Big or Small City – What Really Costs More?

I’ve recently completed a seven day road trip across the country – Manhattan to San Francisco. In that week I’ve seen more than I could ever imagine and already feel like living in New York was a lifetime ago. Now that I’m settling down in San Francisco I’ve also had to rethink my entire budget. Luckily I’m used to Manhattan and ridiculously high prices for everything, but I’ve been spoiled as I’ve stopped along the way across the country. I’ve been in hotels near big cities like D.C. that cost as much as a bed and breakfast in Flagstaff, Arizona. I’ve had five star dinners in the South that were cheaper than a three star dinner in Manhattan. Conversely, I’ve watched gas prices in the Midwest jump by more than a dollar once I hit California.

I don’t think I’ve ever been more aware of the differences between prices across the U.S. as I have this week.

This trip took me back mentally to the days when I was living in Ohio, long before I knew I’d ever make it to New York (or San Francisco!). Everyone seemed to struggle financially since the economy was rough there even before The Great Recession. The person I was would have been shocked at the money I was making a few months ago but all is not as it seems. So what if you’re living in a smaller city and making an average salary and then you hear of a friend making twice as much living in a big city? You might think that your friend is living the life while you’re just barely getting by. However, your friend living in the big city could be wondering where all the money from their salary is going because their lifestyle doesn’t seem all that glamorous by comparison. So what’s really better? Making a higher salary in a big city or a lower salary in a small city?

Pure Numbers

Basing this decision on pure numbers is difficult. It’s easy to assume that making more money is always better but I’ve learned from experience that there are many other factors that go into this. You have to consider all kinds of things like the taxes you’ll be paying, how much daily staples will cost, and the lifestyle you’ll want to lead. But I’ll get further into that later. First, let’s stick to numbers.

When I was living in Cincinnati, OH, a few years back I got a job making $40,000 per year. This felt like a windfall after making peanuts working as a bank teller and later personal banker. I was living with my parents so I could save money to move out of town, but had I stayed and wanted to live in the type of apartments and neighborhood I liked, I would have payed about $600 a month for rent. (This is for one bedroom in a two bedroom apartment. If I wanted my own place in a different neighborhood then I could have paid $500.) Add on the expense of owning a car and that’s another $300. Since I can’t cook I buy very simple foods and my groceries were only $100 per month. I paid about the same as that each month on entertainment (this includes going out to restaurants and bars). My total expenditure would have been about $1100 per month. Since I was taking home roughly $1000 every other week after tax, this left me with about $900 to go to student loans and savings.

Cut to a few years later. Just a few weeks ago I was living in New York and making $47,500 per year. The rent for one bedroom in a five bedroom apartment was $900 and I didn’t need to have a car anymore since public transportation in New York is so good. Instead I paid $100 per month on an unlimited subway pass and another $80 per month on cabs. My groceries stayed the same and since I lived in the East Village I could keep my entertainment budget low as well – about $100 per month. There were plenty of bars in my neighborhood that had happy hour prices all day long on Saturdays and Sundays and you could get a great brunch with drinks and coffee for less than $20. So at this point, my budget looked close to the same as it was in Cincinnati. I was taking home $1400 per paycheck so I had $1700 to go to student loans, savings, and other bills. Sounds like a lot more, right? Not so fast…

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Living in New York taught me quickly that although I make more money than I would in Cincinnati, I have to be perfect if I want to maintain the same budget. Is it doable? Yes. Is it difficult? Absolutely. The wrench is this: Lifestyle.


On paper both situations look the same. It took me a couple of years of working after college to get the $40,000 pay I had at the end of my time in Cincinnati. Likewise, it took a couple of years of working in New York to get the $47,500 I was making (in fact, my starting salary was under $40,000). That meant years of sacrifice financially and literally sharing a bedroom to make ends meet. Also, although I was eventually able to get my budget to look the same, that took quite a bit of personal control which I didn’t always have.

For example, when I lived on the Upper East Side I was sharing a bedroom to keep rent low and only went out on the weekends. I already had a long commute down to FiDi everyday so once I got home from work I didn’t want to go back out. Plus, I had to leave my neighborhood to go out because I couldn’t afford any of the bars or restaurants nearby.

