Tales from the Wallet: Where You Live Is One of the Biggest Money Decisions You Make

how much rent to payOne of the biggest money choices you make is where you live. When you’re renting, the kind of rent you pay can hugely affect your savings and your cash flow. If you’ve bought, your mortgage payment may now be the biggest factor in what kind of job you can take.  (Pictured: Lodis Accessories – Audrey Continental Wallet (Aqua/Orchid) – Bags and Luggage, available at Zappos for $84 (in this color combination as well as a few others).)

Experts generally say that your rent should be no more than 25-30% of your salary. When I first started working right out of college, that was laughable — even with a roommate, I couldn’t find a place that I felt safe living in for less than $X, which wound up being 50% of my salary. Yeouch. On the flip side, when I got out of law school, that math (25-30%) meant I could have spent as much as 3X on an apartment — which a lot of my friends did. For some people, I think they thought they “deserved” to come home to a swanky apartment; for others I think they thought, “I will never see this kind of paycheck again! I’m going to enjoy it!”  But cut to three or four years later, and they suddenly didn’t want to leave that nice apartment or that lifestyle, and it had an affect on which jobs they looked for.  Hello, golden handcuffs.

My advice to people who are just starting demanding jobs: realistically gauge how much time you’re actually going to spend in your apartment.  My thought when I got out of law school was that I would not see my apartment, because I expected to be working long hours (and I did).  Furthermore, those crazy hours don’t really “break” for the first 2-3 years, which meant I stayed in my first apartment out of law school for about that amount of time simply because I had no time to search for another apartment.  So the rent you willingly pay, right out of law school, will have a huge impact on your savings, your cash flow, and it can even influence what kind of job you can take. Let’s take a look at the number differences between two hypothetical renters, each making $100K:

– Person A pays 25% of her salary for rent, or $2083. Over 3 years she spends $75,000 on rent.
– Person B pays 30% of her salary for rent, or $2500. Over 3 years, she spends $90,000 on rent.

Note that with the difference in money, Person A could have saved an extra $15,000, using it for an emergency fund, investments, or to pay down debt. (With interest or good investment returns, that could be even more.)  But really — depending on your city and your salary, even 25% can be a huge splurge.  How low can you go?  For example, someone paying 18% of her salary still has $1500 to spend on rent, but has $36,000 more than Person B at the end of three years.

So how do you decide where to live? Some factors to consider:
– Where are you coming from? In law school I lived with 3-4 roommates in the top few floors of a townhouse on Capitol Hill that was in such a state of disrepair that we seriously worried that the “picture window” would fall off the building. We had a mixture of “we found it when we moved in” furniture (a broken, funky arm chair stands out in my memory), “it was super cheap at the store” (a $.98 plastic tablecloth that we used in the kitchen), and “I’ve had it since college” (or even “my parents have had it since college”) furniture. So to me, it was a HUGE splurge to live by myself and get a studio apartment with a loft bed in a nice area of town (Fifth Avenue, between 15th and 16th Street.) (I believe it was 13% of my salary.)
– Safety. I had always lived in doormen buildings before in NYC, but I knew that a) I could get packages delivered to my office, and b) the company I worked for paid for you take a car or cab home if you worked past 8 pm. Keep in mind that many cab drivers will be kind enough to wait until you get inside the building if you ask them. If you’re in similar shoes, take a look at the surroundings of your apartment — are there businesses that are open and bring foot traffic? Restaurants are great, but even a bodega will do. Bars or “all night ATMs” might make me think twice, but it’s still better than an isolated spot. I once spent a summer internship living on a block that had a parking garage and some residential, non-doormen buildings on the street — I worried every time I stepped foot outside the apartment, no matter what time of day it was.  Similarly, take a look at your building’s security — while my studio didn’t have a doorman, it did have a video intercom and several doors that required keys.
– Amenities. A gym in your building is amazing, but weigh how much you’re really going to use it.  Laundry drop off/pick-up is one of the big things that I know a lot of friends made use of in doormen buildings.
– Other factors that will affect your budget and time. For example: is the apartment located so far from public transportation that you’re going to want to take cabs everywhere? If you have a car, are you going to end up a) paying through the nose for a private spot, or b) spend half your weekends hunting for a spot on the street, moving it for street cleaners, or worse?

(A note on buying:  I had some single friends who bought apartments when they came out of grad school, either on their own or with the help of their family.  It was the early 2000s, and so it turned out very, very well for a lot of them — after three or four years living in the space they sold it for crazy profits.  (One friend made a 65% profit on her apartment, I kid you not.)  Other friends found themselves stuck with a huge mortgage that restricted their lives as well as what future jobs they looked for.  Had any of my friends who owned been laid off or fired, I suspect they would have been absolutely panic-stricken.)

Finally, for my $.02, I would advise decorating your apartment with the theory in mind that if you see it, it will be at night. I’m a fan of dark wood furniture, jewel tones, and black accents — but when I got my first apartment after law school I decided to go with white furniture and a “mod” color scheme (inspired by one of my grandmother’s scarves) of navy, hot pink, and yellow. It made me happy when I came home at night, and it looked cohesive.  (Pictures after the jump if you care to see.)

Readers, what percent of your salary do you pay for rent or mortgage?  What things do you love about your apartment, and what regrets do you have?

(Above: my studio apartment with a loft bed (behind the bookshelf), where I lived from 2003-2006.  Pictures taken by my friend T when she came to visit in 2005 — it was a huge mess then, obviously!)


  1. Are the percentages based on before or after tax salaries?

    • Anonymous :

      I was wondering, too! Also, does it change based on an double income?

    • I always thought the advice was for a before-tax salary, so that’s how I did the math… good point though.

      • Calculating it before tax makes me feel much better about my percentage! Then that inspired me to calculate the percentage of my student loan payment and that made me frown (12%, yikes).

        • Anonymous :

          I always heard you calculate based on your take-home.

          My student loan payment is 51% of mine btw. Hope you all feel better :)

          • If you have federal student loans you can repay based on income, not more than 15%. Plus, after 25 years of paying this way the balance gets forgiven. 10 years if you go government or non-profit. Further restrictions apply but those are the basics. Check it out! 51% sounds painful!

  2. AnonInDenver :

    Unlike many of my BigLaw colleagues, I pay only 10% of my monthly salary on my mortgage. My husband and I are quite comfortable in our townhome and have fixed it up nicely with quality furniture and fun artwork. More than anything, I wanted to avoid the golden handcuffs and I now see that I have more flexibility (and therefore a little less stress) than some of my coworkers. In theory I could change jobs and take a 50% or more pay cut and we’d still be fine with our current mortgage. Or, if I stick it out in BigLaw, I can sock more money away for retirement or a return to school.

  3. Less than 10% of our combined household (my husband and my) salary, for a very nice townhouse in a very nice suburb.

  4. Less than 10%.

  5. My husband and I just bought our first house after renting for first three years our marriage. Our rent was only 10 percent of our income and our mortgage is 25%. We could have spent much more on our house but we wanted to buy smaller so we could pay it off sooner.

  6. Diana Barry :

    Ah, apartments. Sometimes I miss those days!

    At my first job out of law school I made 125K, DH made 75K and our apt was 2500/month including parking, in Boston. Then we bought a condo (2-unit building, no parking) and our mortgage was maybe 2800/month. After 3 years in that place we sold and bought a house in the suburbs – our mortgage now is 4900/month including real estate taxes. DH makes more now although I make less, so the percentage is still low for our combined salaries, maybe 20%.

    Our big reasons for moving were (1) getting a driveway and (2) more space. We had street parking in the condo, which was awful – 30-60 minutes of driving around looking for a parking spot every time we moved the car!

    We also had our first kid after we moved to the house, which was great – we didn’t have to move with a baby like several of our friends who had kid #1 before they moved out of the city.

    I never worried about safety and still don’t. We often leave our doors unlocked, it is a v. safe suburb.

    • SF Bay Associate :

      Can I ask about the unlocked thing? Genuinely curious. As someone who grew up in a city, the concept of not locking your doors totally baffles me. Why do you not lock your doors, even if you do feel safe in your lovely suburb? Since it takes only a few seconds to lock a door, I’m confused why one wouldn’t do it.

