Rural vs. Urban Cost of Living

People have a lot of opinions, and assumptions, about whether a rural lifestyle or an urban lifestyle is better. The truth is, there are positive and negative aspects to both kinds of living. According to the U.S. Census Bureau, in 2016, the median household income in rural communities was 4% lower than that of urban communities. However, roughly 3% more families in urban areas were living under the poverty line. 

The cost of living, earnings potential, and lifestyle differences all combine to make each lifestyle different. Before you decide to buy a farm in the country or get an apartment in Manhattan, it’s essential to understand the pros and cons of both lifestyles. 

Advantages of urban living

While urban living does get a certain amount of negative attention for its high price tag, it also comes with opportunities and amenities that rural living cannot offer. Urban living offers more options for employment, entertainment, and transportation, and many people feel these positives far outweigh the disadvantages. 

Earnings potential

According to Bloomberg, urban areas (both large and small) consistently report earnings higher than the national average. Residents can find higher-paying jobs in urban areas than in rural areas, which leads to higher net worth.  

There is also a wider range of job opportunities for workers. Urban areas have long lists of businesses. A rural area will have a more limited list of open job opportunities, and thus a limited amount of earning potential for residents. 

Entertainment

Urban areas have a variety of entertainment options. From restaurants and bars to music venues and community events, urban areas have fun activities for everyone. If you’re on a budget, urban areas also offer free or low-cost entertainment opportunities. These include:

• Festivals
• Concerts in the park
• Botanical gardens
• Open mic nights

Taking advantage of low-cost entertainment can help residents stick to their budgets, and avoid credit card debt while living in a high-cost area. It’s important to be careful with your entertainment costs. While large cities do offer many affordable entertainment options, they also offer some of the most expensive entertainment options imaginable! 

Better transportation

One thing that cities are well known for is transportation. Many cities of all sizes offer extensive bus routes, trams, and subway systems. These transportation options mean you may not even need to own a car, saving you money on car maintenance, insurance, and gas. 

Transportation options may also limit the effect that traffic can have on your day. You can spend your morning commute reading and listening to music instead of sitting in a seemingly endless traffic jam. 

Disadvantages of urban living

For all of its advantages, urban living also has disadvantages that potential residents should be aware of. These disadvantages, including a higher cost of living, a competitive job market, and stress, may be enough to dissuade some people from making the move to the big city. 

However, for many people, the advantages of living in a city outweigh the disadvantages. 

Housing cost

Housing costs are much higher in urban areas than they are in rural areas. This includes the cost of mortgage payments and rent. Since the start of the COVID-19 pandemic, there has been a surge in rent prices in urban areas across the U.S. 

There has also been a rise in the price of buying or building a home due to the supply chain issues caused by the pandemic. Whether you’re buying a home or renting one in a city, you’re going to be paying more than you would have just a few years ago. 

The number of people in cities means there’s competition for sought-after apartments, and that competition also serves to raise rent prices. You may end up needing to share your living space with other people to lower your housing costs. 

Higher food costs

Food costs are another disadvantage of living in urban areas. Your grocery bill will be higher in major cities, and the cost of eating out will have a bigger impact on your budget. Many people in cities live in apartments, so you would be unable to start a garden large enough to significantly lower your grocery bill. 

High food costs can negatively impact your ability to pay other bills. This financial strain can cause an increased level of credit card debt as well. 

Competitive job market

While an urban area is going to have a more diverse job market with new and interesting opportunities, there will also be more competition. Cities have large populations, which means there are more applicants for your dream job than there would be in a less densely populated area. 

The competitive job market can also affect your ability to advance in your career. This level of competition with your coworkers, especially in a large corporate setting, can create a lack of work-life balance. 

Stress and mental health

An urban lifestyle is more fast-paced than a rural one. There is more noise, more movement, more people, and more competition. The high cost of living and stressful work environment can lead to debt stress, depression, anxiety, and other health issues. 

According to research from the National Library of Medicine, living in an urban environment affects mental health in a variety of ways. Cities have more pollution, more violence, and less social support than less populated areas. These factors can create an unhealthy environment for residents, especially when it comes to their stress levels and mental health. 

Advantages of rural living

For many people, rural living conjures up images of farms, ponds, and corn fields. However, every rural community is different, and each has something new to offer its residents. 

People living in rural areas enjoy a lower cost of living and lower levels of stress, compared to people living in urban areas. 

Lower housing costs

Housing costs, and the overall cost of living, are lower in rural areas than they are in major cities. For example, the median home cost in New York City (population: 8 million) is 72% higher than the median home cost in Livingston, Montana (population: 8,000). 

The lower cost of housing puts less financial strain on rural communities, and the low population density means that there is less competition for land and houses. 

Lower stress and nature

Rural communities run at a slower pace than large cities. The slow pace, the relatively lower amounts of pollution, and the amount of open and natural space lead to lower stress levels in rural residents. 

Researchers at the Yale University School of the Environment claim that time spent in nature can improve your immune system, elevate your mood, reduce stress, reduce anxiety, and lower blood pressure. Rural communities are less developed and have easier access to nature, and these features may lead to many positive health outcomes for rural residents. 

Strong community ties

The disadvantages of rural living, such as less entertainment and increased poverty, are actually the forces that contribute to one of rural living’s best advantages: strong community ties. 

Rural communities have small populations, and everyone tends to know everyone else. There aren’t going to be many large concerts, clubs, or five-star restaurants, but the community comes together to create their own entertainment. Neighborhoods will have cookouts, churches will put on plays—the sense of community and connection that is present in small, rural communities is something you can’t find anywhere else.

Disadvantages of rural living

As with any other lifestyle, rural living has its disadvantages. It’s important to understand these disadvantages before deciding to move to a small town. For some people, the advantages of living in a rural area far outweigh the disadvantages. 

Limited job opportunities

Cities are filled with all kinds of businesses that need to be staffed, but small towns are not. Depending on the size of your town, most of the businesses might be located on one street. 

If you’re interested in moving to a small town, make sure you either have a job lined up, can work remotely for your current employer, or have a decent emergency fund saved up to help you get settled until you can find new employment. 

Less entertainment

Small towns are quieter than big cities. For many people, this is an advantage, but if you are moving from a big city, it might be a bit of an adjustment. However, the lack of music festivals and dance clubs doesn’t necessarily mean that there is less to do. 

Activities like community service, church participation, farmer’s markets, and days spent in nature are great ways to spend your time in a rural environment. An added benefit is that all of these activities are low-cost and can help you stick to a strict budget. 

Isolation and loneliness

If you’re moving to a rural area far from your friends and family, isolation and loneliness may be a problem you have to deal with. In a small town where it feels like everyone knows each other, it’s easy to feel like the odd one out. 

According to the Tulane University School of Public Health, being isolated and lonely for too long can cause stress and depressive episodes. While it’s OK to have an adjustment period when you first move, being isolated for long stretches of time may have adverse effects on your physical and mental health. 

Urban and rural lifestyles have advantages and disadvantages. From the cost of living to the availability of amenities and entertainment, each lifestyle has a lot to offer for residents. It is up to you to decide what kind of life and what kind of environment is best for you, for your family, and for your budget.