Don't go into debt just to look good. Photo Credit: Thinkstock
Young people flock to New York to make their dreams come true, but life in the big city comes at a high price. In a cosmopolitan hub like New York, appearances are important, and no one knows this better than the underpaid, overeducated assistants working in industries like media, art and publishing. But how do you keep up with your banker friends or colleagues who are higher up on the pay scale?
Carrie Sloan, editor-in-chief at LearnVest, says no matter how important it seems to keep up with the Joneses, it's important not to get seduced into a lifestyle you can't afford and rack up scary credit card debt. "It's no fun paying interest for years on those leopard-print pumps you just had to have last season," she says. "In the end, feeling in control of your money will give you more confidence at work than looking super-trendy."
1. Reduce your fixed expenses: Fixed costs are expenses that are regular and do not change between time periods, such as rent and groceries. Sloan explains that if you can reduce your fixed expenses, you can make room for little luxuries in other parts of your budget. "If you can make changes like bringing your lunch to work, which costs an average of $1,000 a year, or getting roommates and spending $400 less per month on rent, that's more money that you free up for 'lifestyle' choices like dinners out or fun accessories," she says.
2. Create personal money rules: Laying down the law can help curb your spending. Create rules for yourself that you won't break. "It might be, 'I only buy items under $3 at Trader Joe's,' 'I never spend more than $10 on an accessory,' or 'I always bring my lunch to work,'" says Sloan. These rules may seem insignificant, but the savings will eventually add up.
3. Invest in a few key pieces: It may be important in your industry to look put together, but you don't need to spend a fortune to look the part. Sloan suggests finding key accessories, like a chic, versatile bag, or stylish glasses to have a signature look without having to keep up with short-lived trends.
4. Shop smart: Sloan suggests buying quality pieces at sample sales and vintage stores in posh neighborhoods. There are also a number of flash sales, but it's easy to get a little too click-happy when you're online shopping. "Create a separate email address where you have all of your sales emails sent, so you're not tempted to impulse buy," says Sloan. She also suggests creating a list of specific items you need for the season so you're not tempted to make an impulse buy.
5. Wait it out: Are you dying to buy something that's out of your budget? Sloan suggests pinning it on Pinterest and waiting for a few days. You may find you don't need it anymore. "Studies show that the brain chemicals that entice us to buy will dissipate if you instate a waiting period," she explains.
6. Get creative when meeting higher-earning friends: We all know trust fund babies, but sadly, having friends with money isn't the same as having money. Skip the Michelin restaurants and high-rolling nightclubs and suggest something more wallet-friendly, like going to a happy hour at a stylish bar that's still trendy but won't break the bank. "Another great trick is to meet for an exercise class, whether it's yoga at your favorite studio or free cardio kick at the gym," she says. "The purchases that tend to make us happier are experiences, not things, anyway." Even notoriously expensive exercise studios like Barry's Boot Camp, Pure Barre and SoulCycle in New York top out at $34 per class — that's less than dinner and a cocktail at most mid-range restaurants in the city.
7. Pick up odd jobs: As the old adage goes, "Mo Money Mo Problems." Actually, that should be amended to "No Money Mo Problems," so try to make some extra cash by taking on extra work. "Try and increase your earnings with freelance income," says Sloan. "You might freelance write, be a mystery shopper, do odd jobbs on Taskrabbit or tutor students. Not only will it bring in more take-home pay, it can be a resume builder."