A least expensive city is a city where the average cost of living is lower than that of other cities. This typically consists of inexpensive shelter, groceries, transportation, utilities, medical care, and basic services. But the very low-priced city for one may not be the same for another. The total amount of expenditures is influenced by people’s income, their lifestyle, family size, housing options, and where they live in the city. It is good to take a closer look at the monthly budget when comparing two cities, not just the rent. If transportation or food is high, a city with lower housing costs can be expensive.
What Does Least Expensive City Mean?
Usually, the “Least Expensive City” is a city where individuals can afford to live decently on an affordable budget, spending lower dollars on basic commodities and services.
The comparison between cities is not as straightforward as it sounds and is more complex than just one price. For the individual, especially for those who live alone, or are renting in popular neighborhoods, the biggest cost is typically Housing. Other items, such as food, transportation, electricity, internet, healthcare and entertainment can make a significant difference to a monthly budget.
A town can be cheep to live in, yet not so cheep to eat in. Still another city may have good public transit, but high electricity costs. Hence, when comparing costs of living, it is common to compare a few items and not just one.
There are several different valid answers to the question “what is the cheapest city?”, such as:
- An extremely low cost of living city.
- A city with a lower rate of housing costs as a proportion of household income.
- A “City of cheap food and cheap transport.”
- A town that provides affordable services and basic needs.
- A city that allows people to live their lives on a lower monthly income.
It can have a different meaning from one person to another depending on the person asking. Students can concentrate on rent and public transport. A family might be more concerned with housing, schools, food and healthcare. The remote worker might consider the expenses associated with Internet, house, and lifestyle.
How Is The Cost Of A City Measured?
There’s no definite formula for the lowest cost city in the world. Various organizations provide and employ different datasets and methodologies.
There are a number of major categories that typically are included in a cost of living comparison.
| Category | What It Includes |
| Housing | Rent, home prices, deposits, and housing fees |
| Food | Groceries, restaurants, and basic household food |
| Transportation | Public transit, fuel, taxis, and vehicle expenses |
| Utilities | Electricity, water, gas, heating, and cooling |
| Internet | Home internet and mobile services |
| Healthcare | Medical visits, medicine, insurance, and related costs |
| Entertainment | Movies, fitness, dining out, and recreational activities |
| Education | Tuition, childcare, books, and school-related expenses |
| Personal expenses | Clothing, household items, and other daily purchases |
Generally housing requires special attention as it can vary significantly from neighborhood to neighborhood.
For instance, two people in the same city might have two different budget. You can live in a small flat, outside the center and take public transport to and from the center. Another may reside in the center of the city, go out for meals often, and take taxis. Even if they resided in the same city, their monthly costs would not be similar.
Another important factor is income.
Low prices do not necessarily lead to high average wages in a city. However, in such a case, the city could be cheap, but not affordable to its own citizens. On the other hand, an individual who receives a salary from an overseas source might discover that the identical town will be very budget friendly.
Cities Often Considered Among The Least Expensive
The rankings of costs vary from year to year. The results may vary based on currency exchange rates, inflation, housing demand, transportation costs, as well as local economic factors.
International comparisons of cost of living typically show cities in South Asia, Southeast Asia, Africa, Eastern Europe and Latin America as being lower in cost. The location of each of the cities varies according to the source and the categories measured.
Other cities which often get mentioned for their comparatively low cost of living include Kathmandu, Nepal; Lahore, Pakistan; Dhaka, Bangladesh; Cairo, Egypt; Hanoi, Vietnam and Tashkent, Uzbekistan. However, one of these can’t be called the “least expensive city” until you say the rank, year, method and lifestyle being measured.
Alongside the big cities, there are smaller cities that might be less expensive than the national capitals. This is because large cities tend to draw businesses, foreign employees, students and investors in real estate. Rents and other prices may rise when demand is high.
Therefore, