I hear that constantly. Even other finance bloggers from other cities will approach me and ask “wow, how do you save money in a city like NYC?” Some of these people are genuinely curious., But with others, I can read between the lines. Their question is laced with doubt. What they are really saying is. “Tell me your tactics and then I will be able to happily refute them, either to your face or silently to myself and be content with my choice not to live in the depraved money-suck of Manhattan.”
I’ll be the first to admit that NYC can be an expensive city. The only reason that it can be expensive, though, is because there are so many OPTIONS. With over 8.4 million people living in one city (holy crap! 1 in 38 people in the United States lives in NYC!) and over half a million non-farm, private businesses, there are a LOT of ways to spend your money.
But guess what? The increased population and the creative culture that NYC has means that there are a lot of ways to NOT spend money as well. Of course, I’ve talked about various hikes as well as nature walks and even an amazingly challenging urban walk. I’ve talked about cheap sporting events and totally free art galleries. And believe me, there is a LOT more out there. Life has been busy, but there are a lot of activities that I need to get back to before I post about them because I am historically bad at remembering to take photos. There are a ton of free and cheap things to do in the city.
Very Simple Math
Let’s get to the point of this post, though, NYC’s low cost of living. Sure, there are cheap entertainment options, but let’s talk about the necessities to really get to the heart of how expensive NYC is vs a smaller town. Again, there are a lot of expensive options, but so many cheap ones as well. Let’s look at the “big” expenses:
- Food: Shop at Trader Joe’s where the prices are the same across the country. Done. For dining out, see my cheap eats section. You can go out to eat at places that have better food, more variety, and lower prices than a random town in the middle of nowhere that only has an Applebee’s (yuck). Winner: Tie (well, NYC wins with the Cheap Eats, but I’ll let it slide).
- Shelter: There are all sorts of tactics you can use to soften the blow of NYC rent. However, at the end of the day, you will still end up paying more for housing here than you will elsewhere. Winner: Smaller Towns
- Clothing: Thrift stores in NYC are amazing! You can definitely pay less and looks better here than a random small town where you have to get everything from Old Navy*, especially if you have a wardrobe plan. However, if you DO have a wardrobe plan, then you aren’t spending too much on clothing anyway, so any difference is minimal, so I will conclude… Winner: Tie
- Transportation: I have outlined not having to own a car as New York’s biggest competitive advantage. A $113 ($112 if you re-use your old card) monthly metro card is really all you need! Just make sure to avoid cabs like the plague! Winner: NYC
So, looking at these four major expenses, two are ties. Right now we are only looking at Rent vs. Transportation. Let’s do some VERY simple math.
- I pay $875 in rent/month.
- I pay $113 (rounding up) in transportation/month.
My Total (for those two categories): $988/month
- Car owners pay an average of $9,000/year on cars and car related expenses according to AAA. That’s $750/month.
My Total – Car Owners Expense = $238/month = Small Town Rent
That means that I have equivalent expenses to someone in a small town who pays $238/month in rent . For the small towners out there, if you pay MORE than $238/month in rent, then my core expenses are less than yours, on average.
Of course, there are folks in small towns who don’t own cars. Hats off to them. However, most people in this country choose to own a car (or multiple cars!) and can still live a frugal lifestyle. I choose to live in NYC. Don’t think I can’t live well on a budget here as well!
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