sanitation worker mafia locked in with the NYPD and started destroying people for crowding out THEIR side hustle [sidenote: they used to pile them up at the end of the block then pick them up once they got off duty – NYPD would sit the pile and arrest and fine people]. Can you imagine being arrested, paying a $2000 fine, having your car confiscated just for recycling? Better have a pass when you cross that bridge – welcome to Brooklyn.

      Find your asset. Everybody has SOMETHING that is rare, so you need to find it and ride it like a goat cart until you get shut down – then you pivot hard and throttle down into the next thing. Everybody loves the word “hustle” but most people have no idea what that means until they’re in NYC and doing it for real. If your ass isn’t thoroughly kicked at the end of the day, you’re doing it wrong. But, it’s also supposed to be fun.

      NYC is the ultimate mustachian playground. Don’t be intimidated.

      Anybody who says they need $350K/year to live well in NYC isn’t from NYC or hasn’t been there long. What they mean is that they need $350K/year to have as much excess as the rest of the United States is used to as a ridiculous “standard of living.” If you take any standard, seasoned Brooklyn hustler and drop her in the middle of Iowa, she’ll mop that place up because her list of “must haves” are nowhere near the rest of the US. She’ll do the stuff nobody else will think of or be willing to do.

  • Meg April 6, 2014, 2:09 pm

    Thanks MMM for the reminder that there really are frugal-minded people living in big cities! Your comment that higher base costs can be offset by weird financial anomalies gets right to the heart of things. Wherever there’s a concentration of fancy stuff and fancy people, there’s also invariably lots of free entertainment options and, as you mentioned in an old post, people who will pay good money for you to do something they have decided they don’t have time to do themselves.

    I’m just starting out in DC, which while not quite as outrageous as New York in pricing, is still definitely up there. I finished grad school a little over a year ago, and am very proud to have brought my student loans (my only debt) down from $48k to $22k since I moved to the city. I do some freelance work on the side, but being mindful of fixed costs was definitely the biggest factor in enabling me to pound down my debt.

    I’ve also found that it’s very helpful be the one to come up with ideals for frugal, fun things to do with your friends. As the NYC people in this case study mentioned, meeting for brunch is a standard default activity friends in a big city will suggest. The thing is, “let’s do brunch!” is usually just city-speak for “you’re a nice person and I want to spend some extra time talking with you in the near future, but my apartment is embarrassingly messy, so let’s meet somewhere else.”

    There’s nothing wrong with occasionally splashing out, but if you want to have friends yet not go into debt for weekly helpings of overpriced carbs swimming in butter, it helps to have cool (and inexpensive) alternate activity ideas to offer. I’m on a bunch of “cultural outing” listservs for DC, and have found that it’s much more fun to be thought of as “the friend who always knows which museum exhibits are opening and where the best hikes are” than it is to be “the friend who has to be pried out of her apartment because she’s so cheap.”

    • Michelle H. April 11, 2014, 1:39 pm

      I second being the “cruise director” of your social circle!

      In my pre-mustachian days I stupidly purchased too much house for my income, and had to massively overhaul my spending to stay afloat. I quickly discovered that I made plenty of money if I quit wasting it on cover charges, booze, dinner out, etc. I started hosting game or movie night at home for friends and became a guru of the various local ladies nights, free happy hour meals, 25 cent well drinks, live music with no cover, etc that Dallas had to offer. I even found one bar that was so desperate to get ladies in the door for ladies night that all women got handed a $5 bill when they walked in the door! No cover and beer was only $1 before 10pm that night, so it made for a free evening of entertainment, including tip.

      Now that I have kids (and much more income) I still look for cheap entertainment whenever possible. No need to pay to entertain the kids on the weekend when there’s a local festival, fair, school carnival, new-to-us park, etc., available for free or a small donation.

