There’s nothing quite like city life. The contagious energy, endless entertainment opportunities and melting pot of people and cultures make for a fun, unique lifestyle. But, as we all know, everything comes with a price. And, in a city, that price is probably a lot higher.
Many fall into the trap of excusing their spending behavior on city-based circumstances: absurd rent costs, energy bills, paying for parking or transportation, etc. These factors and the overall higher cost of living can certainly drain your wallet, and may seem intimidating to those who care to save for the future. But, saving money in a city is a feasible option. It is possible to thrive in the city lights, while still thinking practically of your financial future and making smart monetary decisions.
With that said, here are the two best ways for how to meet your long-term savings goals while living in a metropolis.
- Choose your investment accounts wisely.
There are pros and cons to every type of investment account, so make sure that you choose one that works best for your financial situation. This is especially important when dealing with retirement savings. Retirement income can vary dramatically depending on many factors– even geographic location– so it’s crucial to make the best investment decisions possible. Regardless, you should probably opt for a Roth IRA instead of a traditional IRA. The main difference between the two is when taxes are taken out. A Roth IRA takes taxes out as you invest, whereas a traditional IRA doesn’t make you pay taxes until you withdraw your money. Since taxes inevitably increase over the years, opting for a Roth IRA is one of the best ways to maximize your saving potential.
- Be conscious of your weekly spending.
This tip may seem obvious, but you’d be shocked at how quickly small lifestyle changes can lead to financial improvements. Buying a coffee on the way to work, Uber-ing instead of walking, or even ordering delivery from the restaurant down the street are all small spending habits that can quickly drain your accounts. Set a budget for how much you want to spend on these things each week and– this is the most important point– stick to that budget! It’s okay to treat yourself to the occasional fancy Starbucks latte. But, on a daily basis, try and brew your own coffee at home. City life may be convenient, but don’t let it get the best of you.