Rural Americans Spend More Money to Live Than Those Who Live in Urban Areas

By: Ben Campbell | Published: Jan 27, 2024

With the current state of inflation affecting life in cities across the U.S., many can’t help but fantasize about escaping to rural America to live a slower and cheaper life.

Yet, according to a report from Newsweek, living in a city may be cheaper than once thought, with some economists arguing that it’s more expensive to reside in the nation’s rural communities.

Cheap Life in the Suburbs

According to financial experts at Newsweek, U.S. citizens living just outside the nation’s major cities likely spend less than those in rural areas.

Condensed houses sit side by side in a small suburb in East Auckland, New Zealand

Source: Dean Purcell/Getty Images

The experts surmise those with lower incomes spend less in the suburbs as they save on transportation, groceries, and even property taxes.

It All Comes Down to Spending Habits

Alex Beene, a financial literacy instructor, joined Newsweek for an interview to speak on the issue. “The common perception is city life is vastly more expensive than living in rural areas, but I think it’s a wrong one,” he said (via MSN).

A blonde-haired woman pays for her meal with a credit card

Source: Freepik

Alex continued, “Ultimately, it comes down to the individual and their spending habits.”

Getting by Living in the City

According to one financial consultant, Paul Walker, it’s much easier to survive on a low income in a city than in rural areas.

Man dressed in a back jacket walks through a city park wearing sunglasses

Source: Freepik

“While housing is more expensive, you do not need a car, find produce markets that are less expensive than traditional grocery stores, and there are more opportunities to find jobs,” he said.

Better off in LA or New York

As inflation continues to affect the lives of daily Americans, financial experts such as Beene and Walker argue living just outside of Los Angeles or New York can be cheaper than living rurally.

Photograph of Los Angeles skyline as the sun goes down

Source: Mario Tama/Getty Images

Their opinion is shared by Marguerita Cheng, CEO of Blue Ocean Global Health. He argues that U.S. citizens can save thousands of dollars annually by living close to cities.

Bills Begin to Add Up

Cheng said those living in rural areas almost always need a vehicle. Transportation costs alone exceed $12,000 a year for Americans, including bills such as insurance and gas. Yet, city residents seldom require cars.

Woman sits at her kitchen table as she reads over a recent bill

Source: Freepik

The CEO finished up his interview with Newsweek by saying, “My advice is that you don’t want to move so far out that you end up even spending more money and sacrificing your quality of life.”


Inflation Hits Harder in Rural Areas

Research published by Iowa State University says that those living in rural areas are at greater risk of experiencing the effects of inflation than those in the city.

A birdseye view of a large rural region surrounded by tiny homes and lakes

Source: Freepik

In a paper published in 2020, the team said lower incomes and the increased cost of goods due to inflation hit rural areas harder (via MSN).


Rural Earnings Increase but Can’t Keep Up with Inflation

One portion of the university paper says that even though rural earnings increased by nearly 45%, they couldn’t keep up with inflation.

A farmer pictured working his field in a tractor at dusk

Source: Freepik

“Rural earnings, especially from farm sources, also rose rapidly by 43% but were unable to keep pace with inflation. The net effect cut rural discretionary incomes by 33.5% between January 2020 and December 2022,” the university wrote.


Prices Skyrocket in Rural Regions

Financial adviser Chrispoter Hensley argues that living in rural regions can cost thousands more than people initially expect.

A small stone home is pictured in a rural part of America surrounded by lush greenery

Source: Freepik

“When you factor in moving expenses, utility deposits, potentially buying a vehicle for rural living, higher fuel costs, property taxes, and even a slight uptick in grocery bills due to fewer options in rural areas, a reasonable estimate for the total cost of such a move would be in the range of $11,000 to $32,000,” Hensley told Newsweek.


Benefits of the City Life

A popular TikTok account, @Footwashingchrist, said that living in Los Angeles during his 20s helped him scrape by even though he earned less than $13,000 annually.

TikToker @Footwashingchrist, during one of his most recent uploads

Source: @Footwashingchrist/TikTok

While Los Angeles is notoriously known as being an expensive city to live in, Footwashingchrist said in one TikTok, “Because it was in the city, it’s easier to get by.”


Cities Create More Opportunities

According to the TikToker, he survived in the city even though he made tens of thousands of dollars less than average Americans for a few reasons.

A small bedroom pictured in a shared house in an American city

Source: Freepik

 Above all else, he said, “There’s more opportunities for rent.” He continued, “You get more ability to do weird living situations,” speaking in reference to his time living in a 6-by-7-foot room.


Cities Have Everything You Need

According to another financial expert, Zack Hellman, cities provide better services, reducing the amount of money residents need to spend.

Photograph of a train as it passes by in the heart of a large city full of skyscrapers

Source: Freepik

“Cities also tend to have more job opportunities, particularly in various industries, and a higher density of social services and community programs that can assist those in financial need,” he said (via MSN).