Paying rent in New York City is no joke. Right now, the city boasts the most expensive rent prices in the country. The average price for a studio apartment goes for a whopping $3,540. Adding an extra room to your apartment nearly doubles rent to an average $4,233.
With housing costs like these, balancing the budget can be tricky. You might be so focused on paying rent that you don’t always get around to saving money.
In the average month, you may not miss those savings, but your lackluster emergency fund can cause problems the next time you face an unexpected expense.
What Can You Do Without Savings?
Let’s say that unexpected expense arrives sooner than later. If you need to handle an unexpected vet bill, medical expense, or car repair, you have options — even if you don’t have a fat savings account.
Most people without enough savings turn to credit for help in emergencies. If you have room on your credit cards, you can put an unexpected trip to the vet on this account. You can pay off your vet bill over time, provided you always cover at least the minimum payment.
Some people don’t have enough room on their credit cards to handle their unexpected expense. Luckily, you can take out an installment loan or line of credit in their place.
Whether you swipe plastic or apply for an installment loan online, check out these 13 tips for responsible borrowing before you use it. This guide gives you a quick rundown on how to choose the right loan for your needs.
How Can You Prepare for the Unexpected?
Assuming you don’t have an emergency on deck, let’s focus on what you can do to prepare your finances for that eventuality. Because an emergency expense will happen — maybe not now, but some day soon.
1. Track and Trim Your Spending
First off, you will want to confirm that rent is the reason why you aren’t saving — not anything else. Go through your financial statements to monitor your past expenses, organizing expenses into categories like housing, groceries, bills, and more. Check out this guide for more ideas on popular budgeting categories and their suggested limits.
If this exercise reveals you spend a lot of money on variable, non-essential expenses, it’s time to tighten your budget. Reducing what you spend on entertainment, clothing, eating out, and your commute will free up savings.
2. Cut Your Housing Costs
So, you track your spending and realize that you don’t waste a lot of your money on non-essentials. What now? You have to think about what you can do to spend less on housing. Here are some tips to help you get started:
- Try downsizing to a smaller apartment.
- Let go of some of your must-have amenities, like on-site laundry, fitness center, or 24/7 security.
- Move to a more affordable neighborhood.
- Move in with roommates to share the cost of rent.
- Talk with your landlord. If you rent from a mom-and-pop landlord, they might lower your rent if you’re willing to act as their handyperson.
- Join the many people who leave New York City for cheaper cities.
Balancing a budget is hard when the rent is so high. Try on these tips for size to see if they can help you build savings while paying rent.