Rural Americans can spend thousands more than people in cities

The cost of living in places like New York and Los Angeles might seem daunting, but it may actually be better to make a city your home if you’re poor.

With inflation at 3.1 percent, Americans are looking for any way to make their dollar stretch. And while the conventional wisdom is to stay away from major cities that have pricey rents and $20 cocktails, that advice is often wrong, financial experts have told Newsweek.

In fact, for those seeking to save money, it could cost thousands of dollars more more to live in a suburban area, according to Marguerita Cheng, a certified financial planner and the CEO of Blue Ocean Global Health.

Paying for transportation alone could force you to pay $12,000 extra due to the car payment, insurance and parking expenses you’ll incur. With monthly payments for even a used car coming in at least $500 a month and the average car insurance costing $2,634 a year, that’s already an extra $8,634 you’ll have to pay that you wouldn’t in the city.

Add on a pricey apartment parking rate and you’ll be spending around $3,600 more. That means for a person making a low income, it actually can be advantageous to live in the city.

“My advice is that you don’t want to move so far out that you end up even spending more money and sacrificing your quality of life,” Cheng told Newsweek.

These factors also apply, in part, to those living in rural areas—and that’s before you factor in the cost of moving itself.

According to financial advisor Christopher Hensley, the president and chief executive officer of Houston First Financial Group, this can cost thousands of dollars more.

“When you factor in moving expenses, utility deposits, potentially buying a vehicle for rural living, higher fuel costs, property taxes, and even a slight uptick in grocery bills due to fewer options in rural areas, a reasonable estimate for the total cost of such a move would be in the range of $11,000 to $32,000,” Hensley told Newsweek.

Newsweek illustration. People who live in rural areas will spend tens of thousands of dollars more than those who live in urban areas, financial professionals say.
Photo-illustration by Newsweek/Getty

Then there are the other benefits of city life compared with rural or suburban life for those on a low income. In a video on TikTok that has been viewed over 660,000 times, @Footwashingchrist outlined why, when he wasn’t earning much, there was much to be thankful for in Los Angeles, which has one of the highest costs of living in the country.

The content creator said in around 2010, during his early 20s, he brought in only $13,000 over the year. Despite such a low income, Footwashingchrist said, “Because it was in the city it’s easier to get by.”

He grew up in rural California, where people making $35,000 were also barely able to scrape by despite having tens of thousands of dollars more than him. He said there was one crucial reason why.

“There’s more opportunities for rent,” Footwashingchrist said. “You get more ability to do weird living situations.”

Urban Dwellers Have Unorthodox Lifestyles

This is because cities have far more buildings and people looking to put up with unorthodox living styles to make it by. He said he personally lived in a 6-by-7-foot loft.

“It was long enough for me to lay down and I could touch the walls,” the TikToker said, adding he paid just $200 a month to live in the small space in Los Angeles.

Meanwhile, in Footwashingchrist’s hometown, residents need to make three times their rent to even find an apartment.

Transportation is another huge issue. In towns where everything is spread out, you need a car. That’s not true in modern big cities. In Los Angeles, Footwashingchrist was able to walk to two separate jobs.

“I could walk to those jobs, and they were right next to each other,” Footwashingchrist said.

In addition to more public transit, it’s also easier to gain access to Social Security programs such as EBT and medical insurance if you qualify, he added.

Footwashingchrist is not the only one who believes that cities are the better option for low-income individuals today.

Being Poor Is Easier in a City

Paul Walker, a financial consultant at Fil Financial Corporation, said his experience shows being poor is much easier in a city. Walker originally grew up poor in the suburbs of Milwaukee before moving to San Francisco.

There, he found many advantages to city life, despite still being broke at the time.

“While housing is more expensive, you do not need a car, find produce markets that are less expensive than traditional grocery stores and there are more opportunities to find jobs,” Walker told Newsweek.

Walker said there’s also more educational opportunities so a person can learn their way out of poverty.

“As Ronald Reagan said, ‘the only sure way out of poverty is a job,'” Walker said. “So live where the jobs are. I have never met a wealthy cow.”

Syed Lateef, a real estate expert living in Chicago, echoed this sentiment.

“Honestly, it’s easier to be broke in US cities,” Lateef told Newsweek. “Generally, rural areas are declining, with many already facing economic downturns. Locals in these areas may not be particularly welcoming to individuals facing financial hardships, as they are often struggling to make ends meet themselves.”

Cities also have more rent options, despite having higher rent averages, meaning low-income residents could be less likely to priced out of a neighborhood where only buying a home is permitted by zoning laws.

“The common perception is city life is vastly more expensive than living in rural areas, but I think it’s a wrong one,” Tennessee-based financial literacy instructor Alex Beene said.

“Ultimately, it comes down to the individual and their spending habits. There are upticks in pricing on everyday items, dining, and entertainment when living in a city, but those increases are easily negated by the increase in average salaries jobs in cities provide. If you can’t get your daily spending under control, odds are you’re going to feel broke wherever you live.”

Cities Provide Better Transportation Options

While free or cheap public transit is a saving grace for those who cannot afford a car, cities also provide significant opportunities you wouldn’t find elsewhere. That includes jobs as well as tax incentives for low-income residents.

“Cities also tend to have more job opportunities, particularly in various industries, and a higher density of social services and community programs that can assist those in financial need,” Los Angeles-based Zack Hellman, the owner of Tax Prep Tech, told Newsweek.

Housing, on one hand, might be cheaper on average, but that won’t necessarily make it easier to buy your own car or find a high paying job, especially if you’re in a rural area.

According to Robert Persichitte, another certified financial planner in Arvada, Colorado, the suburbs quickly use up all your money no matter your income level.

“Suburbs are a slam dunk to be poor and wealthy,” Persichitte told Newsweek. “If you own in the suburbs most of your income will be tied up in a home and a car. But your home will usually appreciate in value and for most Americans is your biggest asset.”

Update, 01/11/23, 6:30 a.m. ET: This article was updated with comment from Christopher Hensley.

Uncommon Knowledge

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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

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