How I Saved $100K To Buy An Apartment

This story was first published on June 29, 2014.
It’s a hot summer afternoon in July 2009. I’m standing in an empty apartment holding a can of Pabst Blue Ribbon. My fiancé (now husband), Ken, stands with me as we survey our new home. Earlier in the day, we were sitting in a dingy law office, signing a towering stack of legal documents, before handing over a very, very big check. I felt a little dizzy when the lawyer gave us the keys. It was official: We were the proud owners of a 700-square-foot, one-bedroom apartment in Park Slope, Brooklyn. How the hell did we get here?
Well, PBR had something to do with it. And, peanut butter sandwiches.
Roots Down
Ken and I aren’t millionaires. We’re not Wall Street bankers or trust-fund babies. We didn’t win the lottery, and we're far from financial geniuses. We’re savers. Frugal may be one of the least sexy words in the English language, but there are some benefits of being penny pinchers (another ugly phrase). Because of our careful spending, Ken and I were able to save close to $100,000 in six years. It was enough to snag a piece of the American dream — in New York City, no less. And, trust me when I say that dream does not come cheap in the big city.
New York isn’t exactly known for embracing its middle class. According to Zillow, the median home value is $513,500, while recent census data revealed the average yearly income in Brooklyn is $45,850. Beyond an outrageous real-estate market, there’s the high cost of living: food, entertainment, clothing, and general “keeping up with the Joneses.” This is not a town for savers.
Compound the expenses of living in New York with the fact that Ken and I work in creative fields — industries not known for paying six-figure salaries — and saving money gets even tougher. When we bought our apartment, I was an associate editor at a book packager. Ken worked for an educational publisher and spent much of his down time growing his freelance writing career. While we made decent salaries, we weren’t exactly rolling in it. After rent, groceries, and bills, there wasn’t a ton left over. We managed to save by cutting corners: We don’t have cable or gym memberships; we rarely eat out; and we really think about every single purchase we make. Sure, there were times we ended up missing out on some things I kind of regret. (Should we have ponied up for tickets to see Rufus Wainwright at Carnegie Hall? Probably.) But, in the end, we’re homeowners. And, it was worth every sacrifice.
As a couple who is incredibly careful with our money, buying an apartment made a lot of fiscal sense. Instead of wasting $1,600-plus a month on a rental, we’re building equity. While I’m not 100% sure what that even means, I hope that when we sell our apartment we will make a small profit that can be applied toward the next place.
This was more than just a financial decision for us, though. Owning our apartment is a commitment — to our relationship, to this city, to building our future here. For many, New York is a temporary place. Lots of people come here in their 20s and enjoy the city life for a few years before moving away to buy homes and start families someplace more affordable. I have zero desire to have a giant backyard (um, it’s called Prospect Park) or a humongous house (what do you do with all that space?). When we made the decision to buy, we made a decision to stay in NYC for at least five years, and we hoped it would be for even longer.
Peanut Butter, Anyone?
Ken and I didn’t sit down at 22, when we started dating, and decide to work toward saving $100,000 to one day buy an apartment. We were like most twentysomethings post-grad. Ken had student loans. We had a hard time finding jobs. When we did, we didn’t make a lot of money. Even in those salad days, though, we were pretty thrifty, saving what we could, when we could, never carrying credit-card debt. We wanted to have some extra funds should we ever lose our jobs. After all, we work in media. We know plenty of people who have been laid off — both of us included.
Ken is definitely more frugal than I am. The man will go out of his way to avoid a service charge, bridge toll, or full-priced beer. He eats a peanut butter sandwich every single day for lunch, skipping the jelly because that’s an “unnecessary expense.” But, his dedication to this simple meal has saved us thousands over the years. Takeout lunch in Manhattan easily costs $10 — $15 if you’re ordering from Seamless and adding a tip. Click “Place Order” five days a week, 50 weeks a year, and you’re spending $3,750 annually for limp salad and bland sushi.
I’m not so strict with my spending. I have a weakness for expensive cheeses. I bring my lunch to work a lot, but I usually indulge once a week and go out for lunch. I’m guilty of spending $7 for a half-pound of Brussels sprouts at the farmer’s market. And, every once in a while, I will take a coffee break with a friend and have a $4 latte.
