I'm too lazy to read the article, but if you have to scrimp and save for a $450,000 1 bedroom apartment, are you going to be able to afford the taxes, the fees, the renovations, and the furniture? Saving is definitely good, but as described in the post it sounds like these folks will be hanging onto their little piece of NYC with razor thin margins.

While I'm all FOR savings, in the end, market fluctuations and rising costs make the difference meaningless.

Suppose that you saved 1000$ a year in your twenties, even with good investments, how much would that add up to? the pricing change in one year, or the cost for the realtor.

they need to be smart investors too while they make their small savings.

If you put your money in a savings account, the compounded interest will barely be break even if you factor in taxes and inflation.

I'm all for saving too, but is anything worth questioning the most basic purchases. Are these people enjoying their 500 sq. ft. apartment sans furniture? Do they realize they can probably find the same apartment for $250K if they leave Manhattan?

@uricmu:

I'm pretty sure were talking about saving more towards 10K a year, not 1K. Moreover if this is a couple 5K each shouldn't be that big of a problem. (You should be maxing out a Roth at 4K a year in your 20's anyway - which, if used directly for the purchase of a home is tax exempt.)

Bravo to them I say. I'm sure they didn't deny themselves everything to the point of being miserable, and in the end their efforts paid off. I know too many people in their 30's and approaching 40's who have nothing, no home, no savings, no retirement plan. I've always been a saver, and while that makes no guarantees, it's generally better than not saving at all.

I would just investing in equity mutual funds, large plus small cap stocks, high income bonds, government bonds, money market, CDs plus the like, and high yield savings accounts. I would not suggest options, futures, nor collectibles to people who are penny pinching.

Grammar is not my friend today...

It really says a lot when a family that managed to save for a New York City apartment makes national headlines.

I grocery shop with a fairly strict list, buy store brands in almost every case and try to work as many meals out of cheap staples (like pasta) as possible. Frozen vegetables are useful rather than buying expensive produce and trying to only buy food that is on sale or has a special deal attached is also helpful. I go clothes shopping, but I try to be good in budgeting to work it all in. If I have a big shopping trip on the weekend, I have to subtract probably a few nights of going out (not essential, obviously) and part of the grocery list.

I'm on a student budget though, so it's not so much that I'm saving up for something (at least it's been that way in the past, this year I'm also saving for plane tickets) as just trying to stretch my money as far as possible.

Also it's funny that the clip art of "the good life" definitely does not portray NYC.

This is a ridiculous article. They have a child, and they are getting pats on the back for scrimping and saving (which is fine) for a 450,000 STUDIO apartment? Moronic. It's not just the apartment, it's the address. So they selfishly moved into a place above their means, and crammed the whole family into a tiny box so they could feel special. Great work, assholes. I know you can go to central park and all, but 450,000 here would buy you a 7 bedroom house with an acre of land. The real story should be 'Hero dad and mom save money, get the hell out of the violent, polluted, dirty, city.' And yes, I used to live there.

haha i like how everyone on the board tells it like it is...good job for them scrimping 450K but they really should have thought about relocating a little outside Manhattan if they want to raise a family...props to everyone who looks passed the Cinderella story.

In NYC, $450K for an apartment is a reasonable price. Most apts cost a lot more. Additionally, it's likely a good investment since the prices in NYC are still shooting up. IMO, if you can't buy an apt outright then it's better to pay mortgage than rent.

I should add that it's pathetic that a few people saving money is newsworthy. Everybody should try to save as much money as they can. I don't get people who waste their paychecks on nonsense and have nothing in the bank.

Sure, you can end up wasting or saving thousands of dollars over the years, but isn't it some sort of adage that if you save a little bit of money every day, you'll be surprised in the end at how little you've ended up with?

Anyways, anyone can end up with plenty of money to buy a house if they just stay single and never have kids.

maybe they felt like raising their kid in an environment with some culture and history instead of some cookie cutter levittown or hicksville usa. You get what you pay for.

@camas22: There are milions of places to live besides a 450k studio apartment in NYC that have just as much, if not more culture. See also: a globe

Also, if you read further a woman was crying because her friends could afford bigger apartments. She wanted a bigger place to house her Spiderman, lunchbox, and Nightmare Before Christmas collection. Here's a tip... stop buying toys.

Her solution was to save some and then write a 6500 dollar check from her credit card. That doesn't sound too responsible either. So now she pays a mortgage and the credit card bill with interest.

After I re-read the article a few times, it's a really shitty article.

I can't believe the negativity toward this couple! They have a dream and they've gone for it! Maybe their dream is not YOUR dream, so....tell us how you achieved yours instead of demeaning theirs! As for me, I'm from a generation that is used to saving up and deferring gratification. It becomes an end in itself, and now I find that denying myself what I'd like but don't really need is both easy and in a way empowering. It's nice to know I could survive on a shoestring if I really had to. And, I'm far less compulsive a consumer than nearly everyone I know. That suits me.

So much for the new comment moderations.