  • Jen G April 6, 2014, 3:18 pm

    We lived in NYC from 2001-2005 right out of college and were able to exploit high salaries to save an incredible amount of money during those years (all while having two kids during this time period). My husband worked in Midtown so we lived in Astoria, Queens, an awesome neighborhood with comparatively low rents, yet still a quick subway ride into Midtown. No car, groceries at Costco, etc. If I had only had MMM’s blog back in those days we would have done even better! The key was definitely to stay far away from the crowd who thought you needed to put your kids in private school and summer in the Hamptons. Awesome article!

  • k s April 6, 2014, 3:23 pm

    BJs here in the east has just as many bulk buy bargains as Costco and weeknights are blissfully uncrowded. Also, Dollar Tree online allows you to purchase cases of their fine goods and pickup in a nearby store. For many items, 24 individuals = 1 case = $24 max price for lots of house hold necessities. Costco and BJs and even THE low price leader Wal-Mart rarely have anything that distills down to $1/unit. I happen to believe that all $ stores are one of our great immigrant success stories because they are usually immigrant-owned & operated throughout our great land. Even Fairbanks, AK’s $ store is owned & operated by an African immigrant.

  • Mallary Stouffer April 6, 2014, 3:55 pm

    So love this! I am of the opinion that MMM principles can work anywhere ( I live in the Eastern Megalopolis). I really respect the effort (but relative ease and simplicity) of these smart, young, sensible folks’ approach.

    It is so true that for a disadvantage there is an advantage (e.g., density= expense but also transport choices). Just look for it!

    Thank you MMM and young New Yorkers.

  • Sly April 6, 2014, 4:11 pm

    “Rent: $1,695 for a 2br/2ba apartment in Manhattan (Partially subsidized housing….”

    sorry but I kinda lost interest right there. Anyone renting an apt at that price in Manhattan is basically sitting on a gold mine. Assuming they live below a 110th street their rent is more than half the local average. If they can’t save money no one can.

  • Lukim April 6, 2014, 5:58 pm

    NYC is certainly an unusually expensive place but there are many other cities in the world that are just as expensive.

    An apartment in inner city Sydney will set you back $3000 per month (about US$2750 per month). Other Australian cities are a bit cheaper – but not much.

    An apartment in Singapore will cost much more.

    One thing I do notice with the couple in the story and the many of the comments is the level of student loans in the US.

    In Australia now, students do have loans but the levels are much lower and much more manageable. They are a burden but they are nowhere near the burden they seem to be for Americans.

    I was fortunate to go through university at a time when it was absolutely free – and I think that is the way it should still be.

    • Rob April 9, 2014, 3:57 am

      In Finland you get paid to attend University, so you end up with taxi drivers having PhDs!!!!!

  • Ms. Must-Stash April 6, 2014, 9:04 pm

    WOW, congratulations! What an inspiring story!

    I think that lots of people these days feel trapped and depressed by student loans, and believe me I understand the macro/policy concerns of the ballooning cost of higher education, but this is a fantastic example of individuals charging ahead and making progress regardless. Love it.

  • Tara April 6, 2014, 9:05 pm

    while not everyone has a spare $30,000 sitting in their checking account, this is a very doable situation. Our rent in Brooklyn for a small two-bedroom is $1,350 and we’re a 10 minute walk from the C train station and only a 15 minute ride to Manhattan from the station so we’re not “in the boonies.” While yes, $1,700 for Manhattan rent is extremely rare, that rent is not rare for an outer-boro place that’s still close to public transit.

    I do like the idea of Air BnB and I think that’s an option my husband and I should look into as it’s a money resource we’re not taking advantage of.

    Also people forget that while some things are expensive in NYC (rent and food), other things are really cheap (heat and hot water are included in rent, old style apartments have cross breeze windows that can help reduce dependence on a/c, lots of happy hours and cheap entertainment a subway ride away, etc)

  • Ravi April 6, 2014, 9:37 pm

    Well done! That kind of rent is unheard of for me. I don’t live in NY, but have 2 friends I know that converted 2br/1ba to 3br/1ba and these places were $4,000 for the whole apt ($1.3K per person).

