Tuesday, May 27, 2008

Welcome Back

And welcome to summer, which began here in the New York area with an absolutely glorious Memorial Day weekend. I think I have tried to write posts several times about the seasonality of spending, i.e. does one season make you spend more money than any other? Summer, for me, usually means a bit of traveling, and a fair amount of air conditioning jacking up the electric bill, but other than these, summer seems to be a time of inexpensive pleasures, such as sitting in the park, going to Coney Island, and eating lots of salads for dinner. This past weekend, I did do a little shopping for some summery clothes, but other than that, it was a blissfully peaceful and inexpensive weekend, spent relaxing in the sun, sketching and painting, reading, going for a walk, and eating lots of fruit and barbecued salmon.

Meanwhile, here's an article from the weekend NY Times that will be of interest to many financial bloggers, I'm sure:
Starting Salaries But New York Tastes

Every year around this time, tens of thousands of postcollegiate people in their 20s flood the city despite its soaring expenses. They are high on ambition, meager of budget and endlessly creative when it comes to making ends meet.

Some tactics have long been chronicled: sharing tiny apartments with strangers. Sharing those apartments with eight strangers. Eating cheap lunches and skipping dinners — not just to save money, but so that drinks pack more of a punch and fewer need be consumed.

But there are smaller measures, no less ingenious, that round out the lifestyle. These young people sneak flasks of vodka into bars, flirt their way into clubs, sublet their walk-in closets, finagle their way into open-bar parties and put off haircuts until they visit their hometowns, even if those hometowns are thousands of miles away.

What struck me most about this article is that all these young people seem to share a strong need to go out a lot. They may sneak alcohol into bars in a flask, or get a head start on their drunkenness before they go to a club, but going out seems very necessary. Which I guess is normal for your average warm-blooded single 20-something.

But I guess the going-out thing is why I read this article and felt like I never lived that life. I moved to NYC in my mid-20s to be with a partner, so I sort of went straight to the homebody stage, sharing a 2-bedroom in a quiet Manhattan neighborhood. My share of the rent was around $750-800, I think, and I was making $25,000 plus an annual bonus that could be over $10,000, which went almost entirely into savings. Money was tight for me, but it never seemed all that bad. I went out occasionally with groups of friends, but it wasn't that big an expense. I did get my hair cut outside of NYC for the first couple of years, but only because I liked the guy I went to and it was a convenient excuse to get out of my parents' house for a while! I bought decent clothes, though certainly not any designer labels. I was paying off student loans. Yes, I was a bit stressed about money, but somehow it all worked out. I didn't get into debt. I saved enough for my share of a down-payment on a co-op in Brooklyn. I paid off the student loans early. I made ends meet. (And if this sounds terribly boring, don't worry: later in my 30s when I was single again, I could have lots of fun because I was making more money by then!)

But surely my lack of frequent bar-hopping isn't the only reason I made ends meet? What else are these kids spending money on? Some of them are dealing with much more expensive rents than I did, for worse living conditions-- it is definitely true that living in Manhattan, while never cheap, is much more expensive than it was 12 years ago. But other than that, I'm not sure I get it. I wish the article had provided a more detailed expense breakdown for these young New Yorkers. And they could have checked my New York Stories series for some examples!


SandyVoice@aol.com said...

I'm older than you, Madame X, and when I was in my 20s I certainly didn't know anyone who went out on a regular basis.

Perhaps it's the current culture of celebrity, the general dissemination of which is relatively new, and which makes people desire fame as an end in itself. The sucess of obvious slackers like Paris Hilton, makes people feel like anyone could be famous, even without doing anything real to deserve attention. There's extraordinary media coverage of the party scene, and people who aren't rooted in their lives yet want to join the mainstream culture. They see that all they have to do is be fabulous, and they may not realize in advance that achieving fabulousity requires quite a bit of money -- certainly more than they make. Many of them use up their salaries competing for attention, and end up with hangovers and debt.

I was about to write that the economic downturn may dampen the scene a little, but people party to distract themselves from their fears, too. There's a "dancing on the edge of the volcano" quality to the coverage. The editing of TV entertainment shows is all fast cuts, loud music, and flashing lights, just like the night club scene itself. Very distracting, and not a scary as the Dow Jones Average.

This is not to say people aren't having fun. I bet they they are. It's not my kind of fun, but then I've always been a nerd, and proud of it. When I was in high school and college, I really wanted to be popular, but I thought that was an adolescent thing.

