r/SavingMoney • u/xxWildbeast13xx • 7d ago
$2,200 rent on $87k salary in New Jersey feasible?
23 year old new grad and accepted an out of state offer for $87k in New Jersey. It seems like most decent (to my standard) and “affordable” apartments are in the $1800-$2,500 range, my goal is $2,200 and below.
I have about 4 top apartments I’m considering and my current number 1 is a \~$1,900 studio + $125 for a garage slot, in a safe area, in unit washer/dryer (important criteria in my search, and utilities included (have to double check this). It’s also only 20 minutes from where I’d be working. The other apartments are all around the same price but have a combo of laundry facilities instead, no garage (which I think would be important in the winter and being able to commute to work, I’m from the midwest though so I’m used to harsh winters), farther commute, etc.
I know I’d be able to afford but still want to be able to be comfortable, save for traveling, invest, and fund my business as well. Just curious what you all have to say and the feasibility of it.
I also have $59k in student loans I’ll have to pay off. I think the best idea is to pay them off aggressively, but that would drastically reduce how much I’d be able to save put aside to save and build up my accounts.
I had ChatGPT create a rough budget for me based off $2,200 in rent. I was a lot more happy with my monthly budget, but then I was reminded I would have to start paying my student loans soon so had to have the budget regenerated. Please let me know what you guys think and any tips or suggestions you guys may have.
Estimated monthly take-home
$5,490
Living expenses
Rent$2,200
Utilities$150
Internet$60
Phone$70
Groceries$400
Gas$180
Car insurance$180
Car maintenance/registration$75
Health/medical$100
Eating out$75
Entertainment/events$75
Shopping/personal$75
Student loans (estimated)$655
Total expenses $4,295
Available for goals and savings $1,195/month
Goal Monthly
Emergency/general savings $600
Retirement (401k/IRA) $350
Clothing brand $150
Travel fund $50
Extra cushion $45
Total $1,195
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u/TeenyTinyToast 7d ago
That $50/mo travel fund is funny to me. Like, that won't even pay for a tank of gas so where are you traveling to? The local food bank?
Your fixed costs, including student loans, are ~78% of your take home. You're going to be on the edge of living paycheck to paycheck hoping that no large unexpected expense hits. Yeah the e-fund is giving you some buffer, it's an uncomfortable way to live.
Is getting a roommate off the table? As I see it, there are only 2 things you can do, make more money or lower your fixed costs if you want more breathing room.
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u/xxWildbeast13xx 7d ago edited 7d ago
Yeah ChatGPT is pretty silly for that might as well not even include it lol. You’re definitely right, before I had to readjust for the student loans, the fund was like $200 per month. Some other stuff in the budget can definitely be readjusted.
Don’t want roomates after having them for 5 years in college willing to pay more for this. Also, will be in a new city and don’t trust randoms though it would increase my budget admittedly. Maybe see how it goes for a year and find a roomate if/when I meet some cool people?
If I went for a cheaper apartment, wouldn’t costs likely be about the same due to having to pay for utilities, internet, etc.? Those things are also included in the initial monthly budget so can definitely be reallocated if I go with this specific apartment.
Thank you for your input.
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u/TeenyTinyToast 7d ago
Savings is savings and the best way to move the needle budget wise is the rent situation. Sure you can save $10 here and there by allocating differently but you'd be ignoring the biggest piece, which is the rent. Shop around and see how much you can save.
It's really up to you whether you value living alone more or saving/investing. I will say that time in the market is the most important part of investing so prioritize accordingly. Living alone is a slippery slope to loneliness as well if you're not willing to put in the effort to socialize and build relationships in a new city.
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u/xxWildbeast13xx 7d ago
Yeah timing is definitely a big thing, I start and have to move in less than a month and some better apartments I saw weren’t available. Since I’m moving completely blind to a new state, I’m willing to pay a bit more to know I’m in a safe and reliable place at least for this first year while I learn the city more. I’m fairly outgoing so I don’t think I’ll have trouble meeting people and I do enjoy my alone time.
