How to Save Money While Living in a Big, Expensive City

As you might imagine, many of the big-city dwellers didn't really warm up to my post titled 8 Cheap Places You'd Want to Live (And How to Find More) where I offered this piece of advice:

So if you're in the mood to save anywhere from 10% to 50% of your salary, you may want to consider this simple tip: move.

But one commenter had some good thoughts on how to save money even if you do live in an expensive city. Here are the key thoughts:

We sometimes toy with the thought of moving out of Silicon Valley, but our criteria are hard to meet. Given that many of us in expensive areas are in similar situations, an interesting article would be "how to do well and save money without leaving The Big City." In our case, it would include:

1. Low-ball your car expenses. Just because everyone else drives a BMer or Lexus doesn't mean you have to.

2. Enjoy what you're paying for - day hiking, the beach, and weekend backpacking trips to Yosemite and Lake Tahoe are cheap and fun. Use them.

3. (Not for us, as we bought years ago, but decent advice for young people) Here, rents are much lower proportionately than purchasing. A 2 bedroom apartment in our city would rent for about $1,000, while a similarly sized condo would cost $400K or more. A house could be rented for $2K/month, while it would cost $700K or more. Renting is probably a better option than buying at this point.

4. Other LBYM (live below your means) advice works just as well across the street from Google HQ as it does in Cheapville, ND: don't have silly debt, avoid Starbucks, monitor and prune ongoing expenses - however small - and you'll do well.

I love it! Great advice! Just because you live in an expensive area of the country doesn't mean you can't take steps to save money relative to what others in your area are spending -- you can! Think about which of these tips (as well as all the ones listed in the Free Money Finance saving money category) will work for you, then apply them to your life to make living in a big, expensive city a little more affordable.

Click here to read more ways to save money when living in a big, expensive city.

Comments

[Rhea]

I live in Boston, an exceedingly expensive city. It's true, you can save money. Here are a couple of very small ways to save money: I don't drink coffee, so right there, I've saved hundreds of dollars per year. I don't buy the daily newspaper and instead read the paper at my job or the library. Sounds like a small savings, but at 50 cents a day and $2.50 on the weekend, you can save more than $250 year. Then, in my city there is a ZipCar (rentable cars) service. So that means you don't have to own a car. Etc., etc.

[Amanda]

Yep - I agree. I live in Chicago, and while moving might seem more economical, I would be depressed not living in a big city - I've tried it, it's not for my husband or me. Thus, I've gotten creative about how I can save. One benefit of living in the city is that you don't have to have a car - and we don't. Also, you can take advantage of a lot of free entertainment (festivals, free days at the museum, enjoying the city parks) without having to travel anywhere.

[Teddy]

I like your site very much, but I believe you are being simplistic when you advise people to move in order to get more bang for their buck. My job, like the jobs of many others, is linked to the area. I cannot move to Indiana and expect to earn anywhere near the salary I make in New York. In fact, the job I do is probably only found in major financial hubs.

In addition, I would argue that most people are tied to a region through family and personal relationships in such a way that picking up and relocating is entirely unfeasible. My mother is 77 years old and relies on me for many things. These things require weekly visits. This type of situation is common, if not prevalent. Your point is a strong one only in a vacuum.

Keep up the great work, but I think you need more real-world perspective on this issue. By the way, your correspondent's email regarding "expensive" cities gave me a chuckle. I am renting a one-bedroom apartment for $2,700 a month. A two-bedroom for $1,000? In my dreams!

[Foobarista]

NYC is even more extreme than most places. Silicon Valley has typically been a better deal for renters than buyers, at least in the shorter term. Our mortgage/taxes/insurance on our place is now about the same as it would rent for, although if we were to buy it now, our mortgage would double and our property taxes would triple.

As for being "tied to an area", your point applies to me too; every job on the planet in my field is within 50 miles of my house, with the exception of a company in Sweden, another in Tokyo, and a tiny startup in Seattle.

The "move somewhere cheap" advice is helpful for younger people or people in more "generic" career paths - particularly those that don't benefit from higher local salaries - but older, more established people will obviously judge their own situations and have more complex criteria around doing a major life change such as moving.