Wife and I have been looking to buy a place. Current rent on the Eastside (Seattle suburbs) is $1500 a month and probably jumping to $1800 or $2000 in the fall. Our son is in a great school district, and that's a huge plus we'd rather not give up. But we just can't afford an $800K starter home in this neighborhood. Been looking around the Sound Sound area (Puyallup, just above Tacoma), and there's affordable places in great school districts very close to the commuter trains. This is the future of the plutocracy. Create an urban and suburban inner keep for the elites and make the working scum commute in.

To the people who are criticing the couple for only getting a studio apartment for $450k -- I say the couple is making a great decision. Most likely, their jobs are nearby. If they had moved further out, they'd be spending money on transportation costs, not to mention they'd be in another suburb full of housing and nothing more.

I see the same type of thing happen in Tampa. People move to the next county over (Pasco county) because "taxes are lower there" or they're attracted to the hundreds of newer tract, land prices are less, etc. So, they've traded that for much longer, hellish commutes & much higher gasoline bills.

I did the opposite about a year ago, moving from the outskirts of Tampa to an older, established neighborhood within city limits. My "city" home's 20 years old and its age gave me a great opportunity to remodel it to my liking, something I couldn't justify with a new home, and no tract-home builder would be willing to make the changes I'm doing here (total gut, quality work, all top-notch materials & fittings).

My commute dropped from 45-90 minutes each way down to 8-15 minutes each way. 1.5-3 hours a day. That's nearly 15 extra hours a week that would have previously been wasted in traffic. Now I'm able to use that time for anything I please. Not to mention that I'm now closer to shopping, good (non-chain) restuarants, beaches. The gas savings goes towards the renovation. Between the gas savings & energy savings from the improvements I've made, the remodel will have paid for itself within the first 2 years. This is ignoring the positive effect these improvements will have on my property value, which makes this an even sweeter deal for me.

Likewise, my other home is a beachfront condo. You better believe I could buy a large house on a large piece of property somewhere out in the sticks for the same amount of money, probably could buy a couple of them with what the place is currently worth. It comes down to quality of life. I don't need, nor want, a McMansion, even though they're in this price range.

Similarly, a friend & neighbor of mine has a 625 sqft flat in London's Belgravia district. Last time I checked the place was worth £1.3m. Is it worth that much? Absolutely. Everything you could imagine is within walking distance and the interior furnishings & fittings are absolutely top-notch.

In many ways, this is no different than saving for, and buying a car. Are Bentley cars overpriced? Yes, if you're comparing it to a Chevy or Dodge Neon. Both will get you from Point A to Point B. The difference lies in the not-so-apparent differences. While I can't personally justify the cost of a Bentley, I have driven them and can say that after driving them, they're not as overpriced as I had originally thought they were. Maybe about 10% overpriced compared to the 50% overpriced I thought they were before.

I realise Americans are hung up on quantity of things and have no regard for quality. In many ways, this desire to have the largest, most, for the cheapest price, is what leads to the need and purpose of the Consumerist website. If you start focusing on quality over everything else, you'd be surprised how enjoyable this world can be.

Just how much is YOUR time worth? How much would you be willing to pay to get an extra hour of free time a week? How about an extra 15 hours/week? In my case, the net cost to move was nothing. What was the quality of life improvement worth? Priceless.

@FLConsumer: Totally agree.

I'm glad to see the article. Gives me hope that I might actually be able to buy a place (someday...) in DC.

Or you could do what my wife and I did for our 1st starter home. We talked each of our parents into giving us very low-interest $10,000 loans that we wouldn't need to start paying back until after 3 years. This way we were able to put down a 10% down payment of $28,000 with only $8,000 of our own money.

After two years we sold the place for $120,000 profit (it helped living in Boston in the early 00's), paid back the parents, and were able to put 20% down on our next place that cost twice as much as the 1st. Considering that we only had $8,000 personally invested, that ended up being a 12.5x return on investment.

Through leverage and buying up we were able to afford a house that we couldn't have imagining saving enough for in only two years.

It does seem incredible that so many commenters are critizing people who are saving, not spending money are crap, and instead buying an asset that will liking appreciate in value in the long term. As for those who say that they should have gotten a larger house in the suburbs rather than a 450 sq ft apartment in the city fail in keep in mind that, with a larger house, comes higher heating and cooling expenses, lawn care, resurfacing the driveway, refinishing the deck, shovelling snow in the winter, finishing all of those extra rooms, not to mention to cost of the car or a train/bus ticket, the commuting time to and from this house, and not seeing your kids as much because you are leaving earlier in the morning and getting home later at night. I have to reinterate the point of the article which is that instead of frittering alway cash on a series to utterly forgettable lattes or disposable electronics, they put the money instead toward achieving a major tangible goal. It's not news, but considering how many people have consumer debt, no assets and no saving because they spend more than they earn the lesson bares repeating. Just like the lesson on eating less and exercising more for a nation of obese people - not rocket science but needs to be repeated.