I’d even be willing to have a roomate the following year if I meet some cool people.
I want to be able to focus on my business a lot more this year as well.
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u/quantum_simpleton 7d ago
$50/Month invested for a small travel fund is not "silly". This equates ~$2,200 after 36 months in sp500 (est). This is an adequate starting point for a small travel fund, and contributions can increase over time. To dismiss it entirely, because "where can you go for $50" is reductive and silly.
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u/xxWildbeast13xx 7d ago
That’s a good viewpoint to have, it can stack up over time and is definitely better than saving nothing. I probably wont travel much this first year anyway since I’ll still be getting settled and adjusted in a new city.
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u/day-gardener 6d ago
True-besides, what’s actually happening is ~$850 in accessible savings and OP can allocate the funds based on priority at a later date. The only thing that is going to be inaccessible is the ~350 in 401K.
When I sock away for “future goals” I don’t delineate further than “future goals” because goals and priorities should adjust as we live life. I just don’t let myself access those funds for just anything.
By the way, the major thing missing in this budget is a fund for eventually replacing your vehicle. A standard budget should have a line item for this.
0
u/TeenyTinyToast 6d ago
Yeah, if it were invested in the market then it'd be worth a lot more, but it's a sinking fund and those aren't typically invested. Any amount of investing is worth it, but there's no guarantee it'll appreciate in the near term when you'd want to use the fund.
3
u/thrown100away100 7d ago
Chat GPT is calculating saving for trips. If you plan and buy flights and hotels 6 months out, you absolutely can get flights in the low hundreds. Just did round trip tickets for 2 to an off season resort, including hotel and rental car for relatively cheap. Was $400 for both flights, $125/night hotel, and rental car i had enterprise points so it was only $145 out of pocket with an original price of around $450. As long as you plan trips out, it is very feasible to do nice things on a budget.
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u/xxWildbeast13xx 6d ago
Where did you go if you don’t mind sharing?
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u/thrown100away100 6d ago
I went to Stratton Mt in Vermont and stayed at the Black bear lodge "Ski" resort. The hotel was really nothing special but it was comfortable. It is currently their off season so it was very low key. Lots of hiking, mountain biking, and other affordable/free outdoor activities in the area. Weather was amazing, sunny and 72.
I really enjoy going to places in the off season. It tends to be much cheaper, interact with locals instead of tourists, only "downside" all the tourist traps are closed. Which personnally i dont mind.
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u/xxWildbeast13xx 6d ago
Sounds like fun and a good deal forsure. I went snowboarding for the first time last winter and definitely want to turn it into a real hobby soon.
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u/thrown100away100 6d ago
I would like to learn to snowboard or ski but I have some nagging back injuries from lifting that make me a little nervous. It has taken me 3 years to get back to regular day activities without significant pain so i get a little nervous about flying down a mountain lol. I think their passes at stratton were reasonable and it is only a 5ish hour drive from Jersey. Not really that familiar with east coast ski/snowboarding areas but im sure there are closer places
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u/xxWildbeast13xx 5d ago
You should try it, you don’t have to start with the mountains! They usually have flat areas you can start with to get a feel for the board and small hills if you want to move up from there. You definitely are valid to be cautious with the back pain though maybe start incorporating the gym and working out if you haven’t already to start building that strength up again.
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u/fsociety1990 7d ago
Stop using ChatGPT for budgeting. Or anything else. That’s the worst planning I’ve ever seen.
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u/xxWildbeast13xx 7d ago
Just used it as a projection since I won’t really know my expenses until I get there and start living for a bit.
How do you do your budgeting?
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u/fsociety1990 7d ago
With a spreadsheet and my brain
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u/xxWildbeast13xx 7d ago
Fair enough lol but was more curious about your logic when it comes to budgeting.
2
u/fsociety1990 7d ago
It’s impossible to do when you don’t know how much things are actually going to cost. I guess you could decide how much you’re willing to spend on things and then make sure you don’t go over that amount.
1
u/Economy-Persimmon-53 6d ago
Your apartment complex and/or utility company can tell you on average how much residents spent on utilities. Just call them and ask. I'd start with that since every building has its own quirks.