Despite our different saving styles, at the end of the day, we’re pretty much on the same page. And, I like to think over the course of our relationship we’ve balanced each other out some. I’ve come around to many generic brands (aren’t Target dryer sheets pretty much the same as Downey — except for the $3 price difference?). I’ve gotten Ken to agree that Hellman’s is the only brand of mayo worth buying.
That’s not to say that being frugal isn’t hard — and sometimes annoying and exhausting. Ken and I rarely take cabs, which, for the most part, is fine. This is NYC — the subway system is amazing and runs (most of the time) 24/7. But, when we first moved in together, we were living at the top of Manhattan in Washington Heights, while all of our friends were in Brooklyn, easily a 90-minute subway ride on a good day. Trekking home after a night out meant waiting forever for the R, changing for the express at Atlantic, changing again at either 42nd Street (the longest walk ever) or at 145th (a little bit sketchier), and then dozing off and on as the A went local from 42nd to West 181st (that’s 16 stops). It was unusual for it to take less than two hours. Once, I think it took three. All of this to save the $67 it cost to grab a cab. Sometimes, I’m not sure it was worth it. But, we did it anyway.
Okay, I realize that it still sounds nuts that we were able to save all this money in a relatively manageable amount of time, but there are a million little ways your spending can add up. Ken makes us coffee every morning (from a $3 can of Bustelo), and since we always eat breakfast at home (generic Raisin Bran for him), neither of us buys it on the way to work (easily $5 to $10 per day right there). If we want to go out for a drink with friends, we choose the $3 draft over the $14 cocktail (a whopping $11 savings). We never eat out. Okay, not never, but usually just on special occasions. We cook dinner at home nearly seven days a week. And, you can forget about brunch.
I read somewhere (New York mag? The New York Times?) that the publication’s definition of a “cheap eat” was dinner for two for $50, not including alcohol. I’m sorry, but that’s expensive. And, let’s be realistic: Everyone wants wine. Say that brings the bill to $75 (and that’s a cheap bottle you’ve ordered). Drop that on one dinner a week for an entire year, and you’ve spent nearly $4K. Save it, and you’re 4% of the way to your end goal of $100K. Every little bit really does count.
In 800 words, I’ve already saved you $10,000. And, we haven't even done a deep dive into groceries, entertainment, and that expensive gym membership you never use.
Don’t Knock The Hustle
In our early days in NYC, we rarely said no to a chance to make extra cash. It was both a way to save and a way to grow our careers. From 2004 to 2008, Ken wrote hundreds of features and album and concert reviews for the Hartford Courant, and we crisscrossed the state of Connecticut, seeing everyone from GWAR to Christina Aguilera. It was fun, but it was grueling. Ken would often stay out ‘til 2, get up at 6, write a review, and head to work — sometimes two or three days a week.
The pay was okay, not great — Ken had to keep his day job. And, he developed an attitude toward spending that still drives me crazy: He thinks about every purchase in terms of how much freelance work he did to earn the money. Want to go to the movies? Tickets for two come to $30 and that’s the cost of a record review. Thinking about buying those running shoes? At $150, that’s two concert reviews. You get the idea. That attitude prevents him buying stuff he doesn’t need (and some stuff he does). I know it’s one of the reasons we own this apartment, but I still kind of hate it.
I didn’t have a freelance income that I could save in the same way. I worked long hours for a book packager, frequently staying ‘til midnight or later and working most weekends. I was lucky, though, to be rewarded with very generous year-end bonuses. I didn’t use those (low) five-figure checks to go on vacation (though I probably could have used one). I saved them, thinking one day maybe I could use the money for something bigger, just not sure what that was.
All of this working and saving might make us seem sad or boring, but I assure you that's not the case. We have friends. We take advantage of so much that this city has to offer. Yeah, we don't dine out, but our dinners at home are one of the best parts of the day. I cook something simple, we set the table with cloth napkins and a candle, and Ken picks a record to play. Sitting at our kitchen table eating dinner, we finally get a few minutes away from our phones and computers. It's not just a way to save money, but a chance to reconnect and really talk to each other, even if somedays it's just to gripe about work or rehash last night's episode of Breaking Bad.
