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5 ways to save money while living in an expensive city

How to navigate life and budget in the city

This article is part of a broader series that aims to help you understand and improve your financial and credit health, presented by Chase Slate.

Make the most of your money.

Alexandria Bass, a school teacher, is a long way from the small town in Ohio where she grew up, but she couldn't be happier—even if she has a few more bills than before. "I love the opportunity, diversity, and active lifestyle here," says the San Jose, California transplant. "The cost of living and still being early in my career make it difficult to balance all of life's activities, but I absolutely adore the Bay Area," she says, adding: "I budget accordingly, to make it work."

For many millennials like Bass, moving to the big city may be the first step toward making their dreams come true. According to a recent survey, 73 percent of 25- to 34-year-olds with a college education live in large or mid-sized cities and while the desire for city living is increasing, remaining comfortable requires an increased salary and available savings to afford expenses such as rent, student loan payments, home costs and discretionary cash for a social life.

Allocating 30 percent of your salary for living expenses was once considered standard. However, with the median salary of college graduates 25 and older at $62,036, and major cities like San Francisco and New York commanding a median monthly rent of $3,590 and $3,340 for a one-bedroom apartment respectively, very little wiggle room is left for other expenses.

To maximize their budget, younger people intent on city living need to get cash-creative and resourceful. Here are some tips that should help:

aprtment building

Boost your apartment research game

"Budget-buster number one is housing, so I recommend starting there when trying to keep expenses in check," says personal finance expert and author, Stefanie O'Connell.

Getting a roommate, or two, to split costs with is obvious, but stay open minded when it comes to neighborhood. If you look outside the trendiest blocks in town — or are open to a commute into the city — you can find a great place that fits your budget. Remember, you won't live there forever, just until you get over the entry-level job hurdle.

woman in store

Become a strategic shopper

When it comes to finding affordable furniture, think outside the box. Look for items that have multi-functionality like a hanging pot rack or bed frames with drawers. This helps you save on space and money.

Also look for opportunities to buy home items at affordable prices — especially at yard sales and thrift shops. Bargain hunting requires patience, but the payoff can be worth it, says Jackie Lam, founder of a site dedicated to helping readers live frugally. 

woman in warehouse store

Warehouse your savings

Find out where your local warehouse clubs are, stock up, and split the cost with your roommates. Warehouse clubs are great places to buy meat, vegetables and other pantry staples that can be prepared at home and taken to work.

And don't forget, they sell more than food. You can find outerwear, clothing and electronics as well. 

two hands passing credit card

Keep tabs on your credit

Living in a new city will offer plenty of opportunities to spend, and putting it all on your credit card may seem like a great idea. But your credit score is used by everyone from landlords to determine if they should rent to you and potential employers can use it in the hiring process. Make sure you understand how credit works and why it's important to be mindful of debt.

group at table

Live your life according to you

It's all about maintaining a balanced perspective, advises O'Connell. "You can't afford everything, but you can afford anything," she says, adding: "Build your lifestyle around what matters most to you."

Take a hard look at where your money is going, and if, for example, you want to travel more, perhaps cutting back in other areas, like eating out, is a way to make that happen.

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