    $1.7K for two is fantastic! Congratulations to them for being so fortunate. I think some of the commenters mentioned, but this is obviously the biggest contributor to their quick payoff. Of course, even if they had “normal” rent of $3.5K, it would just have been an extra 6 months to pay off the debt. 2-2.5 yrs total instead of 10 is still WAY ahead of schedule and very impressive.

    Again, well done!

  • Syed April 6, 2014, 9:47 pm

    Love seeing student loan debt being paid off quickly and effectively. I have one more high interest student loan (6.5% the rest are 0.1%) that has a $30,000 balance so I’m looking to get rid of that as fast as I can. Reading stories like this are helping me stay aggressive.

  • CTY April 7, 2014, 12:09 am

    IMPRESSIVE! All gone in 10 months. These two will be FI in no time.
    In this case I would say that debt was probably very good for them as a couple, because now they know just what they can do when they put their minds to it.
    As for entertainment in NYC. Loads & loads of free stuff–art, culture, music, history. We used to live in NJ and would take the train into the city (we rode free because DH worked for transit). Anyway, we’d walk all over the city and a fresh NY Everything Bagel to go with our BYOB of juice would hold us all day. If we were there for evening fun we’d buy a slice of pizza–very large slices in NY (yeah, they sell it by the slice). Always something cool happening. OH, I miss it.

  • Chattanooga Cheapster April 7, 2014, 6:54 am

    Living frugally is definitely possible in expensive areas, especially for renters. Areas like NYC and the Bay Area usually have inflated wages and salaries that make up for the increased rents. My job had a 25% COLA. Sounds like their incomes were a little higher than in other cities too. His post-doc pay is definitely higher than most.

  • Money Saving April 7, 2014, 7:37 am

    Wow – it sounds like the Airbnb idea was a real slam dunk for you guys! It’s funny that you can rent a place and actually make money from it every month due to your specific situation :-)

    Great work on attacking that debt and keeping it down on the mat!

  • Steven April 7, 2014, 8:19 am

    I enjoy the Reader Case Studies, it’s the Debt Free Scream of the Mustache world. Next time a clip yelling we have mustaches or something catchy like that!

    There was a lot of great things in there that helped them get debt free. My favorite was getting that side income through Air BnB. Whether it’s working a part time job, mowing lawns, delivering pizzas, taking more OT at work, selling things on ebay, it’s all positive.

    If you create more income, you can pay off more debt.

  • Andrew April 7, 2014, 8:48 am

    I was kinda hoping that this story was about a couple who attained financial independence in NYC on that income! Still a cool story though and lots to learn from. I live in NYC, but in Queens where it’s not as expensive. Though their apartment is just slightly more expensive than my 1 bedroom. We’re in pretty decent financial shape, and my students loans are in the 2% range so I’m not too worried about paying it off since I’m investing it in my 401k/IRA, saving for a down payment instead. Now as for attaining financial independence living in NYC…that’s my dream…we’ll see how it goes. Tough to be mustaschian here but still doable!

  • Kim April 7, 2014, 9:14 am

    FINALLY a case study highlighting real-world side hustles that work! Congratulations to the writer, I’m silently shouting a “Wa-Hoo!” for you :) It’s refreshing to hear of someone else selling all their stuff, renting out a room, getting a side job, aka doing all the debt-slaying best practices that many complainy-pants wussy folks say they could never do.

  • superbien April 7, 2014, 9:21 am

    I’m curious about AirBnb… I have rented a whole (empty) apartment, but how does that work while you’re still living there too? Is it like having an awkward houseguest, or do you get repeats of cool folks? Did you make any friends?

    More importantly, especially for women, how did you keep it safe and weed out crazies and scary people? What if someone had really bad hygiene – is it possible to block someone from repeat renting?

