This weekend only, get a Marketplace zip–up hoodie when you donate $8/month. Don’t wait — this offer ends at midnight Sunday!
Tess Vigeland: Earlier we visited Beverly Hills — probably the most cliched epicenter of wealth in this country.
But in fact New York City is the most expensive place to live, according to Forbes and several other surveys. Average monthly rent is $2,800. Median income, however, is just $63,000.
So when you ask people whether $250,000 makes you rich, they’ll often say — Well, not in…
Jay-Z’s “Empire State of Mind”: New York…
So we asked Sally Herships to find out how the Big Apple manages to take such a big bite out of those $250,000.
Sally Herships: Truth is, New York’s so expensive. People like me — who make less than $250,000 a year — basically live in places like Brooklyn. So I tracked down another native New Yorker, one who makes a lot more money than me.
Samantha Chapnick lives near Columbus Circle. It’s a really nice neighborhood across the street from Central Park. Chapnick is a business consultant. She’s in early 40s. Her husband is older and he’s retired. But Chapnick still works and she earns about $250,000 a year — so much money! She must have an enormous, luxurious apartment. She told me she works from home.
Herships: Describe your apartment for us.
Samantha Chapnick: Small, small, small. My 6’4″ husband, myself and my almost 9-year-old daughter live in what I think is about 550 sq. ft.
There’s the kitchen…
Herships: Do you have a microwave?
Chapnick: It’s in the hall closet.
Then there’s the bedroom. It’s a nice size for one bed, but there are two.
Chapnick: Sometimes I feel like we should put beads up and act like we’re in the ’60s.
The whole family shares the bedroom — mom, dad and their 8-year-old daughter. But, it’s not as crazy as it sounds. They’re paying less than $1,000 a month. Their apartment is rent-stabilized. That means the rent can only go up a certain percentage each year.
My fiance and I are planning to keep our roommate, after our wedding, for the same reason. When you have a deal like this in New York — you hold on to it. Chapnick says she sees it as an investment for her daughter.
Chapnick: How many people wouldn’t wish that their parents saved for them a one-bedroom, near Columbus Circle, overlooking the river for what will maybe be $1,200 or $1,300 for her?
Chapnick hopes a reasonably priced place to live will free up her daughter’s financial future. So if the family’s money isn’t going on pricey New York City rents, where is it going?
Chapnick: Well, first we have private school. Which after you get done with the auction and everything like that is going to be a good $40,000 to $45,000.
Of course, they chose to send their daughter to private school, but is it really necessary? Chapnick says the last public school they looked at was too overcrowded — one teacher for almost 30 kids. And she says her friends who send their kids to public school end up donating thousands of dollars anyway. And of course you can’t forget high city taxes.
Chapnick: And then you have your dental expenses for three different people. So that roughly is $15,000 to $20,000, $25,000 maybe.
Yeah, you heard that right. Remember, Chapnick’s a freelancer. She has medical insurance, but skipped dental. This year she needs crowns, root canals and implants. Of course, there’s always something.
Chapnick: Then you’re left with let’s say $20,000 for food, for clothing.
And for expenses like transportation. The family doesn’t have a car. They have monthly subway passes and bikes squeezed into a corner of the living room.
Herships: It’s amazing because $250,000 sounds like so much money.
Chapnick: So it’s not really as much as it sounds like. I don’t want to do a sob story because if you live somewhere else, you have no right to complain.
But her family doesn’t want to leave Manhattan.
Chapnick: My husband and I have certainly said to ourselves, listen, we’re going to scrimp, we’re gonna save. But at the end of the year you look at it and you think — maybe the biggest ticket item we ever buy is maybe an Apple laptop computer at $2,000. It’s not like our big ticket item is like a new Lexus or a BMW. It’s not a $10,000 vacation.
But even so…
Chapnick: I think we’re fortunate. Not as fortunate as I’d like to be, but definitely more fortunate than most.
In New York, I’m Sally Herships for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.