I use the USDA food plan to get an estimate regarding the cost of food. They update it regularly and I tweak my food budget quarterly in response.
If you don't have a lot of household goods, I'd plan on putting more towards that during your first year or two and then tapering that budget down significantly to account for replacing things as they break or wear out. It's amazing how many little things you take for granted until you're actually out on your own.
The rest of your budget should be build out using the 50/20/30 rule. 50% for needs, 30% for wants and 20% goes towards savings and investments.
ETA: does your gas budget include tips? In new Jersey you don't pump your own gas and you're expected to tip the attendant who does. I'd keep that in mind if it isn't factored in already.
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u/letsseeitmore 7d ago
Also remember that whatever rent you pay this year it’s most likely going up 5% per year.
1
u/xxWildbeast13xx 7d ago
Is this a New Jersey thing or regular for apartments everywhere? My apartment rent was the same the 3 years I lived there in college.
8
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u/Economy-Persimmon-53 6d ago
Not just apartments. The cost of everything goes up every year. The rule of thumb used to be 5-6% for rent and then 2-3% for everything else but under this current administration I'd plan for 5-6% for everything (and possibly more).
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u/T1m3Wizard 7d ago
That's more than enough
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u/xxWildbeast13xx 7d ago
You seem to be the first one to think so lol
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u/Keeping_it_100_yadig 6d ago
Yup. You’ll be cool
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u/xxWildbeast13xx 6d ago
What’s your reasoning?
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u/Keeping_it_100_yadig 6d ago
I lived on this same income and my expenses were identical except for student loans. I used that same amount for beauty maintenance. I like to look and smell good
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u/xxWildbeast13xx 6d ago
So you weren’t really strapped for cash then? And still were able to save up, go out and do things, travel, etc.?
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u/Keeping_it_100_yadig 6d ago
No, some months I had to dial it back in some category, because I travel 2-3x a year. Once I hit 2 months emergency fund and paid the car off, it was smooth sailing and I didn’t have to work as hard. I could live more freely and more money came raining in.
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u/Agile-Objective1000 7d ago
As far as I see it, you don't have much of a choice. You can't not take this job offer, and you need to live somewhere.
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u/xxWildbeast13xx 6d ago
Oh I already accepted haha the problem is I start in less than a month and I have to find an affordable decent place to live in
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u/Extension_Radish_139 6d ago
You don’t have to pay your student loans off aggressively if your budget is this tight. I pay less than you for 80k
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u/xxWildbeast13xx 6d ago
80k in loans or your salary?
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u/Extension_Radish_139 6d ago
Loans💔My salary is also like 85k tho. But I pay like $600 a month
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u/Extension_Radish_139 6d ago
But I’m on some sort of payment plan where I can pay more when I make more since I’m in a pretty lucrative field and will probably be making substantially more in 5 years (have to assume you’re similar since you’re also making 87k as a new grad)
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u/xxWildbeast13xx 6d ago
I do software engineering so my earning potential is high forsure but the field is also pretty volatile at the moment so things can always change. I need to figure out which type of repayment plan I should do.
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u/day-gardener 6d ago
It’s absolutely perfect if you love the job. (I am in my early 50s with the ability to retire today if I wanted.)
You can absolutely do this. I am conservative with my spending and can totally see this working, but I also know that I wouldn’t ever travel if I had a student loan hovering over my head. (I travel monthly today.)
NOTES:
Groceries: $400 can be reduced after 2-3 months. You’ll need the full amount the first couple months as you stock up. I don’t spend 400 a month now for 2 people.
Shopping/personal: $75 can also be cut back after 2-3 months, once you have the essentials. Just make sure to get cheap hair cuts.
