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Is staying debt-free in a city like New York or San Francisco possible? With the cost of living increasing, it’s a question many people are asking. What does it take to live in a high-cost city without racking up a life-changing debt? Is it even possible? The truth is that it is possible to live debt-free, even in some of the most expensive cities in the world. It all comes down to you, the budgets you set, and how creative you can be in meeting your needs. Do you think you have what it takes? Here are our 14 smartest moves to stay debt-free in an expensive city.
1. Consider a Side Hustle
What do you do for a side hustle? Other part-time income streams can help boost your budget when living in a high-cost city. Some of these side hustles include delivery driving and private-hire taxi services. However, it’s also possible to capitalize on other creative or artistic hobbies to bring in a little extra money for savings, emergencies, or enjoying the city you live in.
2. Get Into the Free Side of Living
The great thing about many high-cost cities is that they come with attractions and amenities. Some of these can cost a lot to enjoy, but many, like museums and galleries, are often free. While taking advantage of these free attractions and amenities, you can challenge yourself to “no-spend” weeks. Don’t spend on extras, but don’t compromise on the quality of your life. Substitute what you would spend money on for homemade replacements, like making your coffee at home.
3. Lean Into the Deals
Because high-cost cities are filled with businesses and attractions, many offer coupons and group deals that attract more clientele and guests. By taking advantage of the deals on offer or coupon services like Groupon, you can get involved in your city’s nightlife, entertainment, and community events without going into severe debt.
4. Pick the Right Location
You can go broke by trying to live outside your means in the “stylish” part of a high-cost city. You can avoid debt by picking a location better suited to your finances. That could mean compromising on things like living in areas with certain amenities. For example, if you live in Manhattan, moving to Brooklyn would immediately free up a significant portion of your budget. The trade-off may include a longer commute to work, but you can escape debt.
5. Fall In Love With Upcycling
Whether you rent or own your home in an expensive city, furnishing it can be a particularly tough challenge. Furniture is a costly investment and can put you in debt. Still, you don’t want to skip on making your home comfortable and safe. Upcycling used furniture is a great way to furnish your space and save money. Visiting flea markets, vintage shops, and charity stores for staple pieces can be a smart starting point.
6. Look into Creative Living
Even when you do cut the corners that you can, living in a high-cost city adds up. One way to cut costs is to look into more creative living solutions. For those in relationships, moving in with a significant other can cut the costs of rent or a mortgage in half. Likewise, getting a roommate or looking into communal living spaces can offer budget-friendly living solutions that allow you to save money.
7. Lower Your Transport Costs
Living in a city with a high cost of living can come with some benefits. One of these is (usually) convenient public transport links. Many of these cities are walkable, too, meaning it may be possible for you to live in the city without a car. Getting rid of your vehicle eliminates the cost of parking fees, taxes, and insurance. That can free up a sizeable portion of your budget and prevent significant debt.
8. Grapple With the Grocery Bill
Just like rent and transportation costs add up in the city, so does the grocery bill. If you’re serious about saving money and avoiding debt the smart way in an expensive city, this is a great place to cut costs. Clean up and organize your grocery bill. Make sure you’re getting the best price on what you’re buying, and consider going wholesale or supplementing with small trips to a local grocery store over big weekly shops.
9. Tap into the Locals-Only Program
High-cost cities like New York and London can’t run without the power of their locals. That’s why many of these cities offer locals-only discount programs, like this program from Santa Barbara. The idea is to encourage the locals to get out and engage with their city at a budget-friendly cost. These discounts can include free days out and hefty coupons on meals and attractions that might otherwise put locals into debt.
10. Avoid the Convenience Trap
Convenience traps are dangerous when you’re living in a high-cost city. These traps take the shape of apps and services that capitalize on your laziness. For delivering a pizza from that place down the block or picking up your dry cleaning, these services charge you a series of fees that add up over time. The best way to avoid this debt trap is to avoid using the services and opt for your own shopping and pick-ups.
11. Minimize the Sign UPS
When you move into an expensive city, the cost of things begins to add up quickly. One way to avoid debt and cut these costs is by avoiding bills that aren’t necessary. One example is avoiding a cable sign-up. Instead of paying a high monthly bill for cable service, you can invest in high-speed internet and a couple of cheaper entertainment subscriptions like Netflix or Apple TV.
12. Take Advantage of Walkability
Another great element of city living, even in a high-cost city, is the walkability. Most neighborhoods are laid out in a way where all necessary amenities are a short walk away. You can boost your mental and physical health by getting out and exploring the city on foot. It’s cheaper to enjoy yourself in a high-cost city without going into debt for a city lifestyle.
13. Be Selective About Entertainment
When you live in a busy city with attractions, there are so many events going on. Entertainment is a part of the lifestyle. Gigs, dinners, and drinks with friends are all part of the city lifestyle. However, going overboard with how much entertainment you spend on can put you into debt fast. It’s important not to do it all. Instead, limiting yourself to the entertainment that brings you the most joy and fulfillment is an intelligent way to strike a balance and avoid debt.
14. Make a Budget (And Stick to It)
If you truly want to stay debt-free in a high-cost city, it’s important to create realistic budgets that you can stick to. That takes time, and you must consider all the parts of your life that touch your wallet. What do you need to spend on food? Housing? What about extras like insurance and entertainment? How much income are you earning to cover those costs? Creating a realistic budget empowers you to make the wisest choices for your life in the city.
10 Practical Ways to Be Frugal Without Being Cheap
You can be frugal without being cheap by understanding the difference between price and value. A cheap person cares only about getting the lowest price. Frugal people look at price as one factor that determines value.
The Purpose of a Budget and 11 Reasons Why You Need One
The primary purpose of a budget is to track your income and expenses. A budget also ensures your bills are paid on time, helps you plan for the future, helps identify any bad spending habits or areas where you could reduce your spending, and ensures that your spending reflects your priorities. By creating a budget and sticking to it, you can ensure your needs are met, your bills are paid on time, you get out of debt, and you meet your financial goals.
