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Connecting on LinkedIn is really worth the effort. Over the weekend we entertained a married couple of accounting professors at our home in Bucks County. We initially met as LinkedIn connections. Messaging became lunch. Lunch became lunch and dinner with spouses. Dinner became weekend visits as a friendship developed. Over breakfast we talked about a question puzzling many people. How can young people today afford to live in New York City?
The accounting professor couple is uniquely placed to help answer this question because they have students at both the undergrad and graduate school levels. The husband acknowledged the problem by using the following example: “Even if you graduate from college with an ideal job paying $`150,000 a year, payroll taxes in New York (lets add in 401(k) contributions, Social Security, health insurance and other deductions) means you might see 50% in after tax dollars every month. Rent might be $3,000 to $4,000 a month. Even if life in NYC means a car is unnecessary, it is still expensive. (Student loans are not even a factor in this conversation.)
He also brought up another point: The TV show Sex and the City was very popular during its run from 1998 to 2004. During this period, NY newspapers commented the lifestyle the characters lived, based on their jobs and salaries, would not make ends meet in real life.1 By one estimate,the lead character would have run up a million dollars in debt to live her lifestyle during the total run of the TV show. The image shown on TV did not match up to reality.
If you visit a bar in midtown Manhattan on a Friday night, seeing wine at $16 a glass is not unusual. How can people in their 20’s and 30’s afford to live in NYC, especially Manhattan?
1. Holding multiple jobs. Having flexible hours or only getting part time work means they have the option of holding down more than one job. My favorite example comes from our years living in San Francisco. My dentist was also a full time fire fighter! He worked for the fire department on shifts requiring staying and eating meals in the firehouse. His days off were known in advance, allowing him to run his dental practice simultaneously.
2. The practical solution. They are not drinking in those bars. They are finding places with happy hour pricing or meeting friends in other parts of the city where food and drink are cheaper.
3. Sharing. They are not renting and occupying an apartment solo. They are sharing with at least one other person and splitting the rent. This at least reduces their largest living expense.
4. They understand before tax and after tax dollars. Some employers offer interesting perks. This might include a subsidized cafeteria. It might also include the ability to pay for a subway transit card using before tax dollars because it would be a work-related expense.
5. Living on credit cards. The problem with easy credit is some people consider it like savings (that don’t exist) or an extension of their salary. Credit is often easy to get. The average American has 3.9 credit cards.2 Millennials average about $4,300 in credit card debt while Gen Z is $1,963.3 This is a problem because interest rates are high.
Buy now, pay later short term borrowing. Klarna is a Swedish fintech firm making small, short term loans.4 They have 100 million customers. About a quarter are using their short term debt to buy groceries vs. 14% last year. However, yrar over year credit losses are up 17%. People seeking other forms of credit are having difficulty making ends meet.
6. The bank of mom and dad. CNBC reports 50% of parents are still providing financial support to their children aged 18+.5 Put another way, their grown children may still be receiving an allowance, even though they are gainfully employed.
7. They moved back home. You might have seen the Elsbeth when someone mentioned when Manhattan got too expensive, many young people moved to Brooklyn. Elsbeth asked “What did they do when Brooklyn got too expensive?” The answer was they moved back home to their parents. CNBC reports about a third of adults ages 18-34 live with their parents. (5).
When looking at the question how 20 somethings can afford the New York lifestyle, the answer is often they can’t and need to seek additional funds elsewhere. This might be holding multiple jobs, running up debt or asking their parents for financial support.
Related: The Case for Clients to Carry Cash
1. https://english.elpais.com/culture/2022-02-22/5000-a-month-for-a-column-could-carrie-afford-her-life-of-luxury-in-sex-and-the-city.html
2. https://use.expensify.com/blog/credit-card-statistics
3. https://www.cnbc.com/select/average-credit-card-debt-by-age/
4. https://www.morningbrew.com/stories/2025/05/21/klarna-users-are-buying-now-but-not-paying-later?utm_source=substack&utm_medium=email
5. https://www.cnbc.com/2025/03/25/half-of-parents-financially-support-adult-children-report-finds.html