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7 Financial Pros and Cons of Living in a Big City



If you’re feeling the call of big city living, it’s easy to glamorize what your life may be like. You’ll find your dream job and spend every night out with your exotic new friends exploring that city’s abundant arts, culture and entertainment options.

The best part about your fantasy is that this dream life could actually happen, since large cities offer plenty of opportunities that don’t exist in a small town. On the other hand, life could be much different than you imagined, mainly due to financial adversity.

For example, you might underestimate the cost of city living and be too broke to party with your friends because you can barely make the rent or mortgage payment each month. Things don’t have to turn out that way, though.

Before you pack your car or settle into a seat on a Greyhound bus bound for San Francisco, click or swipe for seven financial pros and cons of life in the big city.

1. Pro: You may not need a car

Owning a vehicle is expensive – averaging $9,282 annually – according to AAA. That’s because owning a car comes with more annual costs than just the monthly payment. You also have to pay for licenses, taxes and registration fees, auto insurance, fuel cost, along with maintenance and repairs.

If you live in New York, Chicago, Washington, D.C., Boston or another large city with expansive mass transit, however, you may be able to skip car ownership altogether and put that money you’d have otherwise spent in savings, as part of a down payment on a house or in your kid’s college fund.

2. Con: Higher auto insurance premiums

If you do need a car, congested city living translates to a higher risk of traffic accidents, which means that auto insurance rates are typically higher in a large city compared to rates in less populated cities or towns. So how much more could you pay for auto insurance in a large city?

For a 30-year-old man with excellent credit and no accidents or DUIs, the average annual rate for auto insurance in Miami, Florida, is around $2,513, according to personal finance site ValuePenguin. That’s nearly $1,000 higher than the Florida annual average of $1,589.

3. Pro: More job opportunities

In a city packed with all kinds of industries, businesses and educational options, if you search diligently and work hard, you can probably find a job you like – or even love.

People who live in large cities find much better employment options in mid-to-large cities than those offered in small towns in rural America, according to the Federal Reserve.

4. Con: Higher cost of living

One thing you can almost always count on if you want to live in a large city is a higher cost of living, the overall cost for things like housing, groceries, health care and other expenses.

For example, the cost of living in New York City is 87% higher than the national average, according to Sperling’s Best Places. San Francisco, California cost of living is a whopping 169% higher than the U.S. average. Seattle, Washington, also has a cost of living ranking significantly higher (72%) than the national average.

5. Pro: Bountiful dining options

In a large city, there’s no shortage of restaurants, ranging in price from cheap to crazy expensive. Dining out is typically more expensive in a large city, but the variety of dining options means you can also find dozens of restaurants and food stands with lunch or dinner specials to help stretch your paycheck.

6. Con: Higher crime rates

Not every city has a high crime rate but you can probably count on a big city having a higher crime rate than a small town in Wisconsin or a smaller city in another state.

Higher crime costs more than just your peace of mind, too. Cities with high crime rates generally have higher auto insurance rates due to higher risk of theft, burglaries and vandalism, according to auto insurance resource QuoteWizard.

7. Pro: Better airports

If you love to travel or must fly for business, you can’t beat the offerings of a big-city international airport. With numerous airlines and plenty of nonstop flights available, you can save money on airfare when you fly out of a large city.

Living in a city with a great airport (or several) is a huge plus, since many small-town dwellers must drive an hour or longer to a large city to gain airport access to the same service and fares.

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