      • Growing up we never locked our door mostly because that meant that no one would ever get locked out. We had a lot of doors that we used (front door if walking home, side door if using car, back door to let the dog in and out). Making sure all three were locked would take more than a few seconds. My brother and sister and I never had to worry about having a key. We only locked our door if we went away for vacation.

      • WorkingGirl :

        That’s funny; I have the same issue, and I grew up in the city, where not locking your door was unheard of. I remember having roommates over the years who did not lock the door, and I just couldn’t comprehend why you wouldn’t bother to take the 2 seconds to just lock it.

      • So we don’t get locked out, and so people who come in all the time (my brother, our nanny) don’t have to fiddle with keys when they come in. When you’re holding a kid in 1 arm and groceries in the other, you don’t have a hand to get the keys out!

    • Anonymous :

      Love your pseudonym! I saw Anne Shirley on another post. You two should be friends :)

  7. About 30% of our combined salary, mostly b/c we are in a good (and therefor pricey) school district – the cost of our apt is on the (really) low end for the district. Husband is non-tenured academic and our life is always in flux (we move every 3-4 years) so buying is not an option.

    Kat, many of your readers have families – have you thought about getting a guest writer to write a post on some of these $ issues since the consideration is almost completely different for those w/ families compared to those w/o?

    • This is something I think about all the time right now as we are looking to move from a two bedroom condo to a house in the next year or two.

      I need to start that with the caveat that we are huge savers: retirement, college, and downpayment money. We currently spend about 10% of our gross income on housing and have some money to save each month after paying for daycare and saving for college. However, after we have #2 later this year, we will not be able to save much after saving in each or our retirement plans, 2 529 plans and paying childcare cost for 2. This makes me very reluctant to spend much on a house!

      Right now we are saving as much as possible for our down payment so we can hopefully take out a smaller mortgage when we do finally buy our house.

      • I just wanted to comment on your name, “NoTrustFund.” You just summed up my life. Both of my siblings have partners that have trust funds and it makes money conversations impossible! But the name made me smile.

  8. Currently pseudo-unemployed, so I don’t have a percentage of my salary, but my rent is very, very low for NYC considering what I get for it. I pay $600 a month. Admittedly, I split a bedroom with my BF in a 3-bedroom apartment, but it’s a huge apartment with a washer and dryer in the apartment in a doorman building with a 24-hour gym and rooftop pool, we all have our own bathrooms, and the other two roommates are never around, so the living room is basically used only by the BF and me. I’m convinced I have the greatest deal on rent ever for NYC. The kitchen is a bit cramped with 4 people’s stuff, and I’m not in Manhattan (but I’m the first subway stop in an outer borough) and sometimes I wish I didn’t have roommates, but the low rent completely makes up for all that.

  9. I’m in NYC and pay 8.5% of what I earned last year and 6.5% of what I expect to earn this year (my bonus will hit in May). My coworkers who used rules of thumb to set a budget for their apartments (a) convinced themselves that the rents in the trendiest neighborhoods were reasonable and (b) have saved literally tens of thousands of dollars less over the past couple years on the same salary.

    I’ve also noticed it’s easier to justify all sorts of expenses in the $100-200/month range when you’re paying a ton of rent. The mentality is – “well, it’s nothing compared to the $xxxx/month I’m already paying!” Or maybe it’s just a similar mentality that leads someone to pay a lot of rent that allows them to hire a pricy cleaning service, join the swanky gym, etc. without thinking much of it. In any event, I feel like I’m doing much beter for myself by keeping rent low and evaluating each and every expenditure as though it matters.

  10. We spend 25% on rent. I feel a bit guilty now seeing others’ lower numbers, but I spend no money commuting (I can walk to work).

    • L from Oz :

      Me too, and being able to walk or cycle makes all the difference. I could pay less and give up the spare room, but then family and friends would have to pay for a hotel when they visit, which neither my parents nor sister can really afford, and then they would visit less, so I’m willing to fork out the extra. Besides, after years of living in a studio, it’s awfully nice to have a whole two bedroom flat to myself. Yippeee!

      (I could do with a bigger kitchen though – it was that or a balcony, which I went for, but I regret not having space for a dryer.)

      • I am in exactly the same situation. Currently, our rent is 28% (which is what the FHA now recommends) but my husband is still looking for work and once he is working that percentage will come down by about 10%. But I walk to work and most places so I rarely need to take cabs and spend no money on my commute. It also means I’m in better shape because I walk everywhere!

    • I spend 24% of my gross, or 38% of my take-home. I also walk to work. My rent is very cheap for my neighborhood, too – I’ve lived in the same place for a while, and it’s rent controlled.

  11. Interested in this as I’m stressed out about moving. DH and I live in the suburbs now, and are planning to move into Manhattan when I start BigLaw. We have a huge beautiful space now and are clearly going to have to downgrade. We keep going back and forth between the decision to rent a crappy place and getting our of student loan debt earlier vs. renting in a luxury building, being happier, but extending the debt.

    • I just wanted to encourage you with your decision, in case you had second thoughts about moving to the city. We were in a similar situation, we lived in the DC suburbs and later moved into DC. We had a much bigger place in the burbs, but I am SO much happier living in the city. I love the hustle bustle, the short walk to work, and increased opportunities to socialize with friends after work. Just wanted to give you some encouragement that you’re doing the right thing living closer to work. It was very frustrating for me to leave work late and then have almost a 50 minute commute back on the metro on some days. I love walking home in 15 minutes!

    • Isn’t a middle ground possible? I live in Manhattan and I live in a gorgeous old pre war building but it’s non-doorman, non-“luxury” (we have a building office where all packages get delivered) with a huge south facing outdoor space, huge windows, tall ceilings,. great neighborhood, and I am happy as all get out. FWIW, our rent is about 10% of my and S.O.’s take home pay, and all utilities are even included.

      • I agree with AIMS–I think there are definitely plenty of great apartments that fall somewhere between “crappy” and “luxury.” Finding them can be a pain, but when is apartment-hunting not a pain? (Of course, on the other hand, you could get super lucky and the first place you see is great).

      • Just wanted to make a correction. I suck at math. I don’t know how I arrived at 10%. S.O. + I pay about 15.6% of combined income. Which I suppose is a big benefit to combined income. If I were to stay in our apt alone, it would be more 27.6% of my pre-tax income. NYC is a fun place to be single, but it can also be prohibitively expensive to live on only one income here.

        And, of course, if the number is supposed to be calculated based on your take-home pay, then we are all in much, much worse shape.

      • There’s definitely a middle ground. We live in a (relatively) decent-sized 1br in a lovely non-luxury pre-war building in a very nice section of Manhattan right next to a huge park. No doorman, but I don’t like when people see us coming or going all the time anyway. Our super accepts packages, so that’s not an issue. The rent is about 17% of our combined pre-tax income. I only wish our apartment got some sunlight.

        Plus, we’re paying less in rent than we were for our tiny, fourth floor walkup with no live-in super and plenty of live-in roaches and other critters. Hold out for better than crappy!

        (Note: I’m not in biglaw, and DH works for the government, so you should have no problem finding something you can afford if you’ve got NY Biglaw salary)

    • I concur about finding a middle ground. My husband and I settled on the lesser side of “nice” to be able to save more, and we really wish we’d upgraded just a step or two from the minimum we were willing to accept. We have an INCREDIBLY tiny kitchen, which annoys us all the time when we’re trying to cook, clean, or unload groceries. The extra ~$150 a month we’re saving is really not worth it. We can easily afford the extra money, but we figured it wouldn’t be that bad, and why not save as much as possible while we’re young? We’ll probably suck it up until I’m done with grad school, but our next place will definitely be in at least the “middle” range. You have to come home every day… you should feel happy about walking in the door, not sad or second-guessing or annoyed. You don’t have to feel like a rockstar, but definitely “content”.

      • Thanks for the advice all, and the encouragement LB. I hope we will be able to find a middle ground at we are happy with.

  12. 17% for mortgage in suburbs of DC, but we have money flying out the windows with 2 kids in private school, and job situation could change dramatically, with little notice :-/

  13. Any discussion of housing costs should take into account transportation costs as well. Increasingly, studies have found that the savings for cheaper housing is largely offset by transportation costs (Beltway Burden is one such report for the DC area.) Granted, this probably affects buyers more than renters, as renting may be for a shorter duration.

