A few weeks ago, I met up with one of my favorite personal finance bloggers, Shannon from Financially Blonde. I consider Shannon a mentor and have often gone to her for career advice. To my delight, she provides plenty of non-career related tips like the importance of creating a lasting friendship with a bartender.
Shannon and I were catching up about my new job when I disclosed my salary.
“How can you live on that?” she burst out. “I have clients who struggle to pay their bills on that salary.” To which I laughed.
Before I continue, let me rewind.
Shannon and I come from very different career backgrounds. She’s been in the finance world her whole career and experienced the monetary luxuries associated with being successful in the banking industry. I, on the other hand, started out my career in entertainment – often making less than $1,000 a month before my second and third jobs. Then I moved into public relations, which at the time felt like a huge spike in my income but on the scale of NYC living provide a paltry sum.
For the first time, I’ll disclose some numbers.
- New York City Year 1: I made less than $20,000 (I survived on Starbucks leftovers and rice)
- New York City Year 2: I earned $37,500 in pretax income from my old job + about $3k for side hustles
- New York City Now: Enough of a hike that it made me feel a little lifestyle inflation
So, when Shannon about choked on her oyster after I disclosed my current salary, I had to chuckle.
I can survive living in an expensive city with a salary south of six figures because I don’t have debt. Rent alone costs me $12,000 a year, which used to account for just shy of 50% of my post-tax salary. But oddly enough, I’ve rarely felt financially vulnerable. I usually feel I have enough disposable income to do the activities I want (travel) and still sock away a significant amount into my savings account.
Until Shannon’s reaction, I’d never really given much thought to how I managed to survive and save money in an expensive city with a small salary. I simply did.
The next day, I got my answer.
I was driving along I-80 in my rental car (obviously I don’t have a car in New York) experiencing an odd sensation that could only be described as part paralysis from fear that I’d die in a fiery crash after going a year without driving and part getting lulled to sleep by motion of the car.
In an effort to both stay awake and distract myself from visions of getting t-boned by a semi, I turned to my trusty Planet Money podcasts.
The episode (entitled Can An Economy Be Too Good?) discussed economic issues in the European Union with an interesting emphasis: Germany’s success is causing a problem for everyone else.
The reporters to drew an amusing correlation between the EU and St. Elmo’s Fire to illustrate how Germany has it together and therefore “secretly screwing the rest of them.”
In simplest terms: Germany has a trade surplus or an imbalance (lots of exports going out, plenty of money coming in and not much money being spent on goods from other countries in the EU). According to an NPR analyst, no country in history has ever been so successful and so frugal.
He goes on to say, “If every consumer everywhere behaved like the German consumer, then the world would be in an almost permanent recession.”
A winemaker from Italy remarked how Germans have an attitude that you’re cool if you buy something at a reasonable price rather than spending a lot of money. He recalled his childhood friends, who were German, saying Saturday morning was “a day to fix the toys rather than buying new toys.”
An economics editor from a German newspaper seems to confirm this stereotype by summing up the country’s mentality based on a famous ad for an electric appliance. His translation of the ad’s slogan: “a thrifty person is smart, clever and cool.”
Then it hit me. This is how I behave. I’m just in a country where being thrifty isn’t considered smart, clever or cool.
I’m a hoarder of cash (possibly to a fault). I rarely go shopping. I prefer to make my own meals instead of eating out. I still refuse to furnish my apartment outside of the bare essentials (I figure I’ll be moving eventually…) and the only thing I gleefully fork over money for is travel.
My default thrifty habits are the sole reason I’ve financially survived living in New York City. Well, the lack of debt has helped a lot too. Maybe it’s time I go someplace where my mentality is the norm.
Perhaps I should just move to Germany?
(Then I’d have more legitimate reason to root for them in the World Cup)
Gif taken from GIPHY