I moved to London at the age of 18 to study, and 12 years later, I’m still here. I grew up in Southwest England where the cost of living is lower, but where wages are also quite low. When talking to my childhood friends, the cost of living comes up frequently. I hear something along the lines of, “How can you afford to go abroad so often?” and “I don’t think I could ever afford to live in London.”
One time, I decided to ask about what their regular expenses look like, and what I didn’t realize is that by living in London, I pay less for my water bills. Every month, I split the cost of my $40 water bill with my one flatmate (who is also my sister and yes, I know I’m lucky to have that luxury), and I only recently found out that my friends living in the town where I grew up pay about six times that. It got me thinking about the debate in the personal finance community about whether it’s better to live in a low-cost or high-cost of living area. The cost of water is one expense, but what about the differences in rent, groceries, commuting, entertainment, and clothing?
After more than a decade living here, I’ve found a good balance of making the most of this great city whilst spending a modest $1,800 a month. Here’s how I do it.
1. Enjoying activities that cost $20 or less
I enjoy hosting dinner parties, whether they’re at my place or a friend’s. I’m at an age where most of my friends live with their partners, so I offer to cook at their place when I can’t fit everyone at mine. I have not been turned down once when making the offer. I still eat out with friends and family, but it’s always a planned occasion, and I don’t go more than twice a month. I also stopped drinking alcohol four years ago for health and social reasons, which keeps entertaining costs down and decreases the chance I’ll need an Uber to take me home.
I have plenty of hobbies, which include writing, tennis umpiring, running, yoga, cooking, reading, and learning languages. Aside from paying $100 a month for language lessons, my other hobbies are cost-neutral or cost-positive (I earn money), and they contribute to my overall physical and mental well-being.
2. Keeping shopping costs low
I go shopping with a list, whether it’s for groceries, toiletries, household items, clothes, or travel. I rarely buy anything not on that list and, for things I buy online, I often keep items in my basket for a week before purchasing. Usually, I end up deleting those items from my basket a week later when the initial desire to purchase has faded. Shopping isn’t an interest or a hobby for me. It’s about being intentional and getting what I need at the right time.
The grocery stores that I go to are identical to the ones in the town where I grew up, so the prices are also the same. The big difference is that I can access more international ingredients in London, so there are no restrictions on my experimental cooking.
3. Maximizing income opportunities
The majority of city dwellers move to a city to gain access to a wider range of work opportunities, and we would be lying if we said the higher salary didn’t also persuade us. Whilst I have a transferable role in communications (almost every corporation with 1000+ employees has my role), there are next to no roles where I grew up that wouldn’t be a step down both in terms of responsibility and pay.
I earn a small income from my online writing, which I could do from anywhere, but there are other opportunities that are available in London that aren’t great outside of the city, including tennis umpiring, working as an extra on TV or film and volunteering.
4. Minimizing ownership of high maintenance items
I rent my flat. This is always a hot topic amongst my peers. Is it better to rent or buy a property? Well, I think it’s not as simple as that. I think there’s so much societal pressure that we can rush into buying without really analyzing whether it’s optimal for our circumstances. I’m not anti-house, and spent nearly a decade saving up a down payment, but tying up that much capital in a home doesn’t agree with me. As a renter, I can move if my neighbors become a nightmare. I can also outsource any maintenance issues to my amazing landlord.
I also don’t own a car. I walk or take cheap public transport (buses). Living outside of cities often encourages us to own a car, so being city-based means I can make the most of a great public transport system. Owning a car is convenient and means trips require less planning, but the costs of keeping one don’t make sense when I can use public transport without all the added costs. We’ve moved from an ownership economy to the sharing economy, and the benefits are endless: less clutter, fewer burdens, increased mobility, reduced impact on the environment, and greater savings.
Am I really better off in the city?
The conclusion I’ve come to is that as someone who enjoys frugal living, it makes sense to live in a city where I may pay a bit more for rent, but where I can be close to my friends, cool opportunities, international airports, and fun and free activities, whilst earning a high enough income to save at least 50% every month. It’s also another reminder that focussing on ways to lower your expenses gives you more freedom and the choice to live where you want to.
Maureen writes on personal finance for millennials. In 2017, she released her first book: Your Money, Your 20s. Since releasing her book, she has written several online courses on money management and investing. She is a big fan of index funds and started investing in the stock market aged 22. Since then she has invested in peer-to-peer lending, renewable energy, and crowdcube businesses. You can read more of her work at The Life-Life Balance.
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