How to Cut Expenses in a Big City

How to Cut Expenses in a Big City
Written by Irina Vasilescu

Most families move at one point in their lives or another. For the majority of these moves, the main reason is better job opportunities. The problem is that even if you have a chance to earn bigger money when moving cities for job-related reasons, the cost of living also increases. If you are not careful, you might end up living with an even tighter budget despite having that salary boost.

Fortunately, you can always learn exactly which cities in the US are considered to be the most expensive places to live in the first place. By recognizing which cities have a higher cost of living, you can make budgetary adjustments as necessary.

In the following sections, we will also be dishing out tips on how you can save money when residing in a big city where the cost of living is quite high. Need to know how to cut expenses in a big city? Keep reading then!

The 10 Most Expensive Cities to Live in the US

First, let’s have a more in-depth look at the most expensive cities to live in the US. According to the Council for Community and Economic Research, the most expensive cities in the US have a lot to offer residents. This includes a more vibrant local economy, a more diverse population, a livelier social scene and very interesting tourist attractions. The downside is that your purchasing power decreases because of the higher cost of living.

Let’s say that you live in the suburbs and you have an opportunity to move to a bigger city where you will get a 20% salary increase. This may sound like a lot but when you consider the higher cost of living once you move, you might actually find yourself receiving the short end of the stick financially. This is precisely the reason why you need to consider all aspects of your cost of daily living if you are considering a move to the big city.

To give you an idea about which cities are considered the costliest to live in the US, take a look at the following list. This is based from a list published by Kiplinger and the factors used to measure the cost of living are the rates for housing, grocery items, transportation, utilities, health care, and miscellaneous goods and services.

  1. Manhattan, New York
    Cost of Living: 120.4% above US average

  2. Honolulu, Hawaii
    Cost of Living: 69.1% above US average

  3. San Francisco, California
    Cost of Living: 61.6% above US average

  4. San Jose, California
    Cost of Living: 49.3% above US average

  5. Stamford, Connecticut
    Cost of Living: 44.1% above US average

  6. Washington, District of Columbia
    Cost of Living: 40.1% above US average

  7. Boston, Massachusetts
    Cost of Living: 39.7% above US average

  8. Oakland, California
    Cost of Living: 36.1% above US average

  9. Los Angeles, California
    Cost of Living: 30.4% above US average

  10. San Diego, California
    Cost of Living: 30% above US average

This list is applicable for the year 2014. As you can see, the Big Apple takes the top place simply because it is the most populous and famous city in the world. There are 8.3 million people living in Manhattan alone, making every square inch of rental space acquire prices like gold.

The cost of housing in the city is almost five times the national average. Groceries, utilities, transportation and everything else cost 25 to 35% more. Although these figures do not deter people from flocking to New York to experience the Big Apple, there is no doubt that the cost of living in such city is very high.

How to Cut Expenses in a Big City

If you live in any of the aforementioned cities, you definitely need to learn several techniques on how to save money. Again, even if you are earning a higher salary as compared to when you were living in a different suburb, state or city, the boost in income will simply be offset by the additional living expenses.

To make sure that you are maximizing the additional earnings, here are a few tips on how you can save money while living in a big city:

Make some quick computations before actually moving

If you are moving for economic purposes, make some quick computations first to see if you will benefit from the move in the long run.

Using the aforementioned example, if you are promised a 20% salary increase but you would have to budget twice as much for groceries, utilities and other expenses, is the move really worth it? Probably not. Unless you’re earning twice as much as what you are receiving right now, moving to a bigger city where the cost of living is higher may not make economic sense at all.

However, you should take other factors into consideration as well. If you think that you will be happier as a family or individual in a new place simply because of the change in pace or environment, you might be able to succeed with the move. If you have family or friends in the big city where you’re considering moving, that could be a big factor as well.

But if you are moving purely for economic purposes, it is best to know if it is financially worth it at all, considering the fact that the cost of living when moving to a bigger city is very high.

