There’s a fantasy that many have of walking the streets of the Big Apple, soaking in the culture and historic sights as they approach their extravagant high-rise apartment. Unfortunately, it’s often an unobtainable dream, but what if you scale it back a little? Could it be possible to live comfortably in New York despite all you may have heard about its incredibly high cost of living?
The reality of living in the Big Apple fluctuates based on a number of factors, and with a little help from a popular internet forum, we’ve broken down the primary ones that dictate how much it really costs to live in New York.
Pick Your Borough
New York is a very big state. Big enough, in fact, the city itself can be divided into five sizable boroughs. As one can expect, life in each borough is quite different, with Manhattan sporting that dream New York lifestyle. That’s also why, per Realtor.com, its median housing price in October 2023 was $1.5 million.
On the opposite end of the spectrum is the Bronx, which Realtor.com shows as having a $349K median listing price. Landing between those at around the $500K to $800K mark are Queens, Staten Island, and Brooklyn, all of which offer completely different ways of life.
Renting vs. Buying
The cost of living in New York could be higher or lower depending on if you decide to rent or buy your home. Which will cost more actually depends a bit on how long you plan on living in the Big Apple. As prestigious buyer’s agency ELIKA Real Estate explains, renting long-term will wind up being more expensive than purchasing your home and carrying a mortgage.
One cost-saving benefit a mortgage has over rent is the tax break you receive on the interest you’ve paid, and that can be a decent chunk considering the housing prices in New York. However, before buying, you have to think about how long you’re staying in one place, the market trends, and the cost of repairs. If the circumstances are right, renting could wind up being a little cheaper.
Overall Utility Cost
New York is a multi-season location, meaning you’ll be using heat and air conditioning almost equally throughout the year. Add on water, gas, phone, and internet costs, and monthly utility costs can add up. According to a Forbes breakdown, the average American household spends just over $429 per month on utilities. That figure does include streaming services, an added cost that hovered around $40 to $50.
The same breakdown showed New York’s utilities to average at $433.70, just slightly above the national average. Taking advantage of programs through the electricity company, conserving water, and cutting back on internet and streaming services could drop that cost significantly.
Factor Taxes Into Your Expenses
One factor that makes New York so expensive is its tax rate. Unlike states like Florida and Nevada, New York has a state tax, and compared to most states with a state tax, it’s not cheap. According to Turbo Tax, New York has the seventh highest personal income tax. When you combine state and local taxes, New York has the highest rate at 12.7% per the 2019 State and Local Tax Burden Rankings study.
Annual Health Care Costs
According to ValuePenguin, a consumer-friendly subsidiary of LendingTree, New York’s health insurance costs come in at 39% higher than the national average. A single adult on the lowest tier can expect to spend an average of $575 per month. Add in a spouse and one child, and that number more than doubles to $1,432 per month.
There are ways to reduce that cost, such as the low-income NY Essential Plan, Affordable Care Act (ACA) Cost-Sharing, and ACA Tax Credits. However, the maximum allowable income for these programs is relatively low considering the state’s cost of living, meaning lower middle-class families likely won’t qualify.
Consider Upstate To Save Money
New York is more than just the city. While living in the heart of the Big Apple sounds appealing, there are plenty of places in New York worth calling home that won’t break the bank. Rochester, for example, is a beautiful city with median home prices hovering around $160K as of October 2023. It is a nearly six-hour drive to get from Rochester to Manhattan, so if that’s too far, Albany is quite a bit closer, at only two and a half hours away. In Albany, you can find homes in the $250K range, which is still a great deal cheaper than the city.
Saving on Monthly Car Costs
Owning a car comes with monthly costs like the car payment, insurance, and gas. In New York, you can add parking costs to that, too. Thankfully, when living in the city, you can really survive without a vehicle of your own. There’s plenty of public transportation that can get you to where you need to go, from buses to subways to walking.
Cost of Food
It’s true that you can find really cheap eats at local establishments, but in general, food costs in New York are higher than the national average. According to Numbeo.com, the national monthly food cost is approximately $422, while the New York average is $548. For further reference, the average monthly food cost in Rochester, NY is just one dollar over the national cost.
Plenty of Free Entertainment in the City
In cities like Las Vegas and Orlando, you may find yourself shelling out quite a bit for entertainment, whether you have children or not. New Yorkers, especially those living closer to the city, benefit from a host of free things to do. Central Park is one of the city’s finest free attractions, but even some of the city’s museums, like the Metropolitan Museum of Art, offer free museum hours. Keep your eyes peeled, and you may even catch free comedy shows.
Factoring in Income
The cost of living in New York may be a non-issue if you’re working in a high-paying industry. Remember, with a higher cost of living generally comes higher pay, so be sure to consider any increase in your income that may come with moving to New York.
According to Forbes Advisor, New York has the highest average salary in the country for 2023, putting it ahead of notably costly states like California and Hawaii.
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