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The case for moving to a small city

Life in the big city can be exciting—and expensive. If you’re ready for a change of scenery, moving to a smaller city offers affordability and a better quality of life.

Businessman standing in the fast moving crowds of commuters. This is entirely 3D generated image.
Gremlin / Getty Images

It doesn’t take long after experiencing the bustle of big-city living to get tired of paying sky-high prices for everything from a tiny apartment to mediocre sushi. Ready for a reset? Moving to a smaller city offers you a (cheaper) do-over.

While relocating can be very freeing, it also comes with challenges. Preparing to move to a new city takes research. To help you prep, let’s run through the benefits of moving to a new city and how it can reboot your finances.

Lower cost of living

When you leave an urban center, the cost of living can drop significantly. In smaller cities, everything from housing to fuel to food often costs less. (Curb stomp that Uber bill!)  

Consider this: 

  • In Cincinnati, the average monthly cost of living in 2021 was ​​$1,226, while in Seattle, the monthly cost of living was nearly double at $2,438 per month, according to a survey. 
  • In Memphis, Tenn., the average monthly cost was $1,267, while Boston averaged $2,371 per month.

In a smaller city, it typically costs less to buy or rent a property, and you may get a lot of space for your money. 

After a decade in New York, I traded a 900-square-foot apartment for a 4-bedroom, 3-bedroom house a few hours north—and my mortgage payments were half of my previous rent.

Alli Romano

Depending on the city and state where you move, your taxes, including property, sales, and income taxes, could drop significantly. Auto and homeowners insurance can even cost less. All that means more cash in your pocket.

What would you do with an extra $1,000 per month? You could:

  • Start paying off your student loans and credit card debts.
  • Invest more in your 401(k).
  • Save up for a down payment on a condo or house.
  • Buy a new car.
  • Blow six months of savings on a Rolex (no judgment here).

Job opportunities

A new city—even a smaller one—can offer some enticing job opportunities. Many mid-sized- and small towns have worked hard to attract new businesses, and highly educated, skilled workers are in demand.

If you’re looking to start your own business, it may cost you less in a small city given lower rents and supply costs, and possible tax benefits, and chances are you’ll face less competition. For instance, if you’ve dreamed of opening a restaurant, you may have more success in Milwaukee or Tulsa, where one new spot can make a splash, compared to saturated markets like New York and San Francisco.

Lifestyle benefits

How do you decide where to live if you can live anywhere? That’s a great problem to have. Start by thinking about the lifestyle you want to live. Do you want a warm climate or access to the mountains? Do you want to be closer to family and friends? Do you want to try country living?

Since the onset of Covid, hordes of young urbanites moved to smaller cities to find space, quiet, and nature, and many of them have stayed put. I recently moved to Denver, where I can easily hit the slopes at world-class ski resorts, while my sister-in-law moved from the Midwest to Florida to be near the ocean. 

Tired of spending hours on mass transit or in the car? Smaller cities offer residential neighborhoods and nearby suburbs that make for short commutes. Even rural spots (hobby farm, anyone?) could be just a half-hour from downtown offices.

Of course, you might not be ready to leave everything behind. If you crave a walkable downtown and nightlife, many small cities have lively downtowns with restaurants, boutiques, galleries, and bars. Instead of your favorite professional sports, there is probably a minor league or college team to support. Pro tip: Tickets will be a lot less expensive!

Turning your move into a fresh financial start

Even under the best conditions, moving is stressful. You’re starting a new job while trying to make friends and find the best oat milk latte. The good news: When you move, you can rewrite your relationship with money. 

Budget for your move 

Even if you’re moving to a cheaper city, relocating is expensive. Start by making a moving expenses list. You’ll need to hire movers or rent a truck, buy boxes, bubble wrap, tape, and outfit your new home. The costs add up quickly. How much money you should have before relocating depends on your situation, but it’s smart to set a budget. You can probably move out with 10k or even less.  

How do you budget to move to a new city? Here are a few suggestions for creating a relocation budget:

  • If you’re moving for a job, ask if your relocation costs (which are taxable income, btw) are covered by your employer.
  • Use an online relocation cost calculator to estimate your expenses and create a relocation budget.
  • Start a moving expenses list on your phone or computer and update it regularly.
  • Find a relocation budget Excel template and use that to track costs.

Reorganize your finances

Moving is an opportunity to change your financial ways. Here’s a tip: When you move, start a new monthly budget and follow the 50-30-20 budget rule. Created by Sen. Elizabeth Warren, the idea is to divide your after-tax dollars into three buckets: 50% for needs, including housing, food, and transportation, 30% for wants, which could be eating out, cable TV, or a vacation, and 20% for savings or paying off debt. 

In an expensive city, you might find that the needs bucket gobbles up way more than 50% of your take-home pay. If your new city is less expensive, it will be easier to follow the 50-30-20 model and start living a more financially balanced life.  

Also, before you start unpacking, adopt new spending habits. Track your budget with a spreadsheet or app—or just keep a closer eye on cash flow. To encourage saving when I arrived in Denver, I opened a new savings account; now a portion of my salary automatically flows into that account. If your employer offers a 401(k), contribute to it. Set aside a monthly budget for “wants” like entertainment and eating out—and don’t break it!

Get moving

When you live and work in a big city, it can be easy to have tunnel vision. You work long hours, hit the town on nights and weekends, and repeat it all the next week. By moving to a smaller city, you’ll have more time—and money—to invest in yourself and your future.  This is a personal do-over, so take advantage.