Think of your rent as a percentage of your income

If you’re still undecided as to whether the move is economically worth it or not, think of your rent as a percentage of your income. The rule of thumb to follow is that you should not pay more than 25% to 35% of your gross monthly salary on rent.

If rent is more than this percentage of what you’re earning, you are most probably be better off staying right where you are. When you consider other living expenses, the salary increase might not be worth it at all.

Lower your fixed costs

If you do decide that the move is worth it but you still would like to cut back on fixed costs, there are many things that you can do, rent-wise.

For instance, if you found work in New York and you would like to get lost in the challenges of living in the Big Apple, you might not necessarily be able to afford a glitzy pad in the city. What you can do is find a place in Brooklyn where the cost of living is not that high. The commute may be a bit longer but considering the huge difference in rent money, you will be saving a lot in the long run.

Even if it’s just the utilities and grocery costs that you can cut back on, you will still be saving a significant part of your salary by moving to a less expensive part of the big city where you’re working.

Cut back on your transportation expenses

For those who are lucky enough to have found a place in the city where rent is pretty reasonable, there’s really no need for you to maintain a car. If you can bike or even walk your way to work or school, that will be saving you a lot of money in the process.

If you live in a city where you really cannot go from point A to B without a car, go for a model and make that is cheaper to maintain. Just because your co-worker is driving a fancy car does not mean that you have to as well. Otherwise, if you live in a city where it’s more convenient to take public transport than drive, ditch the car altogether.

Live below your means

No matter how expensive it is to live in the big city you’re in, you can always turn living below your means into a challenge. Your rent will take a major percentage of your budget, but there are other aspects of daily living where you can save money on.

What about skipping pricey cable TV or satellite TV subscription for a decent Internet connection? You can just subscribe to cheaper streaming content and get your premium cable shows from there.  You can also save money on entertainment by only going to bars during happy hour so that you can save on drinks.

Brewing your own coffee, brown-bagging your lunch at work, using coupons for groceries and eliminating any unnecessary subscriptions are the other ways for you to live below your means while living in the big city.

Take advantage of budgeting apps

Finally, take advantage of budgeting apps. By now, you should already have an idea about how much money you would be spending to survive in the big city on a monthly basis. You know how much your salary is worth and how much money you need to survive, so do the math.

Budgeting apps and websites can help you create a realistic budget and stick to it. You might even have enough money left to allot for a savings account, which such apps are very useful for.

Just because you’re living in a big city does not mean that you have to live on a paycheck-to-paycheck basis. With enough restraint and a lot of advance planning, you can save money while living quite comfortably in the big city despite the higher costs involved.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • Don’t forget the power of roommates! I recently read of a guy in San Francisco with 16 roommates to share costs. While that may be extreme, having a roommate or 2 (or 3!) can make a huge difference in the type of dwelling you can afford. It also makes utility costs easily manageable.

    While it can be difficult to find good roommates, it may be the only way to make living in your dream city a possibility.

  • I agree with Lemonbell! Roommates do help a lot when it comes to cutting the costs of the rent and all that expenses that come with it. I also would like to add the importance of having other sources of extra income.

    If you can afford to work on another job like a part time job or an online gig then do it. You might think that $10 a day work isn’t going to do you much but trust me, my $10 a day work online has paid my rents for the past couple of months.

  • I’m not surprised to see California on the list so often, but I’d be interested to see where Chicago is. Our fees here for general living expenses (taxes, etc) is insane. That said, a good tip is to find extra money where you can. Offer to do an odd job for a friend for the cost of a half a tank of gas, or exchange a favor for a meal. Not to mention selling things for cash! Just because a souvenir with your home city’s name on it isn’t worth $5 for you, it might be worth $20 for someone who has a good memory of your home city and wants to remember it with a souvenir they forgot to pick up.

  • You really don’t need a car if you live and work in the city.

    I kept my car for a few months, but realized that I never really used it!

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