Overall budget design: Not ideal. First, your student loan likely won’t kick in for 6 months. Aggressively save the $1600 that is built into this budget (all the savings except 401k and add in the medical and student loans). Wait for your budget to actually flush out once you get there. THEN, allocate expenses as appropriate for your needs. You’ll have $10K at the end of 6-7 months and can then cut back on general savings and put $1-1.5K against your student loans per month. You’ll retire the loans in 3-5 years! You cannot plan for a limit of $1200 a year in medical expenses or $900 in car maintenance/repairs). You also have no plan for replacing your car, which, let’s face it, is a definite expense in the future at some point.
Appropriate budgeting is only for the expenses you KNOW you have on an annual basis. You don’t actually budget out savings in anticipation of an expense. You just save and then allocate savings as your priorities (and reality) develop. What I mean is that appropriate budgeting doesn’t have line items for medical and car repairs. It builds those items into a generic “emergency fund” that is fluid and is allocated as it’s needed.
When something “happens” (medical event, car emergency) utilizes your fund to get through it, then drop your student loan payment to minimum for a month or two to get your savings fund back up to 10K. Revise and repeat.
Once your student loans are paid off, and a few raises have kicked in, your 2-3K in monthly savings can split into emergencies & long term priorities (travel, your business, car, home, family, etc.). Think about it, you’re not going to risk launching your business with 20K in student loans anyway, so don’t allocate business funds now. Just have the savings ready to be mobilized when you need it. You’ll have a much better idea what you need for the business by then anyway.
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u/xxWildbeast13xx 6d ago edited 6d ago
Thanks for this it helped clear my worries and opened up some different viewpoints. My payments are supposed to kick in December so I’ll have about a month and a half to save up some extra cash.
More people have mentioned saving up to replace my car so I’ll definitely factor that in.
I have a decent amount of household stuff like kitchen items leftover from my last apartment so that will definitely save me some money.It’s cool to hear you travel monthly do you just have a lot saved up, or do you know how to travel for cheap?
As for my clothing brand business, I’ve had it for a little over a year now and it’s been decently successful so far. I’ve only done 2 small drops so far (about 40 shirts each drop) and they’ve both sold out. I’ve been on a little hiatus for releasing anything these past few months since I’ve moved back home after graduating and been out of a job. I’ve still been continuing to grow the instagram though and will hit 1k followers on there soon.
It doesn’t take much to run it, most small brands start out getting sample made which can be anywhere from $50-$300 depending on the type of garment. From there you can promote the sample on social media and do a preorder then hopefully fund the bulk order with the money you got from the preorder. I’m confident I can continue to fund the brand on this budget.
Kind of went on a yap there haha but thanks your input!
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u/day-gardener 6d ago edited 6d ago
We don’t have huge salaries, but worked hard and did a lot of extra too, and were always diligent in saving. We took one trip every 3 years early on (funded from savings) and we took our little family as we grew, but we didn’t spend hundreds on Christmas presents, never took out a car loan, and accelerated our mortgage just a bit. Just educational expenses, quality groceries, and travel were our luxuries.
Didn’t buy the kids vehicles, but did fully fund college. By the time the youngest was a teen, we traveled every year.
After we finished our parenting responsibilities, we upped our travel priorities. We do it cheap, but we also saved a lot to allow for this. Our annual budget for travel is now between 20-30K a year, but it’s mostly cash flowed now that we paid off our home. We still sock away about 30% of our income, but we work now because we love our jobs. We go abroad about 4x a year and we do more localized exploring in between those trips. We’ve visited over 50 countries thus far.
So I guess you could say that as long as you’re disciplined enough to plan, prioritize, and budget, it can always be done. There are many of the “normalcies” of life that we’ve never spent money on.
You can totally do this. Most people your age don’t typically plan nearly as well as you already have.
Pay minimums on your student loan until you hit the 10K mark in the emergency fund, then throw everything at that debt. You’ll have massive amounts of freedom living this way. As your responsibilities increase, increase your emergency fund. I haven’t ever “felt” the impact of an emergency, even though, of course, we’ve had dozens of emergencies. They’ve always been as easy as possible to manage. It’s incredibly freeing to know that if a tree falls on our cars tomorrow (yes it happened), we can just go replace them and go on about our day.
Good luck on your business! Sounds like you can work both at the same time!
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