If you want to live as cheaply as possible, you are not going to live in the big city.
According to the cost of living index produced by the nonprofit Council for Community and Economic Research, the most expensive metropolis in the country is Manhattan (population: 1.6 million), where the cost of living is 127.1 percent above the average, followed by Brooklyn, N.Y. (71.4 percent over) and Honolulu (71 percent over). The least expensive city has, as anyone might have guessed, fewer residents: Harlingen, Texas (population: 64,849), which is 18.2 percent below the average cost of living.
So if you're living among the skyscrapers, unless you have extremely deep pockets, you are going to have to do some serious budgeting. Otherwise, you might get used to the idea that not far in your future is a train or plane ticket right back to where you started. Here are some budgeting strategies that might help.
Do your homework before moving. If you haven't yet packed your bags and signed a lease, start estimating what your budget might be, urges Leslie Tayne, a financial attorney and debt specialist who runs the Tayne Law Group, P.C., in New York City.
"Do some research in advance so you know approximately where you will financially stand in terms of groceries, utilities, rent and transportation," Tayne says. She adds that you'd also be wise to stock up your savings account in case the move is more expensive than you planned.
Decide you don't mind being inconvenienced. Some cities have plenty of inconveniences already, like traffic and those higher prices, but Jeffrey Lamoureux, a 25-year-old who works in public relations and recently moved from Washington, D.C., to Chicago, says he and his girlfriend, Angela Kim, 27, are "saving on rent by living in an older building that is farther from public transport."
They're nonetheless paying $995 a month for a two-bedroom apartment, and when they get another bed, they plan to occasionally rent out one room. They need to save where they can, because like many twentysomething couples, they aren't yet raking in the dough. Lamoureux, an independent contractor, makes $36,000 a year before taxes, and Kim, in graduate school, makes about $15,000 annually waiting tables.
They don't have a car and ride bicycles everywhere they can. Not a bad idea, considering that AAA's 2013 Your Driving Costs study shows that the cost of owning a car ranges from $7,000 to more than $11,000 a year for the average American, which includes everything from insurance and gas to finance charges on a loan.
And parking in a big city can really do some damage to a bank account. Colliers International, a real estate company headquartered in Seattle, conducted a study two years ago that showed the median monthly parking cost for a Chicago resident was $289. In New York, the median cost was $541 a month. But it could be worse: Colliers found that Londoners typically spent $1,084 to park their cars, the highest-priced city in the world when it comes to parking.
Avoid the nightlife. Hannah Hupp, a 23-year-old account manager, says she and her boyfriend, Cory Cain, 24, a senior research analyst, moved to Chicago respectively in 2012 and 2013 and quickly decided that while they enjoy going out to the occasional bar and restaurant, it wouldn't become a habit.
"We prefer to spend the bulk of our fun money on experiences instead of two and more nights a week at the bars and clubs," Hupp says.
The couple pays $1,050 for a 250-square-foot studio apartment and makes a combined income just shy of $100,000. Instead of spending on nightlife, they steer their money toward things like weekend trips to nearby cities including Milwaukee and Louisville, Ky. They both ran in the Chicago Marathon (entry fee for Americans: $175), and they are planning a trip to Peru. Hupp says it would be much harder to do all of this if they frequented bars and clubs.
She has a point. According to Expatistan.com, a website that allows expats to compare the cost of living between cities, the average price of a solitary cocktail in a downtown club in Chicago is $11. For comparison's sake, in Los Angeles, it's $12, and in New York City, $14.
Skip the restaurants, too. Lamoureux says he and his girlfriend avoid restaurants as much as possible, as well as pricier grocery stores. "We buy our produce almost exclusively from what is essentially a seconds market, where prices are at a significant markdown but with reduced shelf life."
[Read: 5 Smart Ways to Save on Groceries.]
Don't live large. Lamoureux and his girlfriend lack an air-conditioner – when you're paying $165 a month on student loans, you tend to want to scale back – and they went without a TV for awhile, too, but have since splurged, paying $72 a month for cable.
"Very little furniture in our place for the moment," Lamoureux says. "We're embracing minimalism in the home."
Look for the free stuff. Most cities have experiences and events that don't cost much, says Jean Towell, manager for TheMintGrad.org, a website aimed at helping millennials and recent graduates with their finances.
"Many museums and cultural attractions offer free or discounted admissions on certain days of the week," Towell says, and she adds that especially during the warmer months, many cities have a full schedule of "free or very cheap concerts, performances and fairs."
Of course, anyone in the suburbs or countryside might start wondering why people live in the city. No air-conditioning? Spending a fortune on what feels like a few square feet? No meals or drinks out?
But there is an undeniable energy that many cities have, as well as numerous career opportunities, and of course, everyone's financial situation is different. Some people have to live lean to survive and grow their bank accounts; others can partake more in what cities have to offer.
Hupp says she and her boyfriend aim to pack lunches every day instead of shelling out more than $10 for lunch, because saving that money frees them up to do the expensive outings that crop up later. Living in the big city, like anywhere, is all about choices, and Hupp and Cain – who are already working on building their savings accounts, retirement funds and IRAs – are trying to make good ones.
"Many people don't understand why we don't want to go out for drinks every night of the week," Hupp says, "but as cliché as it is, we say, 'We are living like others are not today, so that we can live like they are not, later.'"