Big cities tend to come with a big cost-of-living price tag. The density of the area means more competition among businesses and more people which means more demand for land. The increased competition and demand lead to spiked pricing in almost every industry in the city. Many people think moving away from the city will save them money. If you are one of these people, you are both right and wrong. Cost of living depends on a variety of factors. Let’s dive deeper below.
1. Housing
If you live in the city, you have probably wondered, Why are homes cheaper in the country than bigger cities? As mentioned, with a more populated area, there is a higher demand for property and not as much to provide. The amount of property that people own or rent in a big city tends to be much smaller than one in a more suburban area. In the suburbs or more rural areas, you can get a much bigger piece of property for the same or a lower price. The property tax is most likely going to be cheaper as well.
If you are contemplating moving out of the city, home insurance shouldn’t be a deciding factor. The price of home insurance can go either way, costing you more or less than in a bigger city. It all depends on the area you are looking to move to. Your area’s crime rates and weather conditions are just a few of the factors that can go into the cost of home insurance.
2. Transportation Costs
Many large cities are known for having a great public transportation system. With more options for public transportation, many people opt for taking the bus, train, or subway instead of driving their own car around. This can save them quite a bit of money in fuel costs. If you are choosing to drive your car in the city, most likely you are driving a shorter distance to get from place to place since everything is more condensed.
If you are considering moving away from the city, it’s important to consider that more suburban and rural areas don’t have as much or as great public transportation systems. This means you will spend more money on gas and vehicle maintenance.
Another cost to consider with transportation is car insurance. Owning a car while living in the city can be very expensive. If you move away from the city, you may notice a decrease in your car insurance rates. For example, New York car insurance will typically be much more expensive than auto insurance in New Jersey. According to The Zebra, in 2022 the cost of New York car insurance was $2,188 a year. While auto insurance in New Jersey was only $1,850.
3. Child Care
Another large cost of living expense to consider if you are looking to move out of the city, is child care. Since expenses like rent, clothing, restaurants, etc. are higher in the city, in most families both parents need to have a job. This tends to be fine since daycare costs are lower in metro city areas.
When families decide to move out of the city for a simpler country life, many opt to become a one-income family. This is common since daycares in the suburbs tend to be much more expensive and overall daily living expenses are more affordable.
4. Daily Living Expenses
Your daily living expenses like groceries, entertainment, dining out, electricity, and healthcare all drop significantly when moving away from the city. There is less competition amongst grocery stores and restaurants, making buying groceries and going out to eat with the family more affordable. Entertainment costs aren’t as high in suburban areas either.
While the city may have plenty of entertainment options nearby, the prices to attend some of the unique shops, popular clubs, and shows are very high. Check out this list of New York’s cost of attractions to compare. Entertainment becomes cheaper outside of the city offering families more options for outdoor entertainment. This includes parks, trails, lakes, and more where people can enjoy nature and entertainment at a lower cost than the bustling city entertainment.
5. Earning Potential
Another factor to consider if you are contemplating moving out of the city, is your earning potential. Salaries tend to be higher in bigger cities than in small towns. Moving to a smaller town may mean that you are saving on gas, vehicle maintenance, and groceries, but your salary will probably also be less. If you are considering moving, you should compare your income-to-expenses ratio in both locations to make sure you will be able to manage your current or new budget and have enough money to put towards building financial security.