    Regardless, the lesson is important: Know which of your costs are fixed and which may change. If gas prices rise 25%, how does that affect your budget? What are normal rent increases in a given building? How long do you plan to stay there? How much do utility costs vary between similarly-priced apartments if one is poorly insulated?

    Too often people just focus on one number — the actual rent (or mortgage payment) without thinking of all of the additional numbers that are a function of your decision.

    • Yes! And even if you don’t drive, but take a commuter train or the subway, if you add the cost of that to suburban rent sometimes you come out even, or even behind, the expenses for living closer in. Public transportation here can be extremely expensive when you have long rides, go during peak hours etc. When my boyfriend and I moved to the DC area, we found it was cheaper to pay District rent in an area where we could both walk to work. No regrets.

    • Completely agree. In my first out of college job, my rent was more than 40% of my take home (studio for $600, took home $1400 a month). But, I lived 10 blocks from my office and within walking distance of many friends.

      I had looked at some shared situations in the $400-$500 range, but many of them would have required me to get a bus pass at $100+ a month. Not worth it!

    • For us it’s the opposite. The government gives me a public transportation stipend. Since I live close, it covers most of my transportation costs. DC public transportation is fairly expensive. A friend who commutes from the suburbs spends about $15 a day for public transportation.

      • Duh. I misread the comment. Agreed about the increased cost of transportation with living in the burbs. Not to mention the quality of life issues with spending that much additional time commuting.

    • Agreed too! Also – you have to think of cost of living for each neighborhood. My boyfriend and I decided to pay a little bit more in rent to live in a nicer neighborhood, but our grocery/bodega/local restaurant costs have gone up dramatically and we didn’t factor that into our budget.

  14. Anonymous :

    We spend a little more than 20% of our salary on our mortgage. I admit that I think we stretched (DH disagrees) especially considering that we did not end up being able to sell our last house. So, I have been learning how to be landlord the last 3 years. Being an lawyer, I would think being a landlord wouldn’t be so bad, but I hate it and I am just about the softest landlord there is.

    The reasons that we decided get a house that is more than we “needed” is we have 3 kids and we plan to be in our house forever. We have a nice yard, anice view, and a good neighborhood. Admittedly, we do not have a lot of the upgrades (granite countertops, tile bathrooms, hardwood, etc.) We decided to focus on the things that we really wanted, and we can update later if we want and can afford it. We do spend a ton of time at home, and I love our house. It makes me feel good to look out at the beautiful views. We also love gardening so we spend tons of time in our yard.

    • I think you made some great points– where you live is not just where you sleep and get packages, but where you actually live. Being able to garden, being in a good school district and (if you are buying) loving your home and feeling like its home, instead of always wanting to spend $$ to upgrade or improve. My point is that there are a lot of intangibles that go into the equation that sometimes make the 5% difference totally worth it.

  15. 33%, and it would be impossible for me to live in NYC for less – I live in Queens, pretty far out, and work in Midtown as the knowledge manager for a consulting firm. My job, while requiring a master’s degree, also doesn’t bring in the bacon the way law school or an MBA might.

    On the plus side, I don’t have anywhere near the loan debt, either, despite going out of state for graduate school.

  16. I pay 30% (including utilities and internet) of my pre-tax income, in NYC. Said income is a grad student stipend, so by NYC rates I have a pretty good deal for the area – and a 5 minute walk from my office (no need for a monthly metrocard). The location thing was important, both from a convenience standpoint and financially. I can go home for lunch, for example, and I feel comfortable walking home when I work late versus standing on a subway platform or looking for a cab at midnight. My program definitely does not pay for cabs after 8 :)

    Another interesting tangent – what small things do you find yourself willing to pay extra for in a house/apartment? This apartment is at the high end of the price range I set for myself, but the corner windows in my bedroom sold me on it – the amount of sunlight I get does wonders for my mood, so definitely worth $50/month.

    • a dishwasher. (though I suppose only in nyc would this be considered an “extra”). I hated handwashing dishes with a burning passion. I just ended up buying disposable plates/cups, which was such a waste in terms of money/environment.

      • AnonInfinity :


      • We wound up getting a portable dishwasher – keep it in a corner, then wheel it over and hook it up to the sink when it’s full. My lease prohibits washing machines but says nothing about a dishwasher so I figure I’m safe. It’s been a lifesaver!

        • Oh, my goodness, I didn’t know portable dishwashers were a thing. You’re my hero.

          • It was probably the best $200 we ever spent! Ours is a Danby, I think. I can’t tell you how many fights it’s saved us over the years because it took DH’s sub-par dishwashing skills out of the equation.

        • I could definitely use that as my tiny kitchen has no space for a permanent dishwasher!

    • I love corner windows. Corner isn’t actually nec., but multiple exposure in a room def. appreciated.

      I would pay extra for:
      — outdoor space. Our current rent is not unreasonable at all, but I would def. be willing to pay more than I pay because of our balconies.

      — a washer and dryer. This is my dream. I would def. throw in an extra $100 to have one, maybe even $150 (for non-NYC apt people, this is like the holy grail of NY real estate; even most “luxury” buildings do not have W&Ds).

      • South of Houston :

        AIMS, I am with you! I am apt hunting right now in NYC and any place with a W/D in unit definitely gets more consideration. I agree that $100-150 is worth it given what a HUGE pain laundry is in NYC if it isn’t in the building (esp without a doorman). After 5 years of lugging my laundry to the cleaners late at night / on my precious weekend free time, I am done.

        • South of Houston, one thing I will recommend to anyone who has to carry laundry is a laundry backpack (google it, should come up). It’s basically a huge laundry bag with thick straps but it makes the whole thing infinitely easier than trying to lug a bag (I once got so frustrated, I kicked my laundry bag down 4 flights of stairs).

        • I now have it in my building, but I’d pay so much more to have it in the apartment. Our elevator stops going to the basement around 9:45 pm, and I don’t get home early enough to wash and dry my clothes before that, leaving me to do it all on the weekends and compete with everyone else.

      • come join me in the outer boroughs! I have corner windows, outdoor space, and a washer and dryer in my apartment (and an awesome view of Manhattan, rather than say, an airshaft).

        I know a lot of people feel like they have to live in Manhattan to be close to things, and I used to agree with them, but now I’m a huge proponent of the outer boroughs, particularly if you find the neighborhood that’s right for you. To me, the extra space is completely worth the extra ten minutes I spend on the subway. I lived in the Village area during law school, and while I occasionally miss being in the middle of all the restaurants/shopping/general awesomeness that is the Village, the space/amenities and astronomical drop in rent I gained were well worth the move. Perhaps its because I’m a Southern transplant and I miss the trees and the space. Of course, I have the one or two friends who just refuse to come to my apartment “because it’s just so far!” I’m literally 4 subway stops from them, or about 7 minutes in a cab unless there’s traffic on the bridge/tunnels. I’m closer than when I lived downtown. Crossing the river does not put me in a magical world where the subways move slower, I promise.

      • As a Texas, I find it un-thinkable that an apartment wouldn’t have at least washer/dryer hook-ups and a dishwasher! How crazy! Then again, I’m sure most NYC-ers can’t imagine driving everywhere and spending so much on gas, so I guess it all evens out in the end :)

        • Not only do most apartment not have the hook ups, many buildings strictly prohibit them (and these include buildings in which you buy, not just rent)! But, as you correctly point out, I don’t know how much gas even costs or is supposed to.

          • Well, it’s “cheap” here at about $3.60/gallon. I filled up today for about $60, and it will probably last me 1-1.5 weeks. I have a pretty big commute to school 2 days per week (~30 mins with traffic), and a 15 min commute to church 2 days per week. However, work commute is ~7 mins :) I probably drive about avg. though, so $60 per week is probably normal in this area. When I first started driving, gas was .89 cents per gallon = $12 for a tank!

        • I live in the center of a big city in Texas, pay $1400 a month for rent, and don’t have washer/dryer hookups…

      • Sydney Bristow :

        Outdoor space and washer/dryer are definitely the first 2 things that I would pay more for in NYC. After dragging my laundry up and down 4 flights of stairs and around the corner today, I’d pay an awful lot for a washer/dryer right now!

