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Urban Americans seem to love living in the city, but doing so is taking a big toll on their wallets and pocketbooks, especially compared to suburban Americans.

That’s the takeaway from a new study laying out all the financial side effects of an urban lifestyle — and the outlook is worse than any young city dweller might imagine.

According to Credit Karma, Americans living in suburban areas have nearly four times more in savings than their city-dwelling counterparts. The study also notes the median amount of savings for people living in U.S. cities is $1,000, compared to $3,600 for individuals roughly the same age who reside in the suburbs.

That’s not all — not by a long shot. City dwellers also fare poorly in the following personal financial areas, according to the study:

— Rising levels of student loan debt, combined with the higher cost of living in cities, is curbing city residents’ financial power — 47% of urbanites report currently and/or previously having student loan debt.
— Urban residents report having a median $500 in their checking accounts compared with $1,000 for suburbanites.
— 40% of suburbanites have a 401(k), compared to 29% of city dwellers.
— City residents also seem to be on a different path than suburban residents. According to Credit Karma, 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%).
— 63% of urban dwellers say their top reason for moving in with a roommate would be to keep rent costs down, compared to 44% of suburbanites.
— 57% of urban residents’ monthly income goes toward essentials like rent, food, and utilities.

Cost of living taking its toll on city dwellers

It’s not exactly a secret that it costs more to live in a big city than your average suburb, but when you match dollar amounts against city living costs, the problem grows more pervasive.

“The cost of living is obviously extreme in New York City, for example, but it applies to all urban areas and a major reason why urban Americans fall behind financially,” says James McGrath, co-founder of Yoreevo, a New York City-based real estate brokerage firm.

Overall, the federal government recommends spending no more than 30% of your income on housing costs, but it’s not uncommon for New York City residents to spend over 50%.

“That doesn’t leave much room to build up your savings, especially if you plan on taking advantage of everything the city has to offer,” McGrath notes. “In fact, we often see people leave the city when they have kids because the cost of living in New York goes from high to impossible. When you factor in the larger apartment, the nanny, private schools, and grocery bill, to name a few, the costs explode.”

While costs do add up with city living, some Americans are OK paying the extra freight to be near the amenities and attractions an urban lifestyle provides.

“Currently, my family lives in downtown Dallas in an apartment that costs more than $2,000 a month,” says Becky Beach, a financial blogger at Mom Beach LLC, in Arlington, Texas. “It can be hard on our budget to live here, but I like having a short commute to work and my husband works only a block away.”

Beach says she doesn’t own a car (although her husband does even though he rarely uses it), but city living takes away the need for auto ownership expenses.

“Everything we need is in downtown Dallas within walking distance,” she says. “Groceries can be quite expensive here, as well as our other living expenses. But we save money by buying groceries online with Amazon and use my Instant Pot (a multi-meal cooking kitchen appliance) to save money.”

“Consequently, we really don’t have to drive and waste time in a car,” she says. “There is a vibrant nightlife here and always something to do nearby.”

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Taxes an issue

Another reason so many Americans pay more for urban living is that city governments literally charge them more to do so, primarily via a bigger tax burden and higher home and family care costs.

“One of the primary reasons it costs more to live in a city is higher property taxes,” says Chane Steiner, chief executive officer at Crediful, a personal finance platform based in Scottsdale, Arizona. “Housing and child care not only cost more in urban areas but increase in cost at a higher rate than suburban areas.”

Steiner says that many people are willing to accept the additional cost, or cities wouldn’t be so densely populated. “It’s important to remember that cities offer higher wages and most places people need or want to go from their city are easily accessible using public transportation.”

To escape high property taxes, Steiner says he’s seeing more and more people, especially younger ones weighed down by student loan debt, opting for a time-honored tradition — buy in the suburbs and work in the city.

“Some people go for the best of both worlds, taking advantage of lower suburban living costs and higher city wages by commuting for work,” he says. “For example, in Chicago, most people have property tax rates which exceed 2% of their income. Yet people just 25 miles to the southeast in suburban northwest Indiana pay less than half that.”

Good financial tips to curb urban living expenses

If you live in the city and love it, even if you are struggling financially, there are some action steps you can take to cut the cost of the urban lifestyle. Experts advise cutting those costs with these tips:

Get a roommate. If you have the room, getting a roommate is a great money saver, says Jerry Brown, founder of the personal financial website Peerless Money Mentor. “If you can do it, getting a roommate can cut your living costs substantially, as rent is one of your largest expenditures,” he says.

Ditch the wheels. Having a vehicle living in the city is asking for financial trouble. Tickets, finding a garage, and higher insurance costs add to the price of owning a car in heavily populated urban areas. “Furthermore, since most downtown areas have parking fees, this is another expense that could possibly drain someone’s budget if they have a car,” says Brown.

Join a nonprofit savings program. Having a bank in the city is an obvious necessity, Brown says. But you can earn some leverage by joining a credit union or nonprofit, which usually offer better deals on rates and fees to get your business. Often, smaller financial institutions will also have a good digital presence, to better appeal to younger financial consumers who want to do business with community businesses.

Go low or go free as you can. “While you’re in the city, the best way to save money is to take advantage of all of the free services you can get, says Shane Sherman, CEO of TechLoris in Mishawaka, Indiana, and a former urban dweller. “Public transportation, free entertainment in the form of public shows and things like that. While urban living suits you, there’s no reason to spend money where you don’t have to.”

Scour your monthly bills. If moving isn’t in the cards, you can review your subscriptions and long-term plans. “Whether internet, cable, phone, electricity, natural gas, streaming services and magazine subscriptions; think of all of the opportunities you have at home to save money,” says Matthias Alleckna, an energy analyst at, a price comparison website that helps consumers find low-cost rates for electricity and gas. “Find out how you can switch providers, plans, and secure lower costs.”

Reviewing, comparing, and switching are three verbs that are essential to any city dweller with many monthly bills to pay, Alleckna says. “It sounds comfortable to stay signed up with the same companies for years, but it can also drain a lot of your money.”

Resist temptation. Across the urban landscape, temptation seems to be everywhere, as much a part of the city vibe as subways and skyscrapers.

“You have to remember that living in a large city means often paying more for certain products,” says Liz Jeneault, vice president of marketing at Faveable, a resident of Philadelphia, and a former resident of New York City. “For example, I live a pretty good distance away from any of the large grocery stores in Philadelphia. That means I often fill in the gaps by shopping at local markets or stopping by a store like CVS. The only problem is, those markets and drugstores often charge more than what your typical box store would.”

Another reason people tend to spend more money when they live in a large city is because you walk by countless shops, restaurants, and stores each day. “When you live in suburbia, you might not even leave your neighborhood on any given day,” she says. “I can’t walk outside of my apartment without being tempted by the sweet aroma of a coffee shop, for example. There’s a Macy’s around the block. In winter, mini Christmas shops selling hot cocoa seem to pop up out of nowhere. There’s lots of temptation in the city.”

Stay, play, and make it all work

Yes, where you live is your own unique choice and for your own unique circumstances.

That said, if you are somewhat strapped for cash but want to live in the city, there are ways to get the job done and have that apartment or home in the city.

“For some people,city living is a benefit,” says Sherman. “When I was starting out, it helped to be in the thick of things. Someone working their way up can benefit from being close to where everything is happening. When being available is more important than having extra space or extra money city living is the way to go.”

He continues, “As long as you feel like it’s necessary, or it makes you happy, stay in the city.”