How to Budget for City Life on an Entry-Level Salary

So much to do! So much to see! So much to…spend on doing and seeing those things.

Cities are full of world-class museums, diverse food, secret spots, and endless entertainment. If only it were all offered for free. The truth is, living in the city can be expensive. Especially in your younger years, when a hefty portion of your entry-level salary goes to rent. But you’re not about to spend the days eating ramen on your floor when there’s a whole bustling world outside your door (unless you want to, of course). All it takes is some urban savvy and the right money mindset.

Make an actual budget.

If debit or credit cards are too tempting, go cash-only with your spending money so you know exactly how much you have budgeted.

First, it helps to have a system. Instead of simply trying to spend less (and then crossing your fingers as you check your bank statement), put a few guidelines in place that hold you accountable.

There’s no shortage of wallet-savvy resources out there. LearnVest, the finance brainchild of a Harvard Business School alum, advises a 50/20/30 rule (50% of your paycheck goes to fixed costs, 20% to debt or savings, and 30% for flexible costs). Prefer something digital? Download the Mint app, which can categorize all your spending so you know where you’re on-track and where you may need to cut back.

Or, there’s always the old-school envelope rule: Label envelopes for rent, groceries, entertainment, or whatever you want, and fill each with a certain amount of cash. Once the cash runs out, you’ve hit your budget for that month. It may be old-fashioned, but it can be pretty effective when you’re deciding between cooking or ordering Seamless and see that you only have $20 left in your food budget.

Look beyond the sticker price of rent.

Rent is climbing, making us want to just pick the lowest number we find on Craigslist. But there are a ton of other costs to consider. Look at direct costs, like utilities, laundry, public transit access, and parking (but you know the solution to that).

Then, look at the indirect costs: Is it close to a grocery store—and does it have sufficient food storage and cooking spaces—or are you gonna be ordering Seamless when the fridge gets low and you don’t have enough counter space? Does it have a gym, or will you need to go elsewhere? Is it somewhere you'll enjoy spending a Saturday, or are you going to cough up for fancy brunch just to get outside? Is it a place you actually want to live, so you don’t end up packing up and moving out sooner than hoped (which leads to extraneous moving costs)? Sometimes, $200 more in the base rent actually levels out to be a better deal. 

Buy a monthly transit pass—and use it.

You already know that owning a car in the city is a surefire money drain. Parking runs at over $100 per month in many buildings, with gas, insurance, and maintenance adding to the bill. Instead, befriend your local transit system. Sure, the bus may take a little longer than driving, but when you realize you can just tune out to a podcast and gaze out the window, you’ll be hooked. Most cities offer a fixed-rate monthly pass that’ll give you unlimited transit rides. Not only will this save you money per ride, but it’ll make it easier to not spend money on ride-sharing.

Yes, it’s tempting to spend more on a ride home just because it’s drizzling out—but those dollars add up quickly, and could be spent on more valuable things. And don’t forget to ask your employer about pre-tax commuting benefits, which may not feel like huge savings per month, but could save you hundreds per year.

Get a library card. 

Bookstores may be closing, but the public library system is stronger than ever. If you haven’t visited yours lately, you’re in for a treat. Libraries are embracing the digital age with e-books, wireless printing, and even movie streaming. You don’t even have to go there—you can check out digital titles straight from the website to your Kindle.

If you are out and about, the library makes a fantastic (and free) resting spot as an alternatative to spending money at a coffee shop. And it's a great place to print things (for about $0.10 per page) if you don't own a printer.

Split up your grocery shopping. 

Some grocery stores may have better prices on produce, while others have cheaper options for canned or packaged foods.

Pay attention to prices. It’s easy to assume that an apple will cost the same at any market, but it can vary dramatically depending on the store, or even the neighborhood. Trader Joe's has affordable nuts and dried fruit, while Safeway might be better for brand name cereals. These days, people are eschewing traditional grocery trips for more sporadic shopping, so stores like CVS and even 7-Eleven are expanding their options to include fresh produce, healthy snacks, and bulk granola bars. (CVS is exceptionally generous in sending weekly coupons, so sign up for those ASAP.)

Bring reusable bags with you, and not only will you likely score a small discount for bringing them, but it’ll help you stick to the list when you can only buy what will fit into two canvas totes. (Plus, it’s the environmentally sound thing to do.)

Find a Buy Nothing group.

While Craigslist has a “free” section, it’s usually filled with grungy couches or used urns (and you have to drive out to the ‘burbs to get them). These days, Buy Nothing groups are popping up on Facebook across the nation. Since they’re locally run and encourage a sense of neighborliness, you’re much more likely to see furniture in good condition, useful odds and ends, and even homemade meals. Thrifting for clothing is also a great way to spend less on threads, as well as keep them out of the landfill.

Staycation. 

Sometimes you need to explore somewhere far, far away. But it's amazing how just a little distance from home can feel like a total getaway. When Bali isn't fitting into your travel budget, book an Airbnb in another neighborhood and discover all it has to offer. 

There’s way less stress when you just need to throw a couple outfits into a bag and hop on the subway to another part of town—and you may not even need to take time off work. Find an artsy neighborhood and stroll through murals and galleries, or pick a foodie haven with unique restaurants and food trucks. Or pick somewhere outside the urban jungle for a weekend of pure, uninterrupted quiet.

Pack your lunch. 

Bringing lunch instead of buying it makes a big impact on your M-F budget.

It's so tempting to hit up a food truck, but a daily $9 banh mi adds up quickly. Instead, cook ahead of time and invest in a microwave- and dishwasher-friendly Pyrex container. Just shop for three categories—grains, protein, and vegetables—and you've got a meal. Make a big batch of brown rice, chop up bell peppers and broccoli, and toss garbanzo beans on top. Voila, trendy grain bowl.

Same idea applies to brewing your own coffee, rather than hitting up coffee shops on the reg. When it’s time to clean up, making your own cleaning supplies can be more economical and eco-friendly. What about breakfast? If you do buy coffee, skip the pastry case and go straight to the day-old basket, where many bakeries sell yesterday’s (perfectly good) muffins and treats for about a buck each.

Host dinner parties. 

A typical Friday night can easily become a $100 affair. Instead, open your door and host at home. There’s something far more memorable about having friends around the table (or, more likely, scattered around your city-size apartment). Plus, you won’t be yelling over loud music or circling in search of an open table. Everyone will put in an easy-on-the-wallet $10 (and you don't have to pay for a ride home) or go potluck style and share it up.

You can also keep an eye on college alumni or networking events, where you’ll find free refreshments (plus advance your career contacts, for extra good measure), and keep track of happy hours and weekday discounts at bars and restaurants.

Use your friends (and return the favor).

In your network of friends, family, and coworkers, someone is getting something for free that you usually pay for. Like your barista friend that takes home pastries at the end of the day, or your musician friend that gets free tickets (or just knows about all the good free shows in the area).

Likewise, you may get a discount at work or have valuable skills of your own. Offer to design a friend’s Wordpress site in return for help on your taxes, or make your roommate dinner in exchange for walking your dog. We all have different schedules and areas of expertise, so spread the talent around and see where you can pitch in for pals while they do the same for you.

Find free fun.

From concerts to museum days, record release parties to street festivals, university talks to outdoor movies and film previews, cities are full of freebie activities that will satisfy your culture-vulture ambitions and your wallet. Sign up for email lists at museums and local businesses, and follow them on Facebook so they pop up right in your feed. For the unconventional, look at sites like Atlas Obscura for a unique guide to your city, like quirky monuments and public art you can scope for free.

What money-saving tips would you recommend? Share your smart-wallet secrets in the comments section below.

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