Cost of city living: Suburbanites have nearly 4x more in their savings accounts than city dwellers

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In a Nutshell

A Credit Karma survey finds that those living in suburban areas are far ahead of their city-living counterparts when it comes to savings.
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Living in a city may mean you’re trading your rainy day funds for skyline views. 

A Credit Karma/Qualtrics survey of 1,022 American adults  found that people who live in urban areas report having a median of $1,000 in their savings accounts. Those in suburban areas, however, report having nearly four times as much in their savings accounts — a median of $3,600. (Learn about our methodology.)

The higher cost of necessities could be leaving city dwellers with little wiggle room in their budgets to save. Our survey found 57% of urban respondents’ monthly income goes toward essentials like rent, food and utilities, while nearly half (47%) of those living in cities have or have had student loan debt.   

Sacrificing savings to live in the city may seem OK in the short term, but city dwellers may be less financially secure in the long run as they head toward retirement. Our survey shows just 29% of people in cities report having 401(k) retirement accounts, compared with 40% of those in the suburbs.

So is it time to pack up and move outside city lines? Not quite. We have some tips below that can help if you’re feeling the financial strain of city life. But first, let’s take a look at some of the reasons city dwellers may have less room in their budgets to save compared with those in the suburbs.

Key survey findings

Respondents who live in cities have a median $1,000 in their savings accounts compared with $3,600 for those in suburban areas.
City dwellers report having a median $500 in their checking accounts compared with $1,000 for suburbanites.
While 40% of suburbanites have a 401(k), just 29% of city dwellers do.
The top financial goal for urban respondents is to become financially stable (51%), while suburbanites say their top financial goal is to grow their savings or investments (46%).
People in cities are more likely to say their top reason for moving in with a roommate would be to keep rent costs down (63%) compared to people in the suburbs (44%).

Static wages and a rising cost of living are a drag on city living 

It’s no secret that wages haven’t kept up with the rising costs of living. According to the Bureau of Labor Statistics, between 2013 and 2017, average income before taxes rose 15%, but expenses increased by around 17.5%. 

Our survey shows that city dwellers in particular might be feeling the pressure of slow wage growth and the high cost of living: 22% said they believe their income is “very low” for the area they live, compared with just 13% of suburbanites. What’s more, 20% of city dwellers say they spend more than they make most months, and the top financial goal cited among urbanites (51%) was to become financially stable. 

The cost of living can be high in cities compared with the suburbs, according to our survey findings. The table below shows some examples of where survey respondents report spending most of their money.

Percentage of take-home pay spent per month

Essentials (food, utilities)28.4%26.6%
Non-mortgage debts14.1%15.8%
Other expenses10%13%


But it’s not just the overall cost of living that’s leaving people in cities feeling the pinch. People in cities report spending more on housing than those living in the suburbs — almost one-third of their monthly pay (28.6%) compared with less than one quarter (24.2%) — and to spend the largest share of their income on housing.

Cheapest states to live in

And the cost of housing may drive city dwellers to move in with others at a higher rate. Among respondents who said they’d move in with a roommate, 63% of city dwellers said lowering their costs would be the top reason for doing it, compared with just 44% of those living in the suburbs.

Student loan debt hits city dwellers particularly hard

Student loan debt is a concern for many Americans no matter where they live. According to Federal Reserve Bank of New York data, in the first quarter of 2019 student loan debt climbed to $1.49 trillion. In June 2019, Credit Karma members with student loans had an average student loan debt balance of $36,140, according to TransUnion credit reports.

A higher rate of student loan debt among people in cities could be hindering their ability to save. Our survey found 47% of urbanites currently have or in the past held student loan debt, compared with 39% of those living in the suburbs.

A 2019 Freddie Mac survey found that student loan considerations can have a big impact on people’s housing decisions. That survey found 51% of millennial renters had to make a different housing choice because of their student loans, while over half of workers employed in the essential workforce — think healthcare, education and law enforcement — had to make housing decisions with student loan obligations in mind.

But with fewer affordable housing options in urban areas, city residents could be left with no choice but to dedicate large portions of their paychecks to rent and student loans, with only a bit left over for savings.

Younger generations have a higher tolerance for expensive housing — and shared spaces

The younger the generation, the more willing its members are to spend and share in order to afford housing, our survey found.

Gen Z respondents, in particular, said they’d be willing to spend nearly half (49%) of their paycheck on rent or mortgage if they had to. Millennials were close behind at 45% of their paycheck. But Gen X respondents and older said about a third of their paycheck (36%) is as high as they’d be willing to go.

What’s more, nearly one-third of Gen Z respondents said they’d consider moving in with someone they didn’t know, compared with just 17% of millennials. The reason? Nearly half (45%) of Gen Z respondents said they would do it to make their rent more affordable.

With younger generations increasingly moving to urban areas and housing costs trending higher, millennials and those in Gen Z could very well see a larger portion of their pay going to housing — and it seems they’ve already started adjusting their expectations and strategies accordingly.

Saving in the city: How to live your best life while planning for the future

Based on our survey results, it’s clear that managing to save is a struggle for many people, especially if they’re living in cities. If that describes your situation, we have some tips to help you budget and work on your savings:  

Know thyself (and thy budget)

Be honest with yourself about how much you can afford and stick to that. The U.S. Census Bureau recommends spending no more than 30% of your monthly income on rent. As a starting point, if you’re looking for housing, do the math and see what 30% can get you.

If your ideal area or apartment puts you over that threshold, ask yourself what you can tolerate and what you’re willing to compromise when it comes to your living situation. For example, are you willing to live with multiple roommates if it means saving a couple of hundred dollars a month? 

Get creative and have an open mind

Although living with other people may not be everyone’s preference, it can be a way to help lower your housing costs. You could also consider getting a side gig to help supplement your living costs. A quarter of all city dwellers surveyed said one of their financial goals included getting additional sources of revenue. Adding to your total income each month could make it easier to put away some savings.

Don’t forget to prioritize future you

You don’t have to have a 401(k), stocks or a trust fund to become a saver. All it takes is setting aside any amount — no matter how small — each month in a savings account. Think about a percentage or a dollar amount you can spare from each paycheck and put it into the account. Over time, compound interest can help your money grow more quickly.


On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in June 2019 of 1,022 Americans aged 18 and up to learn about savings and spending habits in urban areas vs. suburban areas. We also studied the generational differences among responses. To calculate the average student loan debt balance among Credit Karma members, we analyzed, in aggregate, the total student loan debt held by U.S. members as shown on their June 2019 TransUnion credit reports and divided that amount by the total number of U.S. Credit Karma members with student loans reported on their TransUnion credit reports for the same month.

Compare the cost of living in two cities

Our cost-of-living calculator can help you see how much it’ll cost to live somewhere new compared to your current city so you can make an informed decision about your finances.

About the author: Paris Ward is a content strategist at Credit Karma, providing readers with the latest news that will aid their financial progress. She has more than a decade of experience as a writer and editor and holds a bachelor’s… Read more.