For all the commenters commenting on how they're going to be living in a cramped studio apartment, try reading the fucking article. They've got a two bedroom condo. Good for them. That's more than enough space for a family of three or even four.
Look at how we lived even 30 or 40 years ago. Kids shared rooms, people learned to live in close proximity, share things and go without the instant gratification of a seperate bathroom for every inhabitant. My god - in that kind of space you might actually have to interact rather than everyone plugging into his or her iPod or Tivo or SecondLife. Or, when you get fed up with your bratty sister you might go OUTSIDE in the real world and experience things.
Hopefully this family's spending habits will persist in a lifestyle that consumes less but is much richer than the mcmansion dwelling, SUV driving suburbanites that so many here apparently aspire to become.

If you read the actual article it says they were able to save $90,000. They are now in debt to the bank with interest, wow great job!

I'm going to assume these people haven't been renting furniture-less apartments in the city for years, so I don't know where the idea that they'll be unable to furnish their new homes come from. Honestly, I'm really surprised at the seriously negative reactions from so many commenters.

Yes, OBVIOUSLY there are houses in other parts of the country that cost less. How is that an insightful comment? That wasn't the point of the story; it was that although some thought home ownership in NYC was unattainable, it turned out not to be. (Also, to everyone suggesting they should stop being selfish and head for the 'burbs: have you looked into home prices in the suburbs surrounding NYC? That is some of the most expensive real estate in the country. I'm sorry; I don't want my kids growing up with the seriously entitled attitude I've seen running rampant there.) A lot of these comments just sound like bitter complaints from people who couldn't hack it in NYC.

@camas22: "in an environment with some culture and history instead of some cookie cutter levittown or hicksville usa. "

Spoken like someone who's never visited flyover country.

@all: Personally I can't imagine wanting to live in New York City, but good for them saving up enough to do it. (I am so down with the "short commute" argument. After a 60-minute commute in DC we now have a 10-minute commute and THAT ALONE skyrocketed our quality of life.) And it's not like those condos are going DOWN in price ever!

I'd just like to add if they get a 30 year mortgage (remember they only put down 90K) their monthly payment at %6.5 is $2,275.44. Their total interest paid will be: $459,160.16. Their total of 360 payments will be: $819,160.16.

So how is this good news?

@mbills2:

They had $90K in cash. Now they have a note with the bank secured with their new home which is worth the mortgage PLUS $90K. In the time that they will spend in the place, the value will likely increase so when their life plans change and they sell, they will get more than $90K out of the deal. That's what leveraging money is all about and with this type of investment, you get to live in it. Try that with $90K stuffed underneath your mattress down by the river.

@mbills2:

If we agree to accept MBILL2's assumption that this couple will make all 360 payments on their mortgage and spend $819K over the course of 30 years, let's look at that from a different perspective.

Currently, $2,220 per month for a two-bedroom is reasonable. In the year 2037, $2,220 per month will be like hitting the lottery.

Setting aside increases in tax and maintenance fees, getting a fixed-rate mortgage is like locking in your rent for the next XX number of years for people coming from a renting background.

Also, in 30 years time, it think it would be safe to assume that the couple's $450,000 apartment will be worth a little more than $819,000.

If you just stop eating and drinking altogeter, you can afford a really nice home. A coffin and burial plot only cost around $10k.

I'm pretty sure this concept of ultra frugality has been around forever. It's called being "house poor".

I'd rather enjoy life.

@eli_b writes:

"The real story should be 'Hero dad and mom save money, get the hell out of the violent, polluted, dirty, city.' And yes, I used to live there."

Yeah, knee-jerk stereotyping of the city is a load of crap. Sure, there's dirt and crime in the city, but it's elsewhere too. I grew up outside of a small town of about 200, and moved to a metropolitan area of about 2 million. While you can't beat the price of living rurally or in small towns, the lower cost is because you're making less; wages are lower. In my little town of 200, a guy once came into a high school classroom with a knife going after his girlfriend. Didn't even make the evening news. Replace soot for ag-related pollution, and welcome to the country!

And as for the violence of the 'burbs--it happens there, too. Think of Columbine. As in the suburb of Denver. The violence there just isn't as broadly covered.

It's great to feel good for living where you do, and to know why you enjoy it. Just don't pin stereotypes of crime and pollution on cities over other places when they're common to pretty much all locales (except maybe the Alaskan wilderness.)

not sure which is better...the article, or the comments. as someone who rents in NYC and would love to buy here but sees it as being nearly impossible, this story is pretty inspiring.

@mbills2: That's $819k they'll have back in some shape or form down the road rather than pissing it away on rent with a return of absolutely nothing.

If you're smart, you DO get a mortgage on the house, then invest the money you otherwise would have tied up in the house to make more money. You can also deduct some of that home mortgage interest as well.

What's up with everyone here not wanting people to own homes? Renting sucks.

While giving up life to buy a condo isn't for me, we shouldn't criticize them for wanting live on Manhattan - geez, it may not be for YOU, but it is one of the best places in the world for SOME people.

@ Those on about leveraging money.

That will work if there is not a side in housing prices. Which is seemingly the trend we will all be going into over the next few years.