Updated: Mar 14, 2024

How to Handle the Cost of Living on Goods in the Big City

Find out how you can accomplish your dream of moving while still managing the higher costs that can come with big cities.
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Finding a rental to fit within your budget in a big city like New York or San Francisco can be a monumental challenge. But the sticker shock isn't over after you sign your lease. In fact, it will only just be beginning.

Expenses you might not have thought twice about before can become a serious financial strain if left unchecked in a big city. Where dinner and drinks with friends were once no big deal, they can really set you back in a new city. Add in other things like higher gas prices and groceries and you could be shouldering a much larger financial burden than you thought.

In 2015 Eventbrite took a look at the high cost of a night out on the town in some of the country’s biggest cities, including event tickets, transportation, drinks, and late night snacks. Chicago was the highest at $90, followed by Atlanta at $87, Los Angeles at $85, New York at $82, and Austin and San Francisco tied at $71. Commit to going out more than once a month and you’ll be shelling out a significant amount.

Higher costs don’t stop there. According to Smart Asset, monthly parking rates in San Francisco are between $200-$400 and the cost of gas is 38% higher than the rest of the country. In New York, some clothing items could see a markup of upwards of 60% compared to other areas.

The good news? Dealing with a higher cost of living isn’t impossible. In fact, with some careful financial planning and an eye on your budget, you can make it work. Not only that, but you can build a solid financial future in the process.

Here are a few tips to get started.

Determine Your Priorities

One of the biggest realizations of my adult life has centered around the importance of establishing financial priorities (and life priorities in general). While I have a desire to earn more money, I know my bigger priority is time. And, while I may want to meet new people and have a full social calendar, carving out ample time for my family is higher on my list.

It’s all about understanding that I CAN have what I want, as long as I’m willing to let go of the things I might not want as much. It’s about clarity, not lack.

Finances are no different.

If fitness is a top priority and you don’t want to let go of your gym membership, you don’t necessarily have to. But something that gives you less joy and fulfillment (like eating lunches out every day) might be the perfect area to cut back on so you can afford that gym membership.

Try this exercise to determine your priorities:

  • Make a list of your common variable expenses: everything you don’t need for basic survival.
  • List them in order of importance to you. What are your non-negotiables? What adds to your life and what would you quickly forget about if it were gone?
  • Pay attention to the average amounts you're paying for each. Are they weighted to what matters?
  • Decide what you could cut in order to spend according to your top priorities.

Find Ways to Plan Ahead

Convenience spending (whether it’s grabbing takeout on the way home or taking a cab instead of the subway) is a massive money suck. It can turn any well thought out budget on its head and leave you feeling like your funds just can’t stretch as far as you need them to.

The enemy of convenience spending? Good planning.

One of the best ways I manage to save money on food throughout the week is to reserve a portion of my Sunday for meal planning and food prep. Some weeks this might be nothing more than scribbling out dinner ideas based on what’s in the fridge. Other weeks it might mean marinating meat and creating more comprehensive menus. This, paired with cutting up fruit and veggies for easy snacking, gives me no excuse to resort to convenience eating. In this case, my planning prevents unnecessary spending.

Another way I’ve managed to save is to take a big picture approach to planning social events. If I know I committed to a night out with friends one Saturday night, I’ll avoid making costly plans in the weeks leading up to that commitment. I know I can have that one more expensive night out, or I can allocate that money to smaller purchases throughout the month.

It’s about choice and planning, not restriction.

Take Advantage of all Those Extra Options

Perhaps one of the biggest benefits to living in a big city is having more options. Whether it’s food or entertainment, there’s something for everyone.

According to a study by Jessie Handbury of the University of Pennsylvania and David E. Weinstein of Columbia University, this isn’t just an added perk; it can lower the amount you spend on groceries.

While other price comparisons suggest groceries are more expensive in big cities, this study did what others don’t: it compared the barcodes of the same items from 49 U.S. cities, instead of just similar items. It also took into account the fact that some items aren’t available in all cities.

The results showed a city double in size had 20% more products to purchase, and they were less in comparison to other cities. According to CityLab, groceries in New York cost 1.5% less than in Des Moines. If you take more product availability into account, they cost 4.2% less.

The bottom line? With more options available, you can skip the expensive corner market or bodega and venture a little farther to find a better deal. You don’t need to settle for high priced items when competition is plenty.

Learn to Love the Free Things in Life

Not only are big cities hubs of activity, a lot of those activities are free - if you know where to look. You might end up feeling like a tourist for the day, but who can complain with a price as good as that?

For example, museums in Denver are free on select days throughout the year. You can even reserve a free ticket for participating museums through some local library branches. New York has a lengthy list of museums that are free to the public - while most others are donation-based (meaning you set your own price). Several museums in and around San Francisco are free at least one select day out of the month.

Outdoor spaces are budget-friendly too and they have an added perk: they can remove you from the fast-paced city life that might wear on you after awhile. Some cities have national parks a short drive away that are either free year-round or on select days established by the National Park Service. Don’t have a car? No problem. Pack a picnic and head to your favorite local park.

If music is your thing, plenty of big cities offer free concerts, especially during the summer months. Or, if you’re an art connoisseur, you might enjoy “art walks” where you can browse through local galleries for free, usually once a month. You might even snag a free glass of wine in the process.

Regardless of your interests, you can find a way to replace those costly activities with free ones. All it takes is a little research.

Keep Your Eye on the Big Picture

It’s easy to feel stifled when such a large portion of your income is covering the basics that don’t cost as much in other cities. It’s even easier to resort to a mindset of just “getting by.”

But even with a high rent and cost of goods, you can still feel empowered with your finances. Here's how:

  • Create and Automate Savings Goals

Think of your savings as “freedom money.” The more you put away, the greater freedom you have to make the life choices you want to. If you can only afford $25 a month to start, that’s okay. Automate it so you don’t have to wrestle with willpower just to make it happen.

  • Establish a Money Tracking System that Works for You

Maybe tracking every single purchase on a spreadsheet doesn’t work for you. Maybe you just can’t get on board with using an app to monitor your spending. Don't worry! No one budgeting or money management system works for everyone, it’s about finding what works for YOU.

The more you know about the money coming in and going out, the less you’ll have to deal with anxiety, guilt, or any other money emotion that could be holding you back. Track it any way you want, just make sure you track it somehow.

  • Align Your Spending with Your Priorities

Making money choices you feel good about goes back to those priorities we talked about earlier. It might take you awhile to align your spending habits with your priorities, but that's okay! That’s why frequently checking in can be so helpful. Eventually, you'll be able to curb mindless spending and make money choices that make you happy.

No matter how daunting it may seem, you can create the lifestyle you want in the city you love. It might take a little more maneuvering and planning, but a little mindfulness can go a long way.