A Millennial Living in an Expensive City | The City for Millennials

Hey all! I’m Thomas, a 32 year old Millennial DINC (Double Income, No Kids), living in an expensive city. My Fiancée (she’s the knock out in the picture above) and I work hard and earn a solid living. We are blessed and privileged with amazing opportunity, I know. Yet, cities are becoming more and more expensive. I find it hard to invest in our future, upgrade from a small apartment, or even go out with friends some weekends.

While creative and optimistic, the Millennial generation is expected to be less financially successful than our parents. How are we going to survive living in cities that keep getting more expensive?

I have some thoughts about this topic, and spend much of my time engaged in conversations with other millennials who are also struggling to get by in expensive cities. Thus, I decided to start the blog, The City for Millennials, as a platform for urban-dwelling, up-and-comers to discuss ways to survive in expensive cities. My blog niche combines a passion for city living, with a focus on millennial financial success. I hope you enjoy!

Are you a Millennial?

Millennials are a generation of passionate dreamers, trend setters, and entrepreneurs preceded by Generation X. Howe and Strauss suggest that the Millennial generation consists of those born between 1982-2004. The years differ based on who is defining it, so for the purpose of our community, Millennials are everyone who reached adulthood in the 21st century.

Millennials grew up in a technology filled and socially connected world of opportunity. We are ethnically diverse, and to a hopeful extent, tolerant of differences. Baby Boomers and Generation X often look down on us with equal parts of annoyance and jealousy. They think they had it harder than us.

We Millennials were extremely optimistic as we entered adulthood despite the fact that we are the first generation since the Silent Generation that is expected to be less financially successful than our parents. I’ll admit, we have unrealistic expectations which can cause disillusionment. Many Millennials went to college only to find ourselves employed in unrelated fields or underemployed and job hopping frequently. We want to enjoy travel, have adventures in expensive cities, but also the thrills of financial freedom in a world of intense competition. Millennial, Millennial, Millennial! It is expensive to survive in the city.

A little more about me and my battle with student loans:

I finished a professional graduate school program in my early 20s with $80,000 in student loans debt.

If you are like me (and most millennials), you left school with massive student loan debt. Feel like you’re never going to pay them off? I’ve been there. Student loans are no joke.

My first job out of school paid $40,000 per year. I had no idea the magnitude of debt I was in, but I felt the pressure immediately once the loans started accruing interest. My monthly payments were $800 with an average 7% interest rate. I considered the details of the payments and realized I was barely making a dent into the principle.

With rent and student loans, there was no way to rock the city lifestyle I desired. I had a 15-year repayment period which would cost me $143,000 over the course of the loan. Thus, I would end up paying over $63,000 in interest if paid back over 15 years!

That was not going to work for me. It was time to start getting serious about paying off the student loans, and fast. I set a goal of three years, and by the time I was 27, I was student debt free. The following are 3 ways I found my student debt freedom. Number 3 was a GAME CHANGER!

1. Get serious about paying off your student loans…now!

Loans $uck… and can haunt you for decades. I know it’s tough, but you need to make the decision to bite the bullet and get serious about paying off student loans. The first step to success is admitting you have a student loan problem. Once you’ve decided to get serious, you need a strategy. My strategy was to pay off the loans with the highest interest first! But also…

2. Work for a company that requires you to travel

You can make HUGE loan repayment strides with a travel job, and your early 20s are a perfect time to do it. Many millennials are starting families well into their 30s, giving them the flexibility in their 20s to pick up and leave for weeks on end.

When I was 24, I worked as an ecologist on jobs that took me to Houston, New Orleans, Miami, and Haiti. There are many professions that promote travel opportunities. Whether you are a lawyer, doctor, nurse, engineer, teacher, or anything in-between, you can find gigs that will pay you time and a half, plus per diem to travel for work.

Many millennials are working in fields that are unrelated to their education anyway, so think wide, and think big! Companies are hiring people who want to say yes to travel and yes to opportunity. And it’s a blast (for a few years)!

My first year out of graduate school, I traveled 2 weeks out of the month. During these two weeks I worked hard, most days 12-16 hours. Luckily, the company I worked for allowed compensation time to accrue for any hour after 10 hours a day. I used these comp hours as paid time off or received a straight pay out.

Since I was traveling half the month, I was determined to only pay half a month’s rent. I focused on subleasing my apartment during my weeks away. This took organization and planning, but resulted in huge savings. Now it’s even easier with AirBnB. Ultimately, I purchased a two-bedroom house, found a housemate, and rented out my room while I was away. This covered the full cost of my mortgage. Win!

Even though my base salary was $40,000 that first year, I pulled in nearly $100,000 (before taxes) from traveling and working overtime. I put every penny on top of my salary towards my student loans.

Here’s another tip: Enroll in travel credit cards and hotel rewards accounts. I accumulated enough miles and hotel points to cover my personal travel for 3 years after I stopped traveling for work.

3. Work overseas for a few years

Did you know that many companies will pay more than double your salary if you work overseas?

This was the game changer. In year two after graduation, I decided to say yes to a long-term, work-travel opportunity in the Middle East. Just like that, I went from $40,000 base salary my first year to $90,000 base salary. In addition, they paid for my house, car, and travel while in country (massive savings!).

Here’s the kicker. When you live and work abroad there are ways to exclude your federal and state income from your taxes (consult your tax professional). I found it very helpful to claim the Foreign Earned Income Exclusion tax credit on my earnings abroad. According to the IRS, if you were physically present in a foreign country for at least 330 full days during any period of 12 consecutive months you could exclude more than $100,000 from federal taxes (consult with your tax advisor). This meant my salary was completely tax exempt. I received tens of thousands of dollars as a refund each year and paid off my student loans.