    • SF Bay Associate :

      I will not consider an apartment without a washer/dryer, a dishwasher, and a garbage disposal. No way, no how. To get that w/d, I’m paying probably another $125 a month, plus utilities, but it’s still totally worth it to me. My rent is about 15% of my paycheck/ 30% of takehome after taxes, 401k, etc. This thread is making me feel like I pay too much, but I have to remind myself I live in one of the most expensive areas of the country. And I need laundry. Sigh.

      The thought of coming up with a down payment in this area seems hopelessly out of reach, let alone a part of this area in a good school district.

      • SF Bay, not to veer too far off topic, but what is the common wisdom on buying in SF itself? I’ve probably mentioned on here before that my husband and I are planning a move this summer/fall. We will have a decent-sized chunk for a downpayment if we wanted to buy (and it honestly might be cheaper for us to do so, if we can stay put for a while — the mortgage interest deduction is helpful!). Is public school in the city itself not even a viable option? We could definitely afford something nice enough, but not if we’d have to factor in future private school tuition . . . .

        • SF Bay Associate :

          Kitty, I don’t know that there is a common wisdom. There was an article recently in the Chronicle from some finance expert who announced he was never buying in SF again because it doesn’t make financial sense here. I’d consult with a finance planner-type who works with SF people in order to make an informed decision. I know I can’t afford to buy in SF in areas that I want to live in on my biglaw salary.

          Neighborhoods vary GREATLY. What you can afford to buy into may not be a good place to grow up. I grew up in a poor, dangerous area of the city because that’s where my parents could afford to buy. I also took a bus about 45 minutes a day to get to school.

          I am 100% a product of San Francisco public schools. I had some truly great teachers, and a lot of bad ones, and this was back in the 80s and 90s when schools were much better funded then they are today. And that’s setting aside the massive budget crisis that the state is in now, and the threatened billions in further cuts to public education.

          The SF public school system is complicated – we are one of the many cities that is under a desegregation consent decree, so the school that’s down the street from your home in the nice neighborhood is very not necessarily the school your kid is assigned to.

          I have friends who are SF public school teachers. They are smart, hardworking, and completely devoted to their students. And there are a lot more hard working, devoted teachers, staff, and parents in the schools. But there is not a critical mass of quality at every school. So there are a handful of good schools that everyone fights to get into and a lot of mediocre ones, and some bad ones. There are numerous SF parent boards online that discuss this, and how to successfully navigate the system. Also look at the API index online. And that is setting aside statewide funding issues. Class sizes are getting bigger, programs are getting cut, just like everywhere in the state and most of the country.

          So I’ll answer your question a couple of ways:
          1) I am a biglaw attorney, so apparently SF public schools weren’t a total disaster, and I wear my public school education with pride. I believe in public schools, and I support all efforts to increase funding. I’m proud and glad to have grown up in and gone to school with kids from an ethnically and economically diverse community, which private schools don’t offer. And private school in SF is easily $10-20k a year.

          But 2) I personally will not send my hypothetical child to SF public school, or almost any public school in CA beyond the very elite enclaves that I can’t afford to buy into, like Burlingame, Palo Alto or Walnut Creek/Lafayette. I won’t send my hypothetical child to SF public school as a political statement about my support for public education because I know too well what they will miss out on.

          I’m happy to talk to you offline about this, and talk with you about aspects of the neighborhood etc.

          • I’d love to talk more with you offline. Do you have an email address that I could use? Just let me know what’s easiest.

          • SF Bay Associate :

            Kitty, let’s both email Kat and she can exchange our info. Hopefully she won’t mind too much :).

            Arachna, I can’t tell which request you are seconding, but on the off chance you are seconding a request about buying in SF, I’m happy to talk to you too.

          • Done and done :) Just waiting on your end ;)

          • SF Bay Associate :

            I also sent to Kat, so whenever she gets a chance, I’m sure she’ll take care of it.

        • Second this request.

          • Silicon Valley in House :

            Kitty and Arachna — Reading this late, so I am not sure you will see this, but I (1) bought in SF and (2) have two children in public schools. Let me know if you want to chat off line and I will use the same method SF Bay Associate describes.

          • Silicon Valley in House :

            oops — meant to say private schools

    • A large kitchen. I like to cook. It’s probably not an “extra” though; it just required me to be more picky when I was looking at apartments.

      My real extra would be a gym. I do work out regularly, and it’s so convenient, plus the extra rent is cheaper than a gym membership.

      A WD (or even just a washer; i usually hang to dry anyway) would also be my holy grail, but to get it I’d have to pay, like, $400 more a month and that’s not worth it.

    • I’ll pay extra for a fenced yard for my dogs, and a neighborhood I can walk around and actually reach a destination (restaurant, bar, store). I live in a Southern “driving” city, and yards are definitely a possibility, but come at a cost if you want to be in town. Neighborhoods with walkable destinations exist only in town. I am actually moving to get both of these things – at a 50% rent premium. I’ll still be paying less than 10% of my income, but I can’t afford to pay more due to large school debt and non-existent savings/retirement funds in my mid-thirties.

    • Anonymous :

      washer/dryer in unit – i live in jersey and every single day this winter when i saw people lugging their laundry in the snow and ice to the corner laundromat, i hugged myself with pleasure!

      second would be dishwasher. Although I’ve lived in tons of older apartments in states like Iowa, TX, that just don’t have them. I got used to handwashing – but I think if there’s no dishwasher, the sink needs to have two sides for washing/rinsing.

  17. We spend about 13% of our net income, which in the Midwest buys a four-bedroom/four-bathroom house in a great school district. I pay for my long commute though–about $240 a month for parking and probably $400 for gas. So, all told, closer to like 20% of our income for where we live.

  18. Praxidike :

    11% on rent. Our mortgage was about 15%, but we recently sold.

    I am interested in hearing what you ladies think about buying a townhouse/condo vs. a house in terms of resale value. I really want to buy a townhouse/condo, but my husband thinks that they are a terrible deal for resale value, and therefore wants to keep renting. I HATE not putting anything up on the walls and not feeling like the space is really my own. When you are buying for the long term, do you consider the resale potential?

    • Two cents :

      I think most people would advise that a house is a better investment in terms of resale value, but it also depends a LOT on location. We bought a townhome that is across the street from a metro. We now use it as an investment property and did not have much troubling finding a renter. The other townhomes in our area sold for a bit less than what it was purchased for, but not by much, and I’m impressed that the value has not dropped more considering the housing market has tanked. The townhome is in the DC suburbs, to give you an idea of location.

      I think condos in a city are generally a good investment, particularly in desirable neighborhoods. For example, I think buying a condo in Dupont/Logan is smart, but I definitely wouldn’t buy a condo in the middle of nowhere suburb.

      • I like the idea of condos for cities, but avoid them all other places if you can. I am currently clerking in a trial court in a popular seaside resort city, where condos became king in the 1970s-90s.

        Now they are all imploding financially, physically, and interpersonally. The boards can be real nightmares to deal with.

    • Townhomes/condos tend to be the last to go up in value and first to go down. That means you can get some amazing deals right now, if you can get the financing. I know in my hometown there are some condos in desirable urban areas that are so cheap that it would really be hard for the values to go down any more. Even if they did, if you paid off the mortgage and had to take a loss, you’d probably still end up paying less in the mortgage/fees than you would have on rent.

    • Sad about my schedule :

      I’ve heard/seen some very scary stories re. condos – issues with the Boards, or unplanned special assessments in the 5 figures (I’m in the Bay Area). To me, it was worth paying more to have the autonomy of my own house. Of course, that also means that I have to budget for a new roof, unplanned repairs, etc., and I have to deal with the contractors (can you tell I bought a fixer-upper?). When I was looking, for me to consider a condo, it had to be well-managed – I would only look at condos run by a professional property management company. I know several people who think I was too conservative on that point. YMMV.

  19. Similar to Lawgirl; mortgage = < 10%, but nanny + kids' private school (straddling a toddler & school-ages) = 18%

    • Can I join the club? It’s amazing how little money I have when we make so much… I can’t even think about most of the purchases here, everything goes towards childcare / education.

