Living with credit, Protecting yourself

Struggling millennials should reconsider expensive city living

Sienna Kossman

If you’re a young adult drowning in debt and still relying on mom and dad for financial help, get out of town.

I mean it. Leave. Move.

Studies suggest that while big cities like New York City and Washington, D.C., may have all sorts of career, social and urban appeal, the high cost of living in such places could drive you further into debt — especially if you’re burdened with student loan debt.

The appeal of big city life might help explain why so many young adults are leaning on parents for financial support these days. For example, a Bank of America and USA Today survey found 40 percent of millennials — including those who are married or live with a significant other — still receive money from their parents. A December 2015 research paper by North Carolina State assistant professor Anna Manzoni came to the same conclusion.

Financial help from parents may help you get by, but it’s not a viable, long-term solution. After all, your parents may still have a retirement to pay for.

If you’re financially floundering while trying to live a pricey city life your parents can’t fund indefinitely, you may need to consider moving to a more affordable city to reduce financial strain.

Now, before complaining that you want to feel like an adult with a cool job in a cool city, not a struggling kid living in Podunk, I can relate. I grew up in small towns, went to a relatively small college and by the time I graduated, I was ready to move someplace bigger and, in my opinion, “better.”

But being an adult also means making tough decisions. If your parents are digging themselves into debt to help you or are threatening to cut off their support, maybe it’s time to seriously consider if your current living environment and job are worth the financial strain. Ask yourself the following questions:

1. Is my current job worth being broke?
Maybe you got super lucky and scored your dream job right out of college. Or, even if your job isn’t perfect now, maybe it’s a great stepping stone to something better in the years to come. If either of those scenarios explains your current situation, living in a pricey city and struggling financially for a little while may pay off in the long run.

I was broke when I moved to Austin, Texas, immediately after college, but it was a smart move for both my career and finances in the long-run. It would’ve been cheaper (and easier) to stay in Oshkosh, Wisconsin (where I went to college), and work there, but I probably wouldn’t be as financially stable as I am now, two years later.

However, if your job is “just OK” and you’re really struggling to afford the cost of living, look for a more suitable job in a more cost-effective environment. Or if you’re living in your ideal city, but can’t find a job to support yourself without your parent’s help, it may also be time to change your address.

2. Is my debt debacle a short- or long-term issue?
If you just graduated from college, moved to a new city, are trying to furnish a new apartment and buy business casual attire for your new job, I’m not surprised you’re financially strained. But, after a few full-time paychecks you may feel more comfortable managing day-to-day finances and your debt.

On the other hand, if you’ve been settled for a while, but can’t seem to gain control of your debt and establish financial security despite your best efforts, it may be time to consider new options. You can only reduce living expenses so much in an expensive city. Long-term financial issues might best be resolved in more extreme ways — like moving somewhere where the cost of living is half of what you pay now.

3. What would make me happier: Less financial stress or a better job/environment?
Money is important, but so is your mental health. If your current financial state is stressing you out beyond belief no matter what you try to do, it might be time to completely remove yourself from the situation. Long-term stress is not only bad for your health, but it could also affect your work and relationships.

However, if you sincerely believe that you will be happier staying put and there is opportunity for advancement, then maybe you can get a roommate (or two) or pick up a side hustle to increase your cash flow until your salary gets bumped up a notch.

If after asking yourself these questions it seems like moving to a cheaper city (such as Akron, Ohio, as Bloomberg recommends) wouldn’t severely hinder your career or overall happiness, then it might be worth considering.

If you spend a couple years living more affordably and saving money, you then might be able to move to a more desirable location down the road — without having to ask your parents for help. You might not be able to live exactly where you want, but becoming financially stable (and independent) doesn’t always come easy. If you have to make temporary sacrifices, it’s OK. Do what you have to now so you can do what you want to later.

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  • Gasman

    Maybe, maybe not. Transportation costs are huge in many States where auto insurance, gas, vehicle costs are high. A daily commute to work reduces quality of life. Your transportation costs are a key factor to consider. A five minute bus, bike ride, or walk to work versus a 120 minute drive each day must be considered. Do a budget and consider both options.

  • John Q Governor

    Out of college and parents STILL pay your bills? Get off the couch and earn your keep for once.