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Financial Implications of Living in a Small Town

WTH is a small town anyhow? According to Wikipedia, “a town is a human settlement larger than a village but smaller than a city. The size definition for what constitutes a “town” varies considerably in different parts of the world.”

The word “town” is further broken down in the section about the United States: ” In some instances, the term “town” refers to a small incorporated municipality of less than 10,000 people, while in others a town can be significantly larger.”

It seems no one can agree on what is a town and what is a city, let alone the difference between a small town and a “regular” sized town.

Anyhow, for my purposes today, I’m going to say I live in a small town. My town’s current population is 5,416 and we are easily the largest town within about a 1.5 hour radius. Plus, we don’t have that many things to choose from in terms of entertainment.

Ok, my town is not quite that bad. But there are some serious differences in the financial lives of people who live in my area vs those who live in “the big city”.

So, how are the finances of someone living in a small town different from someone in a big city? I’m glad you asked.

Spending More

– There’s no competition. Because of the small size of our towns, there’s no price competition to drive down the cost of goods and services. Even everyday things like groceries can cost more out here because of the lack of competition. Of course, it’s gotten more competitive out here now that we finally have a Walmart… (I never thought I’d be thankful for Walmart, but sometimes I am.)

– You have to plan ahead and (sometimes) buy in bulk. Again, because of the lack of stores out here, combined with the lack of selection available in the few stores we do have, you have to plan ahead when you get ready to go to one of “the big cities” around us. This also means you have to be financially prepared to drop all your money in one fell swoop by buying in bulk. Oftentimes when my family or friends and I go to Denver, we get strange looks for buying things in bulk. I’ve even gotten comments from sales clerks about the high amount I’m spending. What they don’t understand is when you live in a small town you have to buy everything all at once because you only have the opportunity to shop “in the city” every 6 months (or less). (But bulk buying can save you money in some ways too.)

Spending Less

– Entertainment costs are low. There’s nothing to do here. We have only 4 “sit-down” restaurants and they get really boring after a while. Our movie theatre gets only 2 movies at a time. The good thing about this lack of entertainment is that is helps keep my entertainment spending in check.

– You can borrow and beg for lots of things. I haven’t had to “invest” in many tools or repair things even though I am a homeowner. Because I’m related to about half the town (okay, probably only about 1/3 of it), I can usually borrow or trade to get the tools I need to work on any DIY projects or repairs that need completed.

 Do you live in a small town? How does small town or big city living affect your spending?

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Erin Thompson

Erin Thompson spent years managing her own blog about budgeting and debt. Because of that, she has great insights not only about managing spending and borrowing but also about running websites profitably. When she's not writing articles for us, she's traveling and looking for new types of wines to try.
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