Then I moved to the East Village – the neighborhood with more bars, restaurants, and coffee shops than any other neighborhood in New York. My commute was about the same but I could hardly get myself to sit quietly at home and cook dinner after work. It was much too easy to meet a friend at our favorite Thai place, then walk to the Moroccan place for dessert, then a bar to get drinks. Living in the East Village, every day could be Friday!

With so much to do all within a few block radius, it was hard to say no. Then I discovered my favorite coffee shop and soon I was spending a few bucks every morning for coffee and several times on the weekends because that’s where I went to work on my writing. Suddenly my entertainment budget shot through the roof (as well as my yoga budget – eating out all the time can have an equally disastrous affect on your physical fitness).

Now let’s talk about space. Remember that $600 apartment I was looking at in Cincinnati? It was in a great neighborhood (safe, fun, full of 20-somethings) and was 700 square feet. What about the square footage in my East Village apartment? I don’t know; I don’t even want to know. I lived with four other people and had a bedroom that I liked to refer to as my shoebox. It was literally big enough for a bed and a skinny set of drawers. I shared one equally small kitchen and living room and two bathrooms with four other girls.

The apartment in Cincinnati was beautiful – pristine, practically. My apartment in New York had something new break every other week. The radiator leaked, the heat went out, the toilet wasn’t working, etc. Did the landlord care? Not so much. Sometimes things got fixed right away and sometimes I had to literally phone stalk them to send a maintenance guy. The same guy who inevitably didn’t know to bring a certain tool so had to come back the next day or who would actually not be able to fix the problem at all. And he usually left mud tracks all over the apartment. (Should I even mention the day I got home from work and fixing our toilet while singing “Let’s Get it On” at the top of his lungs?) So yeah, our landlord was not really concerned with keeping tenants. He knew we were lucky to have such a cheap apartment in the East Village!

And that’s where lifestyle comes into play. I could have gotten my own place in Queens for the same price, but then I would have been farther from work, friends, and my favorite neighborhood in the city. What about getting my own place in my favorite neighborhood? Forget it, that would have cost at the low end $2200 per month – and now that number is more often around $2500 per month. There was no way I could do that which is why I chose to live with roommates. Eventually I had to reign myself in. I got myself back to cooking on a regular basis and found a yoga studio that was donation based so I could do that for cheap during the week and only go out on the weekends. Soon my budget was about back in order (but not without some serious damage control along the way).

At the end of the day, deciding whether it’s better to make more money living in a smaller city or to make more money in a big city will have more to do with the kind of life you want to lead than simple financials. Yes, you may take home less money in the smaller city but there is no question that your dollar will probably go much further.

I often had moments wondering why I worked so hard to make a half decent lifestyle in New York when I could have been so much more comfortable in Cincinnati. In order to save the same amount of money each month I had to stay on top of my budget perfectly and sacrifice a lot of the things the city had to offer. No dining at some of the most famous restaurants in the country, no going to clubs with drinks that start at $20, and no shopping in the fashion district. This worked for me since I preferred to spend most of my time at my favorite coffee shop writing but many other people could have a much harder time – especially foodies and people into fashion! Plus, I hardly even want to mention how many more hours you are going to work for that higher pay.

So why did I do it? I just love living in the city! That’s why this is simply a personal decision. I have friends in Cincinnati who thought I was crazy and were more than happy to make less, have bigger and nicer apartments, and be able to do whatever they want on the weekends. Numbers aside, it’s all about who you are and what you really want.

What’s been your experience? Share your thoughts below!

Image credit: Randy Le’Moine Photography

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  • Thanks for sharing your experience with so much honesty. It changed my thoughts about the expensive lifestyle.

    • Shannon_ReadyForZero

      Wow, that’s great. I’m so glad you liked it!

  • Avy

    wow…it felt like I am reading my own life story !!! Even though you and me come from a different part of the country(me coming from Atlanta) I can completely relate to each and every word here..especially “I just love living in the city!” 🙂 that’s it that is the reason why you me and many other 20 something end up in NYC or SFO for that matter.

    • Shannon_ReadyForZero

      That’s awesome, I love that you related to this so much! It’s so true that if you love living in the city then that trumps all the difficulties involved.