  20. spending just 30% of my first year associate salary on rent would mean I have to live in an apartment with at least two other people… sigh. Stupid non-bursting housing bubble and low salary (I’m not in the US).

  21. Lost in Dall-Oz :

    Ok, first post, and MAJOR hijack.

    I am a second year attorney and landed my first firm job after hunting for about 8 months. The position lasted a little over six months before I was pushed out by a little nepotism. (Managing partner’s son graduated in 2010 and couldn’t find a job, so out I went). Since then, I’ve been struggling to find anything other than doc review. And as a result, I’ve decided to go into legal recruiting with an international recruiting agency with a strong reputation and good compensation structure. That said, and, yes, finally getting to the point, I’m concerned I’m taking this position for the wrong reasons and would love to get some feedback from more seasoned attorneys on here.

    My last position was miserable! It wasn’t the long hours, because I had come from a retail management position which actually had even less flexibility in personal time, but my boss was a terror. And, I’m just now realizing how badly it affected my life during my time there. I was practicing in commercial litigation, and rather than have the normal learning curve you may find in big law, I was handed some case files and basically told, “go.”

    I had no guidance. I had little experience from my internships and externships, and when I attempted to ask questions, I received responses like, “Well, of course you don’t know what you’re doing. You’re a girl, and girls are stupid.” Of course, it had nothing to do with the fact that I was just out of law school and had never practiced. I honestly have no idea how I bit my tongue. The other associates in the office (also all 1-3 year women attorneys) told me it was nothing, and “He’s harmless and doesn’t mean anything by it.” But, now, in hindsight, I find it to be absolutely infuriating. In weekly firm meetings, he would make comments to me in front of the rest of the office, saying, “I’m going to teach you how to be a lawyer, if it kills me.” The problem with this statement, he never taught me anything. Absolutely nothing. Everything I learned, I learned from form books, CLE’s and other lawyers not associated with the firm. It became so bad that I dreaded going to work everyday, I cried in my office (of course with my door closed where no one could see), couldn’t sleep and became incredibly depressed and increasingly more despondent as time went on. I honestly believe that the best thing that ever happened to me was getting the boot.

    Has anyone had similar experiences? Should I give up or try to find a firm that will provide me a healthier environment in which to develop as a young attorney? Not looking for pity, just genuine advice. Thanks in advance for any comments/suggestions/advice!!!

    • Wow, give yourself a hug. You describe me, except that I’m still in the job, and my bosses aren’t jerks (at least on purpose). But the zero training, the expectations, the constant stress of not knowing what you’re doing and feeling inadequate about that. Yeah, that causes depression, and it sucks. I’ll stay tuned for advice, because I’m getting ready to chuck it and look for something else. I hope it’s not always like this. I didn’t expect to have my hand held through the early months, but I feel like they are actively hiding the ball from me sometimes, and then are disappointed when I don’t magically give them what they want. Is better out there? I feel so ungrateful, since I (1) HAVE a job, and (2) work with genuinely nice people (aside from the lack of management skills).

      • Here it seems to be the opposite. Baby steps, baby pieces. Assignment by assignment. I’m in my forties (late to law), have run my own business, run a household as a single parent, have managed international and cross-continent moves — makes me crazy! Not that the law isn’t hard, but I feel like I could be doing so much more for the firm? Or is it that I need not to be in a firm? I am a second-year associate in the small office of a boutique firm, with a two-year federal clerkship and lots of legal interning/externing as part of my schooling. Advice, appreciated!

    • Anonymous :

      There are better — much better — places to work as a lawyer than the place you describe. I worked at a terrible firm. I had all the “symptoms” you had. Really, my life was in a shambles after a year. But I also had the satisfaction of blindsiding them with my departure announcement that I was going to work at a firm they consider “the enemy.” I don’t know that legal recruiting is a bad move for you. I know people who love it. But if you think you still want to practice, you should give it a shot somewhere else. Firms are driven by personalities, especially small firms.

    • noname4this :

      Get thee to a therapist! I am very serious. I went through exactly the same thing at my second firm. The partner I worked for (and joined the firm to work with) turned out to be a big, mean bully. It only took 9 months for her to transform me from a confident self-starter to an anxiety-ridden, teary insomniac.

      My therapist recommended anxiety meds but I decided to try just talk therapy first (not that drugs are bad–I just wanted to exhaust non-medicated options first). Ultimately, I had to learn how to identify my “cognitive distortions” (still have the cheat sheet in my desk drawer) so I could “reason” my way out of my anxiety. It sounds weird but it really worked for me.

      My new firm is great and, yes, it was a struggle. I think just going back to a firm triggered the anxiety and fear. It actually took about a year of working in a supportive environment for me to feel “normal” again.

      Remember, it’s not you, it’s that partner. Trust karma.

      • Could you give some examples of your cheat sheet? I could use one too.

        • noname4this :

          There are a bunch of lists on google. The one my therapists used is similar to this one:


          Please know that it took a few months for me to learn how to use this list effectively and to get a good grip on the distinctions/overlap. There was even a point where I became anxious about figuring out which distortions I was assigning to my (distorted) thoughts. This list was my tool, not my cure. You may need a different tool.

          The therapy really was invaluable for getting me to the point where I needed to be to use the list and identify my distortions as they occurred. This is the just technique that worked for me, it might not work for you. Truly, if you are to the point where you think you need a cheat sheet, you should seek out a therapist. If your insurance doesn’t cover mental health, check out your employer’s EAP. I got my therapy free through the EAP.

  22. My husband and I, our 2 year old and our 50 lb dog live in the 620 square foot one bedroom house he bought when he was single in 2004. On the one hand, it is small. We’ve put probably 20K in upgrades that directly increase our storage (a new attic, new closet, etc). On the otherhand, when he got laid off in November, one thing we didn’t worry about was how we were going to pay our mortgage. When I became (surprise!) pregnant with our son, we freaked out for a little bit, certain that we would need to move to a bigger place. This was in mid 2008 as the real estate bubble was bursting. We calmed down and dug in, deciding to see how it went. By 2009 the realestate market had totally tanked, and my husband was really starting to have issues with his job. We debated, but hung in there. When the other shoe dropped after Thanksgiving, I was so so so grateful for the stability. I was so glad we weren’t upside down in a million dollar mortgage, worrying about how we would sell it to move to a new area. Now we are moving, and while I’m unsure whether we’ll see at any sort of a profit, the incremental loss we will take will not be significantly painful to us.

    Everytime I curse the fact that I have to move a box of diapers to get to my special occaision shoes, I balance this with the fact that I am sleeping well at night now, not worried about financial ruin. For us, living way beneath our means from a mortgage perspective was very advantageous in the long run.

    (That being said, I am dreaming of a three bedroom house as our next residence…)

    • I should also add that staying in our house meant that both my husband and I were less than 2 miles from work (and moving would have meant a substantive increase in commute) and that was also really important to us, especially with on-call responsbilities.

    • Well said. We bought a place well below our approved mortgage amount. As the economy has soured, I’m glad to have a low mortgage.

    • Wow, that’s amazing how you all manage to live together in such a tiny space! I’ve never lived in a place quite that small, but I’m definitely of the mentality that bigger is not better. We recently downsized to a 1200 sq ft place (I know, it’s still huge, but not as huge as our 2200 sq ft home) and I’m so much happier. Less stuff to clean and everything on one floor.

      • Haha. 620 square feet sounds huge to me! It’s definitely as big as the apartment I grew up in, and more than 50% bigger than my current apartment.

    • Similar story here–small house husband bought when he was single, unexpected pregnancy, proximity to work, and real estate bubble burst. Oh, and the looking forward to something with more space one day… Rock on, sister!

    • Good for you! Although I am now a fourth year associate, I still live with my significant other in the same apartment I lived in during law school (550 square feet), and the rent is 8% of my pre-tax salary. We’ve managed to save up the 20% we need for a down payment on our first house and, although the current lack of space is incredibly frustrating, I think it will be worth it in the long run!

    • Seventh Sister :

      I have a tiny house, which cost plenty, but am so glad we didn’t listen to the lender/realtor/friends who said we could afford something even more expensive.