Eyes On The Prize
It wasn’t until we moved in together in mid 2007 that it became clear we could combine our savings and buy an apartment. Before that, I never asked Ken how much money he made, or how much he saved (even though from our early dating days I knew he wasn’t a big spender). Maybe other couples have these conversations sooner? When we filled out a rental application and laid it all on the line, it was a little bit shocking. Between the two of us, we had one heck of a healthy savings account.
Ken and I are never quick to do anything. We dated seven years before we got engaged. So, it took several discussions over the course of a year to determine that we might be able to buy an apartment. I insisted that we could; he was reluctant. We started playing around with a mortgage calculator online, and it seemed a little crazy. In order to make it a reality, we would have to spend nearly every penny we had. But, when we crunched the numbers, it made more financial sense than renting.
Buying an apartment in NYC is weird. The rules are completely and totally different, and the whole process is crazy, complicated, and stressful. You have to navigate the weird world of brokers who have their own agendas. You have to understand the difference between a coop and a condo. And, if you decide to make an offer, you learn quickly it costs a whole lot more than just the 20% down payment. There are lawyer fees, broker fees, inspector fees, closing costs. We had to take all of that into account when deciding how much we could actually afford. But, once we made the decision to go for it, there was no turning back. We told our landlord we wanted to go month-to-month on our lease, and house hunting practically became a second job — a third if you count the freelancing. Good thing Bustelo is so strong.
The Long & Winding Road
After months and months of house hunting, the process of putting in an offer goes fast. We saw the apartment we wanted for the first time on a Sunday. We got pre-approval for a loan on Monday. We dragged my parents in for a second opinion on Wednesday. We made an offer Thursday morning. And, after a little negotiating, our offer was accepted by the end of the week.
That week was intense, but looking back, it was just the beginning.
The months leading up to the closing date were rough. Ken and I were planning our wedding at the same time, and the pressure was a lot to deal with. Nothing went smoothly; everything dragged. I knew we wanted to do this — and I had to believe it would work out — but the process was miserable and many days I just wanted to pull the covers over my head and stay put.
The funny thing about becoming an adult is that most of the time, you don’t feel like a grown-up. And then, all of a sudden, bang, you are one. You have a lawyer. You write a check for $40,000. But, that doesn’t always mean you act like one. During those stressful weeks when we were trying to buy the apartment, I didn’t always handle things well. But, that’s another story for another time. Somehow, we muddled through. Spring turned to summer, and suddenly, everything was coming together.
The day before we closed, Judith, our lawyer, sent me an email with a list of the closing costs and a note to bring “a lot of extra personal checks,” on top of the $40,000 cashier’s check we were giving the seller. The email included a list of all the various closing costs, which we had known about in vague terms (she had warned us we would spend close to an additional $5K all told), but until then we had never seen any hard and fast numbers. It’s crazy that Ken and I agonize over spending $40 on concert tickets, but on that day in July we didn’t think twice about writing a check for $1,700 for our lawyer (the remainder of the $3,000 total fee), $250 for signing fees, and close to $4K in bank fees. Needless to say, when the check-writing was all said and done, the lawyer gave us the keys, and I managed not to swoon on the hot streets of Park Slope, we didn’t exactly feel like toasting our success with Veuve Clicquot. We were gonna stick with the cheap stuff that got us here.
And, that's how we ended up in the empty apartment, raising a toast with cans of PBR, already arguing about where to put the sofa. But, we were happy. Over-the-moon happy. At 28, we accomplished a huge life goal. If we could do this, we could do anything.
In the five years since we moved in, we’ve painted the walls, repaired the shower, unloaded the dishwasher countless times. And, we’ve continued to save money. As savers, there’s always another goal to reach, another dollar or two to stash away. While I may never dine at Per Se or own a pair of Louboutins, I’m more than happy to trade those luxuries for the simple pleasure of stepping across the threshold of my apartment each evening. After all, home is where the PBR my heart is.