New York Is Pricy. Take These 10 Steps to Get Your Money Under Control

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So you live in New York — the Empire State — the best and most important state of all, right? You and 20 million other New Yorkers.

Not exactly the cheapest place to live, is it? New York always gets ranked as one of the most expensive states in the U.S.

“Even a basic lifestyle can cost a king's ransom in the Empire State,” CNBC says.

You’re probably getting squeezed by high housing costs, so your finances could use some serious TLC.

But the problem seems overwhelming. Which goal to attack first? You need a budget, a savings plan, a debt-repayment strategy, a better credit score, a plan for retirement and… oh God, it’s too much.

To tackle big goals, you have to start small. Here are some simple steps you can take today to get your finances under control:

1. Pay Less for Homeowners or Renters Insurance

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Housing in New York state is so expensive! And if you have homeowners or renters insurance, you might be paying too much for it. Try shopping around.

If you’ve never looked into it, start by getting a free quote. Here are some places to start:

Lemonade: Renters insurance starts at $5 a month and homeowners insurance starts at $25 a month.

Beyond affordable rates, Lemonade adds a layer of transparency you don’t often see in the insurance world. Instead of profiting extra when it doesn’t have to pay out claims, the company keeps a set 20% of your premium for itself, and 80% goes into a pool for paying claims. Money left over after paying claims each year goes to a cause of your choice.

Young AlfredBilled as “your new, hip family butler,” Young Alfred is actually an online insurance agency that does your comparison shopping for you.

Based on your profile, it suggests ways you should consider modifying your insurance coverage. Based on your needs, it recommends three insurance policies that’ll give you the most bang for your buck. It shows you a side-by-side comparison of the three policies’ prices and coverage in an easy-to-understand format.

2. Stop Paying Too Much for Car Insurance

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With all those trains, buses and subways, New York has way more mass transit than most states. But for most of us, there’s still no getting around the need for car insurance.

One way you could save money is by shopping around and comparing rates at least once a year. Less than 50% of us do that, according to this survey from The Zebra, though 81% of us report wanting lower rates.

So, just like you compare the prices of flights, shoes and laptops before purchasing, why not compare car insurance?

The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 204 providers in less than 60 seconds.

Here’s how it works:

1. Head over to The Zebra’s search platform. Enter your car’s year, make and model, and your zip code. Continue on to answer questions about your driving habits, your car and your life.

On the right sidebar, you’ll watch rates increase or decrease based on your answers. For example, if you’ve gotten into an accident — that was your fault — in the past three years, your rates will kick up. It’s interesting to see what effect your answers might have.

2. After about two minutes of questions, it’s time to compare. The Zebra gives you an “Insurability Score,” which is similar to your credit score except it’s for car insurance, and it  teaches you how to get better rates. The site also gives you different options for coverage.

When you’re ready to consider your options and select a quote, you can also receive a phone call from The Zebra for additional support.

A nice representative (a real, live human) on the line asks if you want to speak with a specialist. If you’re truly interested in car insurance and want to ask all the questions, this could be the perfect time.

Otherwise, just keep shoppin’ around and weighing options through The Zebra.

3. Open a Separate Bank Account

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Life is complicated. Life in New York is especially complicated. Operating everything out of one checking account can make your finances muddy and contribute undue stress to your money management.

To simplify, open a second account for a dedicated purpose.

Chime is an online-only bank account that offers some unique features other banks haven’t caught on to yet.

Consider:

  • Chime doesn’t charge overdraft fees, monthly maintenance fees, foreign transaction fees or minimum balance fees.
  • Chime customers have access to thousands of fee-free MoneyPass ATMs around the country.
  • When you set your payroll up for direct deposit to your Chime spending account, your paycheck will post two days before payday, giving you more time to plan, save and pay the bills.
  • You can open an easy-to-access, connected savings account. It allows you to automate your savings with features like the round-up tool, which will round up your transactions to the nearest dollar and dump the change into savings.
  • Its mobile app boasts more than 2,000 five-star reviews, making managing money super accessible via iPhone or Android.
  • It has a “Pay Friends” feature, so you don’t have to mess with cash, math or other apps to split the bill.

Plus, it takes about five minutes to sign up. The bank verifies your personal information, takes note that you’re at least 18 or older, then you’re good to go. No opening deposit required.

Note that the biggest complaint is a lack of mobile check deposit, but Chime assures its customers the feature is coming soon.

For an account that’ll help you strike up savings — and that’ll pay you two days early — check out Chime.

4. Have a Long Island Iced Tea and Look at Your Credit Score

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We know. None of us want to do this (except maybe the drinking part).

But did you know 20% of Americans have an error on their credit reports that is likely bringing down their scores?

A good credit score is crucial if you’re buying a pricey house or condo. You also have to authorize a credit check whenever you want to move into a new apartment, rent a car with your debit card or buy a new phone.