    • DebtFreeinNYC April 7, 2014, 10:46 am

      I’m the subject of the case study :)

      We were lucky in many ways, one being the room was situated in such a way it has a private entrance and bathroom. Also, when people visit NYC, they’re pretty much out ALL the time, so some interactions with guests are minimal. I think once you start the process and get a feel for it, you can quickly weed out the ones you don’t think you would get along with or feel uncomfortable with. Out of the 40+ guests we’ve hosted, we haven’t had one bad apple. We have made friends with lots of the guests, some who have stayed multiple times. I’ve absolutely loved this experience of meeting people from all over the world and being a part of the shared economy. It helped us get of debt, provide an awesome NYC experience for an affordable price, and is a bit better for the environment vs. a hotel :)

      • insourcelife April 7, 2014, 1:12 pm

        DebtFreeinNYC, is there anything in you lease agreement precluding you from renting out a room on AirBnb? Do you have to pay taxes on this substantial income?

      • Karin April 10, 2014, 12:27 am

        I am curious about your subsidized rent program. How were you able to keep your rental rate once your monthly income went up?

    • Kelsey April 7, 2014, 11:20 am

      I am also interested in this scheme, although I have 2 dogs and a husband to help in the security dept… our house has 2 guest beds and a bath cut off from the rest of the house (we call it “the wing”) and if hubs would go for it, I think it would be a genius idea to help pay down the mortgage.

  • Quinn April 7, 2014, 9:43 am

    Fantastic case study, thank you for sharing! What a great example of how you can accomplish HUGE things if you really prioritize and set concrete goals.

  • Hugerat April 7, 2014, 10:01 am

    I like stories like this because they dispel the myth that living in coastal cities necessarily has to be unaffordably expensive. People always focus on the cost of housing in the fanciest neighborhoods and all of the “temptations” around you. As others have mentioned, the cities will also offer close proximity to lots of high paying jobs, incredible diversity, and lots of nearby amenities accessible with limited car use or none at all.

    Does a typical exurb with cheap houses have a Chinatown? Can you walk down to the corner and get El Salvadorean pupusas or Brazillian Rodizio? I can. And even in our chosen “expensive” city of Boston my wife and I can easily match the post-housing cost spending of the MMM family. Kudos to this couple for making it work in Manhattan.

  • Mike April 7, 2014, 10:05 am

    So I, 28 years old, live in NYC (east village) in a 300 sq foot non-subdizied apartment with my Fiance and we pay $1800 a month, as we more or less have for the past 4 years. We generally make more money than our friends* but have the cheapest rent by far. I bike to work for $95 a year ($7.91/month) on CitiBike while she walks a mile. We combine for about $80 in subway to visit friends and such for the month and about $100 for the commuter train a month for activities outside of NYC to e.g. go backpacking or the beach for a day. Compare that to a 2 car household in much of the country and we aren’t too far off. Add in the small apartment makes buying things more burden than benefit and we are off to a good start.

    The expenses and salaries are so out of whack with the rest of the country, but we are using that to our advantage. A 40% savings rate here gets you a lot more in savings than a 40% savings rate anywhere else because salaries are so much higher here for the exact same job.

    Staying away from all the great restaurants, brunches, bars is the biggest challenge but cooking in a small kitchen has the advantage of nothing being very far away. No running all over the kitchen when I can just rotate between sink, stove, fridge, pantry and cutting station.

    The key for us is to just save our money now while we work and don’t have kids for a handful more years and retire outside of NYC. Utah or Colorado are looking like pretty good bets though Wyoming and their 0% cap gains tax rate might be nice too. I bet you can buy a bottle of Heinz Ketchup out there for half the price it costs at my closest grocery.

    *185k combined gross. I am aware this is higher than most, but neither of us are particularly specialized (both working in the advertising field which is big industry here in NYC along with Finance, Fashion and Media) and neither of us are in finance. We are educated at college somewhere between 100 and 200th best in the country, work at decent but not spectacular companies and work about 45 hours a week on average. Nothing unattainable in NYC. I reiterate, this place is absurd.

  • Pittsburgh Stash April 7, 2014, 10:44 am

    Great story! I’m wondering, how did your fiance begin introducing you to the MMM concepts?
    I’ve read MMM’s posts on the topic of introducing a significant other to the lifestyle and some of the forum posts, I’d just like to get another take on it since it will be a significant factor for me in getting into a more serious relationship with anyone.