      That said, I’m about to start charging a fine to relatives and friends who say things like:
      1. This house is so small!
      2. This house is really old.
      3. When are you going to start fixing it up?
      4. How do you live with one bathroom?
      5. (My current favorite, courtesy of MIL) I think you should make a home office by cutting up this (already small) bedroom. Yeah, that would help with the resale value.

      My dream is to raze the place and build some tw0-story super-modern house plus guesthouse that would get us into Dwell.

  23. Hubby and I spend a little less than 20% of our pre-tax income on our condo (including property taxes, as well as utilities and cable/internet). We are pretty comfortable with that figure — we love our place, but are still able to save and live quite comfortably.

  24. my husband and i pay exactly 30% of our combined monthly after-tax take home for rent (i’ve never even thought to do the calculation before).
    i’m a big law newbie and we rent in an overly fancy doorman manhattan building with a bunch of amenities we don’t use. but i wouldn’t change anything about it for so many reasons. the husband and i spend a lot of time and home together (when we actually are home) and we’d rather have a nicer kitchen to cook in together and a spacious living room to watch movies in and hang out with our friends and family (and pets). when we decided to “upgrade” apartments weighed the pros and cons and decided we’d rather spend on budget on our home and enjoy it rather than movie tickets and dinners out. plus, i’ve lived in nyc my whole life and a lot of the things to do out i’ve already done twice over (and at least once with the husband in the picture). living in the perfect location means no matter what i will be home within minutes of leaving the office and can savor the little bit of down time i get. all that said, i’m super frugal in nearly every other way – we both always take home cooked lunches to work, never buy lattes on the run (thats what our espresso machine is for), and keep other expenses low so we can afford the apartment and still continue to save.

  25. About 11-12% of our combined income on housing; We bought a fixer-upper way below our means in 2003 due to fear that there would be a housing bubble. I wish we were in a nicer neighborhood, but having the flexibility to make decisions without having to factor in a house that’s underwater is priceless to me in this economy.

  26. While we spend more money than we’d like on rent (18% of my BigLaw paycheck), it seems justified for being (1) in a safe area, (2) near a charming part of town, (3) within walking distance of a metro, and (4) a quiet, spacious apartment. Ultimately, when I leave BigLaw, we’ll relocate to an area where real estate will be much more affordable (and metro access, etc. won’t be a consideration), so I think that we can maintain the same quality of life on a much-reduced salary. But we try to stay thrifty in other aspects of life – which would be expensive regardless of the location – to avoid the golden-handcuffs problem. Here’s hoping that it works!

  27. Just calculated it for the first time, by percent–my mortgage is about 26% of my pretax. But I wanted a townhouse and not a condo (I was sick of upstairs neighbors) so I have a friend who is renting from me–that makes it about 19%, which is only a bit more than I was paying in rent. I’m just glad not to be living in DC anymore, where I could’ve barely afforded a tiny condo in a bad neighborhood…but I’m also jealous of my sister, whose house cost the same as my downpayment! But she has to live in Indiana.

  28. I think a lot of people come out of graduate school and just expect that they’ll have tons of cash to spend with their new jobs. They don’t factor in debt repayment, or how expensive living in a place like NYC can be.

  29. Georgiana Starlington :

    I’m about to make every one of you jealous (yay for small market cities!): I pay 10% of my before tax salary for my apartment. I live less than 10 minutes from work, in an old part of the city that has been significantly rejuvenated and regentrified. My neighborhood is a variety of young professionals, families, and old folks. My apartment is in a 4-unit building that looks like a big house, on a lovely street full of beautiful old homes and giant ancient trees. My building was built in 1940, so all the floors are hardwood, it has 12-foot ceilings, and it has lots of neat features. It’s 2-bedrooms, 1 bath, with a small kitchen (fine because I don’t cook), a utility/mud/laundry room, a study, dining room, huge living room, and my favorite part: a gorgeous balcony with a ceiling fan. All the common spaces flow really well together (you can see straight through from the back door to the front room/balcony), so it’s great for entertaining. The kitchen was recently updated with new appliances and granite countertops and the bathroom was redone with tile floors/walls. Only a few downsides: no dishwasher (I don’t cook), no ice-maker (I just buy bags when I entertain, and use trays otherwise), not enough closet space (is there ever enough closet space?!), and not enough power outlets. But those are minor nitpicks. I don’t feel quite ready to commit to a house (and the yard work, and the extensive maintenance that goes along with an older home in my preferred part of town), and I don’t think our housing market has hit bottom quite yet, so I plan to stay in this nearly-perfect apartment for a few years.

  30. Threadjack, sorry!

    One of my best girlfriends works in DC for the government, and like many, is now staring down the looming and hopefully-won’t-happen government shut down. She used to have a part time “fun” job at a high end food store, but they had to lay her off due to their budget. Without that extra cushion, I’m hoping that she will be ok for the long haul if there IS a shut down.

    Now, I’d like to send her a government shutdown care package of sorts. It’s not a charity thing and it wouldn’t be taken that way, at all– I feel I should mention that to stave off any speculation from commenters. It’s a sort of “let’s make the best of the worst” gift, to take her mind off of it.

    What should I send her?! Obviously this will be going UPS or FedEx to ensure that it gets there….!

    • What a great idea. You could send her items that she probably doesn’t have time for now: a fun book or DVD along with a giftcard to Starbucks or coffee, maybe wine.

      • Darling idea! I like Bonnie’s idea of a “veg-out” gift basket — maybe some home pampering goodies (mask, pedi kit, etc), a new pair of lounge pants or pajamas, a movie/book/ladymags, some popcorn/wine/Starbucks gift card. If your friendship is such that you can laugh at the situation, maybe some Spam/Ramen noodles/other traditional frugalista fare.

    • So sweet. I’m am planning ways to make the most of my own upcoming mandatory unpaid vacation.

    • Gift cards for groceries, metrocards for public transportation, a list of DC free activities (there are tons of them, especially during the summer), a list of cheap eats happy hour specials (again, DC has tons of these) – those would all be great presents for a DC-ite with time off and no paycheck.

      I’m not sure how much you’re looking to spend – you might also offer to fly her out to visit you during her time off, since it sounds like you’re far away.

      • Just a note, most of those fun free activities will be canceled. (cherry blossom parade, all of the museums, etc)

        A gift basket is a really sweet thought. I still have to work, minus the paycheck and am dreading it. What about spa gift certificate? if it were me I would want spa gift certificate, wine, wine, and wine :)

        • How does that work? I thought essential employees would still be paid? My husband is non-essential facing shutdown too.

          • I also work for the Federal government. What I’ve been told — and I suppose I’ll find out if that is true — is that people who are paid out of “no-year” money, as opposed to S&E money, will not be furloughed because those funds are not subject to the budget discussions.

            However, even if we aren’t furloughed, we won’t actully be paid for the work we do until there is a budget. I’ve also heard rumblings that webmail access and VPN access will be turned off. So, limited telecommuting options for those who stay on the job.

          • No essential employees will not be payed. After its over, Congress can decided to retroactively pay us. The webmail access rumblings are for those who will not be working, not for essential employees (as far as I understand it). People can’t check their blackberry if they can’t work

          • I’m a little confused about this too. DH is an “essential” employee, but I’m not sure if he’d be getting his paycheck like normal or if it will be delayed until everything starts back up again (of course, half the time his pay comes days late anyway, for some reason).

          • He won’t get it on time, and there is no guarantee he will get it at all.

    • Suggest that she volunteer during the shutdown! She can find opportunities at http://www.shutdownstartup.org/.

    • Gift certificate to The Container Store! I think this (potential) shutdown will be a great opportunity to clean out the closets.

      And yes, a lot of free activities and places will not be available in DC, but there may be some cheapish things to do in Baltimore. The Walters has an exhibit on reliquaries. Also, Brookside Gardens in Wheaton, MD, is beautiful and I believe it’s free.

