How can people possibly afford to live in one of the most expensive cities on the planet? It’s a question New Yorkers hear a lot, often delivered with a mix of awe, pity and confusion.

We surveyed hundreds of New Yorkers about how they spend, splurge and save. We found that many people — rich, poor or somewhere in between — live life as a series of small calculations that add up to one big question: What makes living in New York worth it?

Matthew Kaal was always fascinated by tall buildings, so it did not surprise his family when he left Phoenix in 2006 to attend a small Christian college that held classes in the Empire State Building.

Twenty years later, Mr. Kaal, now 38, works in Midtown Manhattan in a high-rise building. As the director of enterprise systems and services for the American Association of Advertising Agencies, he earned $118,000 last year, including a $5,000 bonus. After taxes, his take-home pay was around $80,000.

His commute is around 40 minutes by subway from Inwood, in northern Manhattan, where he lives after being priced out of the Upper East Side, the Upper West Side and Harlem. After years of living with roommates, he can finally afford to live on his own. In March 2021, during the pandemic, he got a deal on a 485-square-foot, rent-stabilized apartment overlooking Inwood Hill Park. His current rent is $1,570 a month.

Through careful budgeting, Mr. Kaal has been able to save money for his future without giving up splurges like $600 season tickets to New York City FC, the professional soccer club. Last year, he also saw 16 shows and concerts and vacationed in London and Brazil.

“It feels like I live a much bigger life than I think the budget actually comes out to sometimes because I’ve tried to be thoughtful about it,” he said.

Keeping Track of Every Dollar

Mr. Kaal did not start out so comfortably. His first job after college was working in fund-raising and communications for a private school in Hoboken, N.J. He was paid $13 an hour. His commute was an hour and a half each way from a basement apartment in Midwood, Brooklyn, that he shared with a roommate. His share of the rent was $500.

“I used to joke with people that was the period of my life when I read all of Tolstoy and Dostoyevsky because I just had time,” he said. “I had my book that I would take on the train with me everywhere.”

As Mr. Kaal has made more money, he has adjusted his budget. Last year, he was able to put $4,000 into a health savings account, $8,000 into a 401(k) and another $7,000 into a Roth I.R.A.

But his budgeting does not stop there. Every month, he earmarks $250 for a general savings account to build up a nest egg for emergencies. Currently, it has nearly $18,000.

He also puts $200 a month into an account for travel, which pays for a trip to a new country every year. Recent trips have taken him to the Dominican Republic, Portugal, France, Australia and South Africa.

Another $100 a month goes into a culture account so that he can see the Metropolitan Opera, the New York Philharmonic and Broadway shows like “Gypsy.” He tries not to pay more than $150 for a ticket. “I’m siting in the nosebleeds in the $50 seat instead of the $300 seat closer to the stage,” he said.

Budgeting for the Future

He puts another $100 a month into a real estate account for a future down payment on an apartment (if he does not end up buying, the money will go toward his retirement). He has saved more than $13,000 so far.

“I’ve kind of compartmentalized everything off into different little funds,” he said, “so that I’m not accidentally raiding one to pay for another.”

Mr. Kaal, who is single, has even set up college savings accounts for each of his seven nieces and nephews. He sets aside $40 a month for each child, or a total of $280 a month. Currently, the seven accounts hold nearly $26,000. “The way that I think about it is if I lived closer, I would probably be spending that much taking them for ice cream or something,” he said.

To pay for the things that matter to him, Mr. Kaal said that he tried to be “thoughtful and intentional” about his monthly expenses. He typically keeps his electricity bill to $100 a month, even in the summer, when he will open the windows and run the fan instead of using air-conditioning.

A Takeout Savings Tactic

He usually sticks to his budget of $1,000 a month for groceries, household expenses, coffee breaks and meals out. He takes subways and buses instead of calling Ubers, allowing him to keep his transportation costs under $150 a month.

He spends $70 a month on a T-Mobile cellphone plan, and another $25 a month for a gym membership at Planet Fitness.

This year, he has saved more than $100 a month by canceling Netflix, Peacock and other streaming services that he did not use often enough to justify the cost.

He has also cut back on food deliveries. To make himself pause before tapping the order button, he decided that he would donate the cost of whatever he ends up spending to a food pantry or a charity. So far, he has ordered five deliveries all year, compared to three or four a month last year.

Mr. Kaal said he would use some of his savings to increase his donations to local charities. He has set a goal to donate $7,000 this year, up from $2,500 last year.

“I’ve been incredibly fortunate that my salary has grown and I’m able to live comfortably,” he said. “But even when I was barely scraping by as an hourly worker, it was a lot of fun.”