There are a lot of places to go Downtown, so just walking around would be the best option. If you plan upon taking the subway anywhere, you'll need to buy a Metrocard at one of the vending machines located in the stations. Hopstop.com is great for subway directions, if you do need them. MSG is right by Penn Station, so that gives you the option to do a bit of exploring by subway, if you're up for it.

Madison Square Garden is surrounded by places to go/things to see, so just walk a couple of blocks in either direction and see what's around. I'm not entirely sure about hotel costs, but know that there are a lot of hotels in the area, as well as youth hostels, (which might be a better option for you and your friends since it will be much cheaper that way). If I'm not mistaken, there is one located right across the street from MSG called the Manhattan Inn Hostel. There are plenty of other options all close by, so ask around or just look for the big signs.

As for things to do, the Manhattan Mall is pretty close by. It's located on the West side of 6th Avenue between 32nd/33rd Streets. Macy's Herald Square is located upon West 34th Street (between Broadway & 7th Avenue). Also close by is the Empire State building, where you could visit the observation deck. It's located at 350 Fifth Avenue (between 33rd/34th Streets).

I think the best thing to do would be to find a hotel first. Wherever you decide to stay, ask the people working there for pamphlets and other info on attractions located nearby and they can give you even more specific suggestions and directions on how to get there.

I'm gonna PM you this, just in case you don't check the thread again. NYC is a bit tough to navigate if you don't know it, so the more you know ahead of time, the better, lol.

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what is this i dont even