  31. soulfusion :

    I believe I am just under 15% and while I have never considered the question from a percentage point of view, that percentage has decreased since I was a new law grad as my salary has increased (and rents took a small dive for a couple of years). As a NYC transplant, I often gasp at the amount of money I spend on rent here. But I think so much of it depends on your individual priorities. For me, I live in a doorman building because of the conveniences: I shop almost exclusively online and have pretty much everything else possible delivered because I both dislike and don’t have time for errands. My building has a full service gym with an annual membership fee significantly lower than any other gym in the city and since it is literally one floor below me, I have absolutely no excuse not to go. My building is also located within walking distance of my office so no monthly transportation costs and next to a park where I can run and feel less frazzled by the city’s energy. I have made huge efforts to make my apartment a home where I can feel comfortable and relaxed and also entertain people and cook comfortably. Since I am not from here I also have an apartment large enough to house friends and family who visit. All of these factors and others influenced my decision to choose my current place and to stay. I fully understand why many NYers choose to pay a lot less but for me convenience and a calming space is extremely important. I also wanted to feel like a real adult – not waiting around for marriage, etc to get a nice place/furniture, etc.

  32. related threadjack: anyone in the new jersey area know of a safe, affordable suburb of newark? i’m working there next fall and was thinking about hoboken but the rents are steep there, not to mention a long commute. thanks in advance!

    • jersey city – the newport area (a short waterfront walk to hoboken). i lived there for a year and thought the neighborhood was charming, all buildings (residential or not) are owned by the same management company so as they have put up newer buildings, they have lowered the prices on older buildings.

      • yeah i was going to look there also! thanks!

      • dancecoley :

        I’ve been living in Newport for the past 5 years, and love it. Great neighborhood, great views of the city, really safe, and really easy to get to both Manhattan and Newark (my fiancee works in Manhattan, and I work just outside of Newark) – it’s great.

    • My sister lived around Bloomfield and Belleville. Those are decent areas. Other than that, I’m not sure about north Jersey. Try Craigslist and roommates.com.

    • northjerz :

      Hi anon! where are you working-close to the train? if so, short hills and springfield are nice options!

      • yeah, my work is fairly close to the train but i still haven’t decided whether i want to commute by car or train…thanks for all the tips, i’m excited to start looking around!

        • Anne Shirley :

          South Orange has some nice spots. I really dislike Bloomfield/Belleville- my friend lives there and spends 45 minutes driving the 4 miles to Newark every day, and it’s hard to get into the city on weekends. Maplewood is also really fun, great downtown. And def don’t write Hoboken off- there are reasonable places, especially as you go north.

  33. Rent is 12.3% of my pre-tax income, and I live 2 blocks from work.

    I’ve been thinking seriously about downsizing to pay even less for a studio, so I can save more $$$/pay off loans faster, but this thread is making me think I should stay in place.

    • Oh and this is in Chicago, in a luxury building with a 24 hr doorman and a pool. My rent includes all utilities except electric. No car or even metro card needed, since I live downtown.

      So glad for this thread! I feel a lot less guilty about paying more than necessary for my space:)

  34. "zen" place :

    Something else to consider is what matters to you. After the long lawfirm hours, all I want to do is relax at home. For me, it is extremely important to have a calm place when I get home. While small apartments can be decorated to feel relaxing, it is much harder to keep them tidy (and thus the soothing effect disappears). I had a small studio for a couple of months while I had just started working, and it added a huge amount of stress to my life.
    So I opted to spend a bit more for bigger place (albeit, in NY that still means you get a not-so-hip neighborhood, no real windows, etc). To me it is a fair trade to spend $x extra a month on rent, because that is money my friends spend on bars and outings and I don’t.

    One note for future associates, unlike Kat’s, my firm does NOT like associates receiving personal mail/packages at work, so having a doorman/super-who-takes-mail has been very important for me. I didn’t have one for a few months and it was hell trying to get to a post office during weekday business hours. Twice they actually returned my packages to the sender becuase I could not take off work to pick them up in the few days they give you. When you work so many hours and have no time to shop in person, this really matters.

    • amen

    • I agree about the zen aspect, something my apartment has been lacking lately. My goal, as soon as I get a free weekend, is to do a major overhaul and send a lot of our stuff to salvation army. When we moved in, the apartment felt empty, and now I feel like I’m being buried in stuff. It’s smallish, so I need to be better about getting rid of things when I bring new stuff in.

    • Interesting :

      This is interesting — I feel a lot more “zen” now that I have downsized to a smaller place. I found our larger 2200 sq ft home way too much work in terms of upkeep/cleaning, and am much happier in a 1000 sq ft place. I find it WAY easier to keep a smaller place cleaner. I could see that it would be hard to tidy up a studio though because there is no where else to put the stuff away.

      • There’s probably a zen balance. It’s easier to keep a 1000 sq. foot home clean than a 2200 sq. foot, but it’s harder to keep my <600 sq. foot apartment tidy than it would be if I had more space.

  35. We pay %15 percent of our salary per month on rent. Two bedroom apartment about 30 min from each of our workplaces, the ‘burbs, Northeast. I get reimbursed for my mileage to/from work, so that’s nice, but the commute is nothing compared to most.

    As we are looking for work (my clerkship ends after August), thinking about moving somewhere more expensive is painful. We could afford it, but we’d rather save for a house.

  36. We pay 25% of our combined gross income for a 1 bedroom apartment in Northern VA. Not bad considering the household income is less than 60k and Fairfax County is so pricey.
    What we love: convenient commutes for both of us, super safe neighborhood (I have no fear running alone at night), dog friendly, and a washer and dryer in apartment.
    What we hate: the appliances are ancient, it takes forever for service calls, the snow removal is non-existent, and the Vocelli’s just closed so there’s no decent pizza.

    And as far as decorating, just open any Ikea catalog and you’ll see my apartment. :)

    • We are doing exactly the same thing. 25% of our combined income for an apartment in Arlington. Everything in our house is from Ikea.

    • Yay Fairfax — I am from there, so I am always nostalgic/interested in moving back to the DC area.

    • L from Oz :

      Oh yes – add me to the Ikea club. My bed is not from there, and one wardrobe – otherwise I can point to each item of furniture and practically name the catalogue page. (But I splurged and had them put it together. Best money I ever spent!)

  37. I pay 26% of my income for my two bedroom apartment. Although I don’t really NEED that much space, it’s nice, and one bedroom places are pretty much unheard of here. It was renovated and redone right down to the drywall right before I moved in, and I’ve thought of moving to a less nice but cheaper place. I think the effort of finding a new place and moving is enough to keep me here for a while, though.

  38. Anon in Evanston :

    We pay about 15% of our take home pay or 10% of our gross pay.

    We rent a large vintage one bedroom apartment within walking distance of public transport. It’s not by any means a luxury building, but i love the feel of these old buildings – hardwood floors, 11 foot ceilings, crown moldings, tons of windows. It has a dishwasher and a large porch/shared yard, with laundry in the basement. Even though it’s a one bedroom, we have a large formal dining room and a sunroom plus an updated kitchen and this is plenty room for us.

    We are both in grad school right now – part time, while working full time – so what I save on rent I pay in tuition in an effort to not take out student loans. I have to admit, while we may be living far beneath our means, I enjoy having all the extra money to both save and spend how we want (travel, nice meals out, clothes, spa time, etc).

    We are looking to buy in the next 2 years and still hope to keep the mortage at about 25% of our take home income because we enjoy the flexibility.

  39. Wow, you all make me feel horrible… when I first started working I was paying exactly 1/3 of my pre-tax paycheck on rent. I lived in a tiny tiny room (just enough room for a twin bed and a desk), shared an old house with 3 other people and had to take a bus to get to the metro, for $725 a month. Granted, it was a pretty nice house- decent kitchen, deck, front porch, tiny yard, but my room was a closet.

    Now, I’m up to 45% of my pre-tax paycheck for a nice, modern apartment I share with one person (1 br + den, I live in the den for $100 a month less).

  40. I just wanted to say that everyday, something completely relevant to my life pops up on this blog! My SO just graduated law school last year, and I graduate a year from now — and we’re just starting to talk about where we will live, etc. once I graduate. After reading about everyone’s experiences, we always have of our own discussion of the topic and now I feel like we will be much more prepared when we have to make these decisions!

    Basically: thank you!

