Many financially savvy people live in expensive places but still manage to save money and live a comfortable life. Here are five habits of savvy people in costly urban areas.
They Track Their Expenses
Financially people know how much money they spend, and exactly when and where they spend it. They track their expenses so that they can make informed decisions about where to cut to save money.
For example, utilities tend to be a significant expense in high-priced markets. Budget-minded people use resources like a free comparison done by TexasElectricityPlans to find the best deal possible to keep their expenses low.
Regular audits and tracking creates mindfulness around spending.
They Live Within Their Means
If you’re living in New York City or Los Angeles, you’ve already made it. Financially savvy people understand that and refuse to play the game of acting like they have more than they do. In other words, they live within their means.
Rather than just tracking where the money goes, frugally-minded people build a budget based upon their income. In many cases, this means having both fixed and variable categories for each expense that they categorize their income into, the moment it hits their account.
If you plan living in expensive markets, use a budgeting app like Mint to keep track of your bills and expenses. You should also look at implementing a money management system, like Dave Ramsay’s envelope system.
They Make Compromises
Sometimes you have to compromise to get what you want in a financially sustainable way. While you might dream of having a penthouse in Manhattan, settling for a quaint apartment in Brooklyn might be the only feasible way to live in New York City.
Living out of the core area is just one way to compromise. Other areas include walking or opting for public transportation rather than using cabs, getting a roommate (or ten) in a more desirable area, or using public wifi rather than paying for it at home.
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They Create Other Income Opportunities
Once upon a time, it was viewed as low brow to have multiple jobs. In the gig economy, it seems strange when someone doesn’t have a side hustle or other source of income.
Those seeking a financially independent lifestyle create other income opportunities for themselves outside of the traditional 9-5 job atmosphere. Whether it’s picking up a dog-walking gig on the weekends or creating a podcast about frugal living in a big city, an open mind and a healthy dose of hustle are a must.
They Know The Meaning of Value
There’s a big difference between cost and value; you need to find your own definition when living in expensive markets. For example, a genuine Stetson is worthy of the price tag and can be pretty tempting when living in Houston. However, what value will it bring to your life? Purchasing a $10 straw hat from the thrift store is far more practical.
Frugal spenders evaluate cost versus value for every purchase. When they make a significant investment, they’re "spending for life" rather than instant gratification.
Financially independent people also know the value of experiences over things. They refrain from spending on low-value items all the time so that they can have a few meaningful experiences without worrying about how to pay for it.
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They Make the City Their Playground
Whether you move to the windy city, the city that never sleeps, Beantown, there’s always something to see and do. In many cases, every weekend offers a variety of different free events to take part in. Financially savvy people take advantage of these events and save the spending for planned indulgences.
What if the expensive market in which you live isn’t a bustling metropolis? Find some affordable ways to make your own fun while staying in or stay abreast of community events. Regardless of the place you call home, look for deals and discounts, and plan around those rather than competing for something in high demand.
You can live in expensive markets by creating smart financial habits. Consider talking to a financial planner to help you set a budget and goals that suit your needs.
Image credit: living in expensive markets by Pixabay
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