Small Town Vs. Big City: What Are The Pros And Cons?

Small town vs big city

My wife and I have long discussed whether we should stay in the big city or move to a small town in the future.

There are many aspects to consider – both financial and non-financial – and there are pros and cons for living in the big city and living in a small town.

Here’s our thoughts so far.

Cost of living

Being a personal finance blogger, I of course have to start with the cost of living in the big city vs. a small town.

The bottom line is that almost everything is more expensive in a big city compared to a small town.

In general, housing costs tend to be (much) higher in big cities than in small towns. More people want to live in big cities and there’s limited space which drives up prices.

Living in a small town, you will get much more bang for your buck when looking for housing. You might often be able to get a bigger house in a small town at a lower cost than in big cities. Furthermore, depending on the country you live in, the property taxes might also be equally lower.

However, living in a big city myself and owning an apartment, I also know how much you can earn on real estate price increases.

Real estate in big cities typically increase more than in small towns due to urbanization driving up demand. The question is whether the price increase can justify a potential higher mortgage, real estate tax etc. Of course, owning expensive real estate in big cities, you might also have a bigger risk in case of a housing market crash.

Getting bang for your buck is not only the case for housing. Prices for groceries, restaurants etc. might also be lower in smaller cities on average.

I know a case of a national bakery chain in Denmark that heavily price discriminate based on whether the shops are in small towns or big cities.

Finally, job opportunities tend to better and salaries higher for most job types in big cities, so if you don’t want to commute each day this is of course also worth considering.

Big city pros:

  • More job opportunities and higher salaries
  • Potential for higher real estate price increases

Small town pros:

  • More bang for the buck across most of the largest expense categories including housing

Activities

This is one of the non-financial things of the city that we really treasure.

The city is more vibrant than a small town. The busy life in a city is not for everyone, but I must admit that we use the city quite a lot.

The city has the characteristics of each unique area, nice stores, good food, plenty of schools, childcare options, public transportation (at least in some cities) and playgrounds. There are many opportunities to take lessons/courses in e.g. music, art and languages, and there are plenty of things for kids to do.

The small town only has a limited selection of the above and it’s often not in close proximity to home.

You might not value these activities in the big city in which case the small town might suit you better, but for now, this is one of the main reasons we have decided to stay in the city. However, the city’s pleasures might also cost you more than in a small town.

Big city pros:

  • Much more life with plenty of opportunities

Small town pros:

  • Much more quiet and less busy
  • Lack of (expensive) activities might save you money

Transportation

If you live in a small town you might have a harder time getting around.

From a financial perspective, you might need a car which can be costly.

Currently, we don’t own a car and we have no trouble getting around in the city.

In the city, I can ride around on my bike since everything is relatively close. If I need to go further, I can use public transportation. I can even use ride-hailing services like Uber or Lyft. I could also use some of the emerging car sharing companies that allow me to rent cars by the minute at a much lower monthly cost than owning a car.

In a small town, you are very much dependent on a car to get around (except if you don’t ever need to leave the small town).

For some people living in small towns, you will need to drive long distances to get a haircut, shop for clothes or enjoy various types of entertainment. The same goes for last-minute items if you just forgot to buy a crucial ingredient for your dinner.

This increases the need for a car. On top of the amount required to purchase the car, the running costs of gas and maintenance should also be included. This can be a costly endeavour that definitely needs to be considered before moving to a small town.

Aside from the financial aspect, there’s also the time spent commuting.

Living in a small town, you might have to spend a lot of time commuting – especially if you work in a big city. You might also have to travel further to visit friends and family.

Big city pros:

  • Shorter distances to travel meaning less time spent in transport
  • Lower transportation costs by not necessarily needing one or more cars

Small town pros:

  • None – except if you get closer to work, activities, friends and families by moving to a small town

Nature and pollution

An important thing to consider is the closeness to nature and the pollution level in big cities vs. small towns.

One of the things I dislike most about the city is the pollution level. Many large cities have a pollution problem. In fact, WHO estimates that 4.2 million people die from air pollution every year alone.

For me, that is a major drawback of living in the city. Especially now that we will be parents, we are considering what kind of air we want to expose our child’s lungs to.

On top of this, most cities are not as closely located to unspoiled nature as small towns are. If you like spending time in the nature, this is of course something to consider.

Big city pros:

  • None

Small town pros:

  • Often low(er) air pollution
  • Often closer to nature

Friends & family

This one is important for my wife and I. It is hard to say whether the big city or small town in general is better than the other, because it’s highly individual.

One of the main things keeping my wife and me in the city is that the majority of our friends and family still lives in our city, Copenhagen. For us, one of the hardest things about moving to a small town would be the distance to close friends and family.

It’s impossible to say whether a big city or a small town will be best for you in terms of family and friends. I guess that will be up to you to figure out 🙂

The million dollar question: Do we want to move to a small town?

For now, no. We would like to stay in the big city.

However, there’s a few things that could make us consider moving to a small town in the future:

  • If our friends and family move out of the city (which has already started slowly)
  • If we get many kids and need more space than affordable apartments/houses in the city can provide
  • If we want to have a garden where our kids can play
  • If pollution levels increase further and make it less attractive to live in the city
  • If we want to become financially independent even faster than currently planned

How do you decide what is right for you?

So, how do you decide whether to live in a big city or a small town?

We sat down and prioritized the criteria above (cost of living, activities, transportation, etc.) and we rated them from 1-5 depending on how important they were for us.

Then for each of the criteria we scored them based on how attractive they were for a big city and a small town.

In the end, we took the sum of the product of how important the criteria were and how well the different locations lived up to them from 1-5.

Not to say that this decision should be a mathematical exercise, but for us it served as a great framework to start discussions about where we really want to live.

For now, that is in the big city 🙂

Your turn: Why do you prefer living in a big city or small town?

2 comments

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2 comments

Steveark May 23, 2019 - 19:37

I’m in the US so there may be some differences but I spent my entire career in a small town of less than 20,000 people. Actually I live outside of town and my work commute was to drive into town, clear across town, including passing through two school zones and still, eight minutes was my longest commute time. I could even drive home for lunch if I wanted. I was provided a company car that had unlimited personal usage included so that wasn’t a cost to me. Literally every shop and restaurant was within ten minutes of my house and I lived on eight hundred acres of wooded wetlands, although I only owned two acres of it. We have all kinds of wildlife in our yard and know all our neighbors almost like family. There is no crime and our little town has an active arts community including a good symphony. We have a local college and great public schools. I made big city wages here and was so grateful I never had to live in a dirty, noisy and crowded city. I traveled to most of the large cities in the US and while they are fun to visit I would hate to have to live there.

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Carl Jensen May 24, 2019 - 17:42

That sounds like the dream, Steveark! Most of the big city advantages while avoiding some of the small town costs… and then of course a few benefits of a small town that I missed. Especially the closer relations you can form with your neighbors can be great (although, the probability of finding a cool neighbor is smaller than in a city, and cool neighbors are not necessarily a given) 🙂

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