  41. This is such an interesting conversation!

    My current place is less than 10% of the salary I will have when I start articling this year in Calgary, AB. My boyfriend and I live in a small house (circa 1912) in a fun, trendy area of the city that is well connected to the downtown core via public transit and pedestrian foot paths (it will take me approx. 10-15 min to get to my desk from my home in the morning). We have a lot of natural light (as much as you can get all the way up in Canada, I suppose), and our place has a great view of the city skyline. We split the rent equally (which is why my percentage is so low), and we also equally share all of our utilities and other bills (cable, internet). We’re responsible for all of the yard work which is incredibly annoying (shovelling copious amounts of snow, mowing the lawn with the landlord’s antiquated manual motor), but we have two parking stalls, dishwasher, washer and dryer included in our rent and it is nice to have some outdoor space (I think we got such a good deal because our landlord overreacted to how badly the housing situation was and consequently set a ridiculously low rent).

    Our landlord approached us re: buying the house a few months ago, but we declined because we just aren’t in a financial position yet to even qualify for a mortgage (because I won’t start my article until June and my BF still has one more year of law school to go). When we eventually buy property I think it will likely be in a similarly appointed area in a house, as my BF is convinced that it is better to own “land” than to own a condo.

  42. desperate in DC :

    Thank goodness people started piping up about living in DC on a public interest/government salary! I’m in that situation and looking at all the numbers of all the BigLaw folks in NYC makes me panic (though obviously I know the low percentage is >= a much higher $ amount than it would for me given my salary). I’d be super glad to hear from more public interest/govt folks, especially in the DC areas…I’m starting to wonder if I have to live with 7 people; and/or hundreds of roaches; and/or a multi-hour commute in order just to keep it below the % guidelines or if us public interest/govt folks in pricey cities really just have to turn kind of a blind eye to those guidelines??

    • I live near Dupont Circle for 24% of my gross/38% of my take-home (post-tax, 401k, Metro, etc) and I work for a nonprofit making less than 70K. No roommates and a walking commute; only the very occasional roach. Most of my coworkers live in the District, even ones with families (you can get a 2 bedroom in Brookland or Glover Park for $1500 or so) although they tend to move to the suburbs if the kids are old enough to go to school. So don’t worry, you can do it.

    • gov't worker elsewhere :

      I think I spend 38% of my take home pay on rent. I live in the state capital and most of the non-student apartment complexes here seem to set their rent based on what they assume the average state worker can pay and still meet the minimum income restrictions (33% of gross). I know in my neighborhood the apartments are in reach for most state workers but it’s impossible for all but the highest paid to be able to buy a home here. This area is not objectively expensive, but it is pricey once you realize what the average person is paid compared to how much everything costs.

    • My comment above is on government salary in DC. As in, first house I was living in (Glover Park, actually) I was making less than $30k. Second place, bumped up to $33.

    • When I was in DC working for the government (it was a political, not law or agency job), my rent was about 21% of my gross salary, and I was living in Arlington and had to take a bus to the metro, so it would have been a lot higher had I actually lived in DC or within walking distance of a metro stop. But I also had metro benefits, so I wasn’t paying to commute to/from work, and some student loan repayment assistance–if you’re working for the government, definitely ask about transit benefits/loan repayment assistance to see if it’s offered.

    • Look in a neighborhood like Glover Park (near Georgetown) and get a roommate! You can get a nice place for about $1400 – 1500 total, and then you could split the cost with a roomie. It’s a safe neighborhood with good bus transportation, and lots of shops (including a Whole Foods and a Safeway). In DC, I started on very low salary out of law school in ’05 and I paid about $700 a month with a roomie for at least 3 yrs. Now I have a new job, make more money and can afford to live by myself. (The best way to look for a place in GP is to go the neighborhood and walk around, most of the apartments are 4-unit buildings with independent owners.)

      I think it’s a huge sacrifice to move far away when you are living on a small salary, because you can save so much by living in the city because it gives you access to so much more at minimal cost and frees you of the need to have a car. (If you feel like you do need a car, then get a Zipcar membership, there are spots all over the city.)

      • (The best way to look for a place in GP is to go the neighborhood and walk around, most of the apartments are 4-unit buildings with independent owners.)

        Walk around and look for signs in the front of the buildings is what I meant to say…

  43. Two words- leaving New York. We got a beautiful amazing place in Seattle for what we sold our tiny shoebox for in New York. Paying still more than seems reasonable, but it’s less than 15% pre-tax income each. And I love, love finally coming home to a place I enjoy, after spending years 18-33 in studios and dumps. It’s worth it even though I cringe at the bills a bit. I am making much more than used to so it’s doable. And maxing out savings plans, paying down debts, and enjoying life. Leaving a more pricey city for a less pricey but still expensive city made a huge difference. Also my new city has no income tax, so got a 18% ‘raise’ by leaving in take home pay.

    Of course where you are within a city matters a lot. We’ve always chosen neighborhood over space, but I respect others’ decisions.

    Totally random, but gripe on Seattle… generally I love and adore it and have made it home probably for good. But the slow, ridiculous drivers… they go under the speed limit in the left lane, won’t move, don’t follow traffic patterns, let others in stopping in the middle of the road which is unsafe.. they drive me nuts. Driving is the only thing I prefer NYC to here on (well not driving although I don’t miss the subway exactly). Sorry for rant, was a long ride home today! They could fix their budget problems here just by enforcing traffic rules on the turtles:)

    • Hah! I moved from DC to Seattle, and told my NY-native best friend that she is not allowed to drive here, because the drivers will make her crazy. I kind of love it though–people let you merge!

  44. PittsburghAnon :

    4.8% in Pittsburgh in a very nice, small 1 bedroom with a killer view.

    • MissJackson :

      I’m in Pittsburgh, too, and you’ve officially made me feel un-frugal :-)

      • PittsburghAnon :

        I live in a relatively obscure, but nice neighborhood, and make pretty good money for this area. :)

  45. I pay $440, or 15% of my take-home pay, to rent my perfectly decent, 600 sq ft one-bedroom apartment. My neighbors complain about how much housing costs around here, but I remember what I used to pay to live (with roommates) in NYC and laugh all the way to the bank.

    I sometimes get jealous of friends with more space or amenities, but at the end of the day, I’m not interested in giving up any of the other things I spend my money on– including paying down student loans, saving for retirement and a rainy day, and giving to charity. I like the way I spend my money. I just have to remind myself that *wanting* more money is not the same as having it. :-)

  46. I bought my first apartment. My father financed it and I pay him back 28% of my before tax income (used to be 32% before my pay increase).
    This is high, but I am thinking of it as buying my own peace of mind since I know that there is no risk some bank will take my apartment from me if I cannot pay.

  47. MissJackson :

    Oh, this conversation makes me so grateful that I’m perfectly happy living in a non-major market. I own a lovely old victorian in the “best” (read: most expensive) city neighborhood… and I pay 13% of my pre-tax BigLaw income. My husband does contract work, so when he’s working, it’s way, way, way less than that (like 8%). And honestly, I feel like we splurged on housing big-time (our house is small, but we definitely went for location, location, location).

    Before anyone gets too jealous, I’ll mention that we had $300k in student loan debt when we graduated from law school (which is about 50% higher than what we owe on our mortgage), so it’s not like I’m rolling around in my money pit or anything.

  48. that is true and the silver lining:) i always go first at stop signs (because they NEVER go but then look all mad when you do) and I never wait in cues to get off the highway, just cruise up to the end and they waive me in! It is funny in that regard.

  49. 16% if I just count my income and 11% if I include my husband’s.

  50. Lex Caritas :

    London property prices>>>>>>>youch, is all i can say.

  51. This is truly difficult and tricky subject (which i sure has been discussed time and time again). Spending more on rent suggests you could live in either a better area or have more space. However if you went from the cheaper option, are you the type of person that saves? Or prefers the additional spend on clothes or going out. I am now 35 and lucky to own my own house (have done for the last 7 years). I would suggest saving as much as you can so you can invest in your own property (this is from a UK perspective). Rent is dead money!

  52. I am loving this post. I absolutely agree with you: just because it’s advised that you stay below 30% of your income doesn’t mean you have to bump up against it. My rent is 10-15% of my income, and it makes sense because of a key point you made: I am very rarely there.

  53. new to nyc on biglaw salary :

    thanks to everyone for posting. I am about to sign a lease tmr and just wanted to check that I’m not spending too much on the apt; and that I am not going over a manageable budget. I lived in NYC on $1800 (after taxes)/a month, so I know I can do it on much more, but I wanted to check all the same and it’s reassuring to read the posts.