    • DebtFreeinNYC April 7, 2014, 12:09 pm

      It was gradual, but he didn’t meet much opposition because I was never a big spender to begin with and I came from a frugal family. My dad is pretty smart with stretching resources and saving (definitely ignored this while I racked up my student loan debt), so it wasn’t a huge shock to my system. My husband’s upbringing was the complete opposite, so I think the idea was more “radical” to him, which is why he took a gradual approach introducing me to this. But once I started reading the blog, it really resonated with me and the minimal and free lifestyle that I craved. It makes it SO much easier when you’re both on board. If you’re not in a relationship yet, I would look for the signs early on (i.e. is this person an excessive shopper, do you see them making impulsive purchases, do they opt for dinners out vs. a nice cooked meal at home, etc). What initially drew me to my husband was his simplicity (he basically had a homer simpson outfit, same jeans, shoes and alternated between 2-3 shirts) and how he valued experiences over “things”, and I’m sure he would say the same about me. So while mustachian wasn’t initially at the forefront of our relationship, we shared the same underlying values, which made it easy to get on board to tackle the debt as a team :)

  • Done by Forty April 7, 2014, 11:41 am

    That AirBNB approach is a stroke of genius. That’s a game changer available to people living in desirable vacation spots.

    • DebtFreeinNYC April 7, 2014, 12:10 pm

      It was gradual, but he didn’t meet much opposition because I was never a big spender to begin with and I came from a frugal family. My dad is pretty smart with stretching resources and saving (definitely ignored this while I racked up my student loan debt), so it wasn’t a huge shock to my system. My husband’s upbringing was the complete opposite, so I think the idea was more “radical” to him, which is why he took a gradual approach introducing me to this. But once I started reading the blog, it really resonated with me and the minimal and free lifestyle that I craved. It makes it SO much easier when you’re both on board. If you’re not in a relationship yet, I would look for the signs early on (i.e. is this person an excessive shopper, do you see them making impulsive purchases, do they opt for dinners out vs. a nice cooked meal at home, etc). What initially drew me to my husband was his simplicity (he basically had a homer simpson outfit, same jeans, shoes and alternated between 2-3 shirts) and how he valued experiences over “things”, and I’m sure he would say the same about me. So while mustachian wasn’t initially at the forefront of our relationship, we shared the same underlying values, which made it easy to get on board to tackle the debt as a team :)

  • Alan April 7, 2014, 12:13 pm

    I appreciate the story, and my wife and I are in a similar spot with a lot of student loans. Currently, we’re on pace to pay off the remaining $60K in 2.5 years (paid off $30K in the last year!). The problem for us is that cutting out all discretionary spending only cuts off about 6 months of repayment…just not convinced that’s worth 2 years of hating life by not eating out ever, no vacation savings, etc.

  • houston mustachier April 7, 2014, 1:24 pm

    Impressive! Great Job. Here is math without the narrative. Keep in mind the difference between NET (after taxes) and GROSS (before taxes)

    $68K Net (Yearly Salary) or ~100K gross
    $24K-48K Net (Air BnB Income) or ~40-75K gross
    $10K Net (Extra Work) or ~15K gross

    This equates to 130K Net or ~$155K – 190K gross income.

    The magic was the 3rd source of income – Air BnB paid for the majority of the loan and now will pay straight into the retirement savings. The biggest key was locating their strength – subsidized housing (from postdoc), and leveraging that in their marketplace (housing shortage).

    Key learning…..Extend your postdoc till your home has paid for retirement!

  • CD April 7, 2014, 1:49 pm

    This is my first time commenting on MMM but I feel compelled to weigh in since I have lived in Manhattan (that’s Manhattan, not Brooklyn or Queens, where it is cheaper) for 13 years. I went to college here and graduated with student loans, credit card debt, and an entry level job that paid $25,000 a year. My first paycheck was $600 and my portion of the rent was much more than that. But if you’re willing to make certain sacrifices while building wealth here and have the guts to take risks with your career, you can make it beyond your wildest dreams. My husband (who also had student loans) and I are on track to retire by around age 40, perhaps younger. (We are 34 now.) I don’t mean to humblebrag – I just want anyone who thinks it’s impossible to live in NYC and build wealth and retire early to know that you can do it. The biggest thing you have to avoid here is lifestyle inflation. If you can resist the urge to upgrade apartments and go to every fancy restaurant that opens up, you’ll make it. I’m willing to make sacrifices to save money, but I personally would never put my apartment up on AirBNB. I don’t want strangers staying with my personal stuff! I honestly can’t believe people are ok with that. Also, my building is a notorious AirBNB place and we’ve had a lot of bedbug infestations, trash issues and random sketchy things happen because travelers who have no vested interest in the building are constantly traipsing in and out.

  • misterfancypantz April 7, 2014, 3:01 pm

    I work in NYC, I used to live in an outer boro, in the burbs now, NYC is all about choices, salaries are a lot higher so you can choose to spend the surplus or save it, if you choose wisely you will go a lot further.

    That being said we plan on staying in the area as we love it and have family ties, we know we could FIRE now or years ago actually in other parts of the country, so we make choices on what is important to us, but don’t let anyone tell you can be frugal or save 60%+ of your pay in NYC and still take advantage of everything it has to offer. I get to enjoy the theater and the restaurants and the parks and everything else, just in moderation… You can’t go to Per Se or Wolfgang’s every week. Broadways is for special occasions, not because it’s Wednesday…

  • Heather April 7, 2014, 4:50 pm

    I really love posts like this! Such an inspiration for us all. If they can cut that much debt, nobody could possibly have a reasonable excuse!

    Thank you. You just made my day.

  • Jen April 7, 2014, 6:37 pm

    People in Shanghai, Hong Kong, Singapore, Tokyo etc probably would be happy to have prices as in good ol’ cheap Manhattan. Your location can never be an excuse not to save. Good job!

  • Milos April 7, 2014, 7:18 pm

    I just want to endorse the idea that MMM-type living is possible (nay, desirable) anywhere, including the high-cost, high-density cities that are somewhat derided in the MMM community.

    For each Eastern Megalopolis-type disadvantage there is an advantage (e.g., free stuff galore, transit options like crazy: see CitiBike in NYC(!)

    Go forth and live in cities, MMMers. If you want to, it can be done.

    Thank you MMM and young New York couple.

  • Jenny April 7, 2014, 7:29 pm

    Advantages like this subsidized apartment are out there for the taking. I’m living in a fully furnished and serviced apartment in Tokyo (a city very possibly more expensive than Manhattan?) for free plus receiving a currency supplement because I accepted an international work assignment. Living abroad is not something I’ll be able to do forever, but the two years I’m spending in Japan have accelerated the rate at which I’m approaching Financial Indepedent in a big way. Did I get lucky? Kinda. The reason I’m here is because I was willing to say yes and to take myself out my comfort zone.

    • Lukim April 7, 2014, 9:11 pm

      Jenny – I agree with your thinking – it is not a matter of being lucky, it is a matter of being prepared to say “Yes” and take yourself out of your comfort zone.

      I took up a foreign employment contract almost 27 years ago and I am still doing it (been through a number of different contracts in different countries).

      As a result, I have done pretty well for myself and my family.

      I am now at the age (55) where I am looking for a new challenge.

      If the opportunity comes up, grab it.

  • The Smaller Dollar April 7, 2014, 8:19 pm

    New York is a whole other level. I need to master Texas before moving up to the hard mode that is the east coast. Inspiring to read how you made it work!

  • Al April 8, 2014, 3:35 am

    I think the other thing to acknowledge here is the power of two. Two people working toward the same objective can be a tremendous force.


Leave a Reply

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!


welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.

Love, Mr. Money Mustache

latest tweets