So perhaps another reason for all the partying is the current culture of youth, and the putting off of adult responsibility. And that began in the 60s and 70s, so it's all my generation's fault!

Anonymous said...

Lots of good tidbits in that article ... let's just not go this far to live the "New York lifestyle." -- one of her friends endured the long, painful process of selling her eggs.

Anonymous said...

I'm in my mid-20's, living in Manhattan, so I found this article extremely interesting.

A couple of observations:

-While I admit that I don't fully understand the need of these people to buy into the notion that they need to have the type of social life typically enjoyed by those making 5X their income, the kind of person willing to publish their real names, salaries, rent expense and money-saving short cuts in the NY Times might not be representative of all young New Yorkers making modest salaries.

-Even though I hardly go out (1 drink a week, max.) as much as these kids (and I make more than most of them), I think I still definitely feel a lot of pressure to spend outside my means, even if that's ordering Chinese just because my roommate wants to even though there's leftovers waiting for me in the refrigerator. So it's hard for me to get too mad at them. I can relate. Even if they are a lot more extreme than I am.

-Why, why would you buy rice and beans at a restaurant for $3.50? Make them yourself for a fraction of the cost at home and then treat yourself to a nice restaurant meal every now and then. You deserve it.

Anonymous said...

I'm in my mid-20s and live in Brooklyn, and I certainly don't go out as much as the people in this article. I'm a boring married person is probably part of the reason, but pretty much all of our friends are single.

Me and my husband are in almost the opposite boat as some of the people in the article, in that we pretty much make more than all of our friends. It works out that one of our friends loves to plan, so we do lots of free museum days, hanging out in parks, and other affordable options.

Anonymous said...

So interesting, thanks for posting it. I've been thinking about this a lot lately - what makes one person comfortable with a simpler lifestyle and another who can't resist going out a lot and buying more stuff. Nature, nurture, age group, what?

I racked up $10k worth of credit card debt in my 20's, then got so mad at myself (plus I couldn't bear to watch the interest accruing every month) that I quit shopping cold turkey and paid it off in about a year. I haven't carried a balance since. I know there aren't any one-size-fits-all answers, but I'm wondering if the research shows any patterns for the different spending habits.

mara of portland said...

Hmmm. As a fellow mid-20-something, I think these are problems most of us are facing in our early careers. The cost of rent, booze, haircuts, or restaurant dinners varies throughout the country, but it's a challenge for most of us to have a fun and balanced life on a 20-something salary while dwelling in an urban center. Moving to cheaper digs in the 'burbs is an acceptable compromise for some; others wouldn't dream of it. ;)

In addition to student loans and other debts, we often don't have the job security our parents and grandparents might have had in their day. Freelance and contract workers have to consider the costs of independent healthcare and retirement plans, and the possibility that a dry spell in work may be coming unexpectedly. Taxes can bite off a lot. Many early jobs are boring. We're impatient to get ahead. In some areas where public transport infrastructure isn't as well-developed as New York, we have to consider the highly variable cost of owning a car as a necessary expense.

I feel very privileged to be able to enjoy delicious food and drink on a frequent basis (several times a week!), clothe myself reasonably well, and pay someone to cut my hair. :)

Sociology Major said...

As recent college grad (1.5 weeks ago) moving to the city for her first real post-grad work experience, I'm already starting to feel some of the financial pressure of the lifestyle someone my age is expected to lead there. That being said, some of these people are kind of ridiculous. Not living in Manhattan, doing free-lance work or waiting tables instead of partying each weekend are probably going to help save money. In addition, I found it curious that only a couple people mentioned weren't paying off student loans. Almost everyone I know has a fairly significant debt burden from college that they have to factor into their monthly budget.

Anonymous said...

I would think if they are single and in their 20s and going out a lot, they are also spending a lot of money on going-out, party clothes and shoes, which can get pricey. I mean, if you are going to act the part, you have to look the part too, right? It seems like younger/college age people dress a lot better than my friends and I did at that age. But, then, we aren't in debt either.

Anonymous said...

I really enjoyed the article but like others said, they do not represent the majority. I am 23 and I make less than all of the people in that article. I live in Brooklyn, I go to happy hours and I still have plenty of money. Maybe I am just awesome at budgeting but I don't find myself struggling even though I make around 30k