So pour yourself a glass of wine — or a Long Island Iced Tea — and check your credit score for no cost on a free site like Credit Sesame. This way you can find out if you have any negative marks on it before you’re trying to make a major life move.

5. Start Investing Without Thinking About It

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With the New York Stock Exchange based in your state, it only makes sense for you to invest.

If you want an absurdly simple way to save and invest your money, try Acorns. You’ll be amazed by how much money you can set aside without even thinking about it.

Acorns is a smartphone app that connects to your bank account, credit and debit cards to save your digital change. It automatically rounds up purchases with your connected accounts and invests the difference in your Acorns account.

This Penny Hoarder saved $116 — about $35 a month — by connecting one debit card to the app and forgetting about it.

At that rate, you’d put away $420 a year. And if you use your credit cards more frequently, your round-ups could amount to much more.

Plus, you’ll snag a $5 bonus when you make your first investment.

6. Start a Passive Income Stream

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You can never have enough money. We’re at no loss for smart ways to earn extra money without doing extra work, but here are some you can actually start right now.

Sign up for the websites below on your smartphone, and start earning extra money every month — up to $600 per year!

  • InboxDollars offers several short, daily surveys you can take. If you take all of them each day, you could earn an extra $730 a year — not too bad.
  • Paribus is a tool that gets you money back for your online purchases. It's free to sign up, and once you do, it will scan your email archives for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund anytime there’s a price drop.
  • Drop wants to… drop some cash in your wallet. Link your credit and debit cards, and you’ll earn points whenever you make a qualifying purchase. This can happen when you’re grocery shopping, hailing an Uber or even ordering a pizza. The points will add up, and you can exchange them for gift cards to popular retailers like Amazon and Starbucks.

7. Take Steps to Consolidate Your Debt

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A lot of us are being crushed by credit card interest rates north of 20%. If you’re in that boat, consolidation and refinancing might be worth a look.

It could substantially lower payments you’re already making on your debt and help you save more money each month.

A good resource is online lending platform Upstart, which can help you find a loan without relying on only your credit score.

Unlike traditional underwriting models that use only the common FICO scoring model, Upstart’s technology looks at factors like your education and employment history to determine your creditworthiness.

It can help you borrow up to $50,000, potentially with better terms (e.g. lower interest or lower monthly payments) than traditional lenders. If managing many different bills and credit lines is a hassle, you can also use an Upstart loan to streamline all of your loans into one.

8. Make Your 401(k) Blossom

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As a New Yorker, you’re definitely going to want to retire in Florida someday. (Maybe we’re biased…)

But saving for retirement is a daunting chore — perhaps the most daunting in the world of personal finance. If you’ve ever typed your information into one of those retirement calculators, you’ve probably thrown your laptop across the room and declared, “I give up.”

But a 401(k) will help you out, and if you already have one open, you’re on the right track.

Now you just need to make sure it’s working hard for you. That’s where Blooom will help you out. This company is an SEC-registered investment-advisory firm that optimizes and monitors your 401(k).

Enter your information into its system: your name, age and when you hope to retire. Connect your 401(k) account securely, then boom. (Or Blooom?)

Within a few minutes, you’ll receive a free 401(k) “health report,” which tells you what’s going well and what needs some improvement. Are you paying too many fees? Is your mix of stocks and bonds not properly allocated for your age?

If you want Blooom to take over, you can opt in for a $10-per-month service. Within a few hours, it will reconfigure your 401(k) without you doing a thing. And, better yet, it keeps an eye on it from then on.

9. Take a Deep Look at What You’re Spending

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Every dollar counts. An integral part to managing your money is budgeting. Ew, gross. We know. But it’s important to take a good look at what you’re spending and understand where you can cut back.

An easy way to automate this process is to use Trim, a little bot that’ll keep track of all your transactions.

Connect your checking account, credit card and savings account for a big-picture look at your spending habits. Then, take a closer look by checking out each of your transactions. Now, set alerts to let you know when bills are due, when you’ve hit a spending cap or when you’ve (hopefully not) overdrafted.

Trim has a lot of other features, too, including a service that helps you negotiate your bills down. Best part? It’s free to sign up.

10. Optimize Your Credit Card Rewards

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So you want a credit card, but there are too many to choose from. What to do?

Should you leaf through your junk mail and just accept one of those credit card offers that show up in your mailbox? That would be quick and easy, right?

No, no, a thousand times no! Don’t do that. That’s a good way to end up unhappily shackled to a credit card that’s all wrong for you.

At least one in five cardholders are carrying around a credit card whose fees and rewards don’t match their actual spending habits, according to a 2016 study from J.D. Power.

To get some professional help making your choice, check out Even Financial. It offers an online marketplace to find the right card for you, based on your situation and needs.

Don't miss out on possibly hundreds of dollars a year in rewards.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He loves New York.

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