When you live in New York City, money disappears fast. The cost of living in the Big Apple is about four times the national average, and everywhere you look there’s sticker shock: a standard one-bedroom apartment runs more than $2,500 a month in Manhattan; a 15-minute cab ride across town costs about $15 plus tip; the average restaurant meal totals $41.76. It’s not only hard to save, but pay the bills, as well. New Yorkers carry an estimated $9,660 on their credit cards.
Anshey Bhatia, 28, is bucking that trend, but only after a wake-up call that had the New Yorker facing a few thousand dollars in credit card debt and a near-empty bank account. The budding entrepreneur had been traveling the world, wining and dining with friends and paying little attention to expenses.
After returning home from the World Cup in South Africa last summer he was startled to see how much he’d spent on this one trip alone—a whopping $6,500 on flights, hotels, game tickets and food. He realized then that he was on a fast track to failing his virtual marketing business, VPV Interactive, and moving back to his parents’ home in New Jersey.
“I felt like I had almost nothing to show for all my hard work in the first three years of the business,” says Bhatia. “I had enjoyed my life but I had very little savings…I wasn’t spending responsibly.”
That was his reality check and from there his plan of attack involved targeting his two biggest expense categories first — rent and travel. With his lease ending, he downscaled his living conditions by switching from a modern, high rise, doorman building to a no-frills, fifth floor walk-up apartment with two roommates.
“I was huffing and puffing the first time I came up…it just seemed like it would be too much, but when push came to shove, this apartment was more than adequate,” he says. Bhatia says he saves about $500 a month or $6,000 a year.
Next, he traded in his globetrotting ways for short, local trips. “Instead of a flight for $750 to Europe, I’d take a train to Washington, D.C. or Boston and hang out with my friends who lived there,” he says. He estimates he saved $6,000 on travel.
Bhatia has curbed spending on social activities and cab rides, as well. Being a young, single New Yorker, nightlife expenses can quickly add up. Dinners, cab rides and club entrance fees can altogether surpass $100 on a Friday night. Bhatia, instead, has been inviting friends over for dinner. He also uses Groupon, StubHub and other discount Web sites to snag deals on food, fun and activities. He’s more committed to walking instead of taking cabs, too, “even if it’s 30 or 40 blocks,” he says. Approximate savings: $2,000.
Bhatia’s start-up is taking off, as a result. He’s used some of his savings to open a small workspace and invest in the business’ operations, which in turn has helped to attract bigger clients and more revenue. “We’re on track for about 400% growth [from last year],” says Bhatia. His story is proof that small changes can yield big results.