Friday, February 01, 2008

New York Stories #10 : Debt-Free in Harlem

We're up to our 10th New York Story! Here's someone who came to the city and succumbed to the usual temptations that make us overspend, but then she got it together and got out of debt!

I am a 28 y/o. originally from VA, moved to NY after graduating college in 2001 to work in fashion industry.
Career began making 37K a year. By the grace of God and hard work, now make 90K.

I graduated college with no student loan debt (on a full merit based scholarship, saving me 120k), but accrued credit card debt my first year in the city) by…shopping, eating out. Basically living beyond my means.
After a year of fearing my credit card bill every month, I realized the answer to my dilemma was not making more money, but being a good steward of the money that I already made. I cut out all ‘extras’ (cable, magazine subscriptions, hair appt, mani/pedicure, eating out) and put myself on a strict budget of living on $60 a week (for $21 weekly MetroCard, all food, laundry). I was able to pay off $6,249.41 in 14 months and became debt free in 2003!

Motivated to save aggressively, I moved out of the UES, got a roommate and now share a rent-stabilized apt in Harlem (only pay $550/ month) in order to save to purchase my own apt.

Breakdown of my current budget:
10% of gross income = tithe
2% of gross income = offering
10% of gross income = 401K contribution
30% of gross income = living expenses (rent, ConEd, basic cable, renter’s insurance, NYSC membership, food, allowance)
15% of gross income = esavings acct
Balance…taxes J.
Well done! I am impressed by several things here: first of all, she has obviously done well in her career and increased her income very quickly. But she didn't let her lifestyle expand too much as she did it-- instead she moved to lower her rent, and prioritized paying off debt. Over $6,000 paid off in 14 months, and this was back when she was only 2 years out of college! That is amazing. And now she is putting 12% of her income toward tithes and offerings, and still manages to save money! That nice low rent must really help! Congratulations to this debt-free New Yorker and best of luck in saving to buy your own home-- given your saving discipline, I'm sure you will manage it quite soon!

Other posts in this series:

New York Stories #1: Bronx Chica
New York Stories #2: Orange
New York Stories #3: Bama Babe
New York Stories #4: K
New York Stories #5: Frugal Female
New York Stories #6: SandyVoice
New York Stories #7: Escape Brooklyn
New York Stories #8: Comfortable Couple
New York Stories #9: Upper West Sider

And I'm still accepting submissions, so feel free to email me your very own New York Story!


Jared & Madelyn said...

Can you recommend any good finance books that are ethics based? I have divested from most of my international funds that support the Sudanese government (mostly Chinese companies), and I want to do more... Any good recommendations?

DogAteMyFinances said...

Wow, that's pretty incredible, and makes me feel like a total slacker.

I'm incredibly impressed she could accomplish so much while tithing AND offering AND putting that much in her 401K with a fairly modest (by NYC standards) income. Kudos.

michelle said...

THIS is the type of New York Story that I find inspiring...

RacerX said...


Give her a big thumbs up from me! Very inspirational. A great key is that she worked, really from High Scool on to be in a great position. I say High School, because her hard work saved $120k!

mw said...

She's living on 1/3 of her net income -- that's hard to do anywhere!

Can you ask what the difference is between offering and tithe?

Anonymous said...

Very impressive ... almost sounds too disciplined to be real. Where are the human flaws in such control?

BTW ... a 'tithe' is often considered the 1/10 which is given by 'obligation' ... and 'offering' by some is considered the amount one gives by 'choice' out of love.

SandyVoice said...

Good work, DD in Harlem! In one year you figured out what took me 30 years. Brava that you were able to get out of debt so fast!

Serenity3-0 said...

I'm very impressed and moreso proud to see that she mentions her spirituality in a few places in there. You can tell what is important to her by looking at her breakdown. I'm a firm believer that those who give are abundantly blessed.

Anonymous said...

AWESOME that she is tithing - I love to see frugal people who prioritize tithing while also saving for retirement. Brava!!!

Anonymous said...

Bronx Chica...she is living my future...inspirational along with other NY stories!

Ryan said...

I give he a lot of credit for tithing. Not too many do that nowadays.

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Anonymous said...

Certainly an inspiring story. I am a foreigner so I do not know how your tax system works. In my country, taxes are automatically deducted from salary, therefore I receive net income, not gross. So, I am a bit confused about all these calculations over gross income. At the end of the day, you do not get the whole gross figure, how can you budget with that? Well, I am not very good in math either but may be someone can explain?