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Just four weeks after being sworn in as New York City’s mayor, Zohran Mamdani issued a stark warning about the city’s financial situation – which he said was on par with the worst recession in recent memory.
“I’ll be blunt. New York City is facing a serious fiscal crisis,” Mamdani said at a press conference on January 28 (1). “We have a massive fiscal deficit of at least $12 billion in our city’s budget.”
Mamdani blamed the shortfall squarely on his predecessor, former Mayor Eric Adams.
“We didn’t end up in this place by accident,” he said. “This crisis has a name and a chief architect. In the words of the Jackson Five, it’s as simple as ABC. It’s the Adams Budget Crisis.”
Data recently released by New York City Comptroller Mark Levine show that New York City faces a $2.2 billion budget shortfall this fiscal year and is expected to see a $10.4 billion shortfall in the next fiscal year (2).
Mamdani described the current situation in dire terms, arguing that the scale of the challenge exceeds even the financial impact of the 2008 recession.
“We are talking about a fiscal crisis [a] It’s bigger than the Great Recession,” he said (1).
Adams quickly pushed back, denying the suggestion that his administration had left the city in financial straits.
“Bond rating agencies have given my administration one of the strongest credit ratings in New York history because we govern with discipline, not fantasy economics,” Adams wrote on
To close the gap, Mamdani said the city cannot rely on a single solution.
“No one thing can solve this crisis,” he said (1). “That will require us to pursue every avenue. It means looking inward at savings and efficiency. It also means raising taxes on the wealthiest New Yorkers and the most profitable corporations. It means recalibrating the relationship with the state.”
During the campaign, Mamdani proposed increasing the city’s income tax rate by two percentage points for residents making more than $1 million a year, while also raising the corporate tax rate to match New Jersey’s 11.5% (4).
While city leaders can discuss tax increases and budget repairs to close billion-dollar gaps, most Americans don’t have that luxury.
When spending rises or taxes rise, households can’t simply vote themselves new income—they have to adjust, plan, and protect the income they already have.
Inflation has had an increasing impact on U.S. household budgets over the past few years
One major expense that is soaring is car insurance. Nationally, the average cost of auto insurance has soared 55% since 2020, according to the U.S. Bureau of Labor Statistics (5).
Car insurance is a major recurring expense that many people overpay for without realizing it. According to Forbes, the average cost of full-risk auto insurance is $2,149 per year (or $179 per month).
However, rates can vary greatly depending on your state, driving history, and vehicle type, and you may be paying unnecessary fees.
By using OfficialCarInsurance.com, you can easily compare quotes from multiple insurance companies, such as Progressive, Allstate, and GEICO, to ensure you’re getting the best deal. Shopping around can help lower your prices and potentially get you a better deal.
Even better, it only takes two minutes and you can find rates as low as $29 per month. Keep in mind that you can usually cancel your policy before it renews, just be aware of early cancellation fees.
It’s not just your car that might be costing you more than you should. Home insurance costs are also up – another major expense where smart shoppers can save big.
Compare home insurance rates quickly and easily with OfficialHomeInsurance.com. Just fill in some information and the platform will instantly sort through more than 200 insurance companies to find you the best deals in your area.
You’ll be able to view all the deals in one place and quickly find the coverage you need at the lowest possible cost, saving you an average of $482 per year.
Read more: Nearing retirement but no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)
One of the easiest ways to reduce financial waste is to put idle funds to work rather than sitting idle.
If you’re building a financial safety net, a high-yield account like the Wealthfront Cash Account can be a great place to add to your emergency fund, offering both competitive interest rates and easy access to cash when you need it.
The Wealthfront Cash Account offers a base variable APR of 3.30%, but Moneywise readers can exclusively get a boost of 0.65% in the first three months, giving the bank a total APR of 3.95% on your uninvested cash. That’s ten times the national deposit savings rate, according to a January report from the Federal Deposit Insurance Corporation.
With no minimum balance or account fees, along with 24/7 withdrawals and free domestic wire transfers, you can be sure your funds are always available. In addition, the FDIC insures Wealthfront cash account balances up to $8 million through program banks.
But even your spare change can come in handy. Microinvesting apps like Acorns allow you to invest small amounts automatically, turning everyday purchases into long-term investments.
When you make a purchase with a credit or debit card, Acorns automatically rounds the price to the nearest dollar and invests the difference (which would end up in coins in your pocket if you paid cash) into a diversified portfolio of ETFs.
Paying $3.40 for a cup of coffee? The app rounds it up to $4 and invests the additional $0.60. Over time, these small amounts can add up—especially if you keep spending and saving.
It’s a simple, set-and-forget way to build wealth with money you probably won’t miss – and if you sign up today and make regular monthly investments, Acorns will add a $20 bonus to help you get started on your investing journey.
If you want to improve your financial situation, a critical step is to understand where your money is actually going each month.
You can try tracking all your spending for 30 days and dividing it into two categories: necessities (such as rent, groceries, utilities, and health care) and discretionary spending (such as eating out, entertainment, shopping, and hobbies).
This breakdown not only shows where your money is flowing, but also highlights hidden holes—forgotten subscriptions, auto-renewals you didn’t notice, or small impulse purchases that quietly accumulated.
A quick look at your account each day can show you exactly where your money is going.
Apps like Rocket Money make it easy to flag recurring subscriptions, upcoming bills, and unusual charges by pulling transactions from all linked accounts.
This can help you cut unnecessary costs, and you can then manually transfer the savings directly into your retirement fund. No spreadsheets, no guesswork, no stress. Small habits like this can have a big impact over time.
Rocket Money’s intuitive app offers a variety of free and premium tools. Free features include subscription tracking, bill reminders and budgeting basics, while premium features like automated savings, net worth tracking, customizable dashboards and more make it easier to stay on top of your super contributions and overall financial goals.
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Office of the Mayor of New York City (1); New York City Comptroller Mark Levine (2); @ericadamsfornyc (3); Zohran for New York City (4); U.S. Bureau of Labor Statistics (5)
This article provides information only and should not be considered advice. It is provided without any warranty of any kind.