Finance 101: How to Thrive in NYC (on a Publishing Budget)

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YPG finance 101 photoThe average starting salary for an entry level job in publishing is about $33,000, and it’s no secret that, while many publishing jobs are located here, New York City is an expensive place to live. How can someone just starting their career make it work?

On March 11, 2015, fifty YPGers from a variety of AAP member publishing houses gathered at the AAP New York offices to hear Ryan Hart, a financial planner with New York Life, give hints about how to save money on a limited budget and answer their questions about saving, spending, and investing.

After living on a publishing budget for seven years, I’ve adapted a few of his tips and added some of my own below. They might be helpful if you weren’t able to attend the session but want to get your financial house in order while you’re still living in an apartment with roommates:

Trim Your Treats

I’m not going to tell you to cut out Starbucks here because, let’s be real. You’re probably not drinking Starbucks. And even if you are, giving it up probably won’t make you rich. But little things add up, and if you’re treating yourself to something small (coffee, new clothes, happy hour drinks) on a regular basis, cutting them out can be a quick and easy way to add some money to your budget. Instead, consider taking advantage of one of the many free activities in NYC, shopping at Housing Works for clothes and books, or having friends over to your place to split a bottle of three-buck Chuck. If you’re having trouble sticking to this, stop carrying your credit cards and only carry cash. If you run out of money for the month, it’s time to stay home.

Build Up an Emergency Fund

Put the money you’re saving by trimming back into a savings account. It’s a good idea to build up an emergency fund with enough money for 3-6 months of expenses, in case you’re out of work for a period of time. One of the best ways to do this is with a high-interest online bank account, like Smarty Pig or Capital One 360. Transfer money into it immediately after you’ve been paid, so you don’t have a chance to spend it first, and then don’t touch it unless there’s a real emergency.

Put Away for Retirement

Almost all the YPGers at the event said their company offers some sort of retirement matching, many up to 10%. That’s free money, guys! And if you aren’t putting in enough to get the full match, it’s like giving up a raise. Chip away at your expenses until you can fully fund your match, and put in even more if possible. If you’re in your 20s, you want to start putting between 10% and 20% of your salary into a retirement account, so you have a healthy amount saved when it’s time to retire. Get in the habit now, because if you postpone it, you’ll only have to put in a higher percentage later. Talk to your HR department; they should be able to help you enroll in your company’s 401k plan and help you maximize your benefits.

Get Out of Debt

The average college graduate has almost $30,000 in student loans, and that number looks scarily like the average annual salary for editorial assistants. As Ryan said, “Student loans are not permanent. They feel like it, but they’re not.” Pay the minimum amount on all of them, on time, and try to pay extra on the highest-interest loans whenever possible. If loan consolidation is the best option for you, take it.

Use Your Windfalls Wisely

Perhaps it’s a month with three pay periods. Maybe it’s a holiday bonus or a paycheck from a freelance gig. Or maybe you’re getting a tax refund this month. Whatever it is, if you get an extra sum of money for some reason, use it wisely. Reward yourself by using 10% on a treat, and then put the other 90% toward paying off debt or building your savings.

 

If you want to see what all this looks like in practice, here’s a sample budget. Adjust it to fit your situation, and see if there’s anywhere you can trim back:

Sample Budget (based on a $33,000 annual salary):

Monthly Income: $2,750

 

Taxes and Pre-Tax Deductions:

Federal Tax Withholding: $287.71

Social Security: $146.69

Medicare: $34.31

New York State Tax Withholding: $86.60
New York City Tax Withholding: $58.75

State Disability Insurance: $2.40

Retirement (5%): $137.50

Health Insurance: $130

Transportation: $116.50

 

Total Paycheck: $1,749.54

 

Student Loan (income-based repayment): $200

Rent: $900

Utilities: $100

Groceries: $200

 

Total Left for Savings & Incidentals: $349.54

The views expressed in this article are solely those of the author and are not meant to be reflective of the views of the Young to Publishing Group (“YPG”), the Association of American Publishers (“AAP”), or any individual publisher.  The author is not a financial advisor, and the information in this article is not a substitute for receiving financial advice from a qualified individual.  YPG, AAP and its members are not responsible the content of this article and shall not be liable for any errors or omissions; the content or accuracy of any links in this article; or reliance on this article or any links.  To the extent that this article mentions third-party products and services, nothing in this article should be read as an endorsement or recommendation of such products and services.

This article was contributed by YPG member Kristin Maffei. To learn more about our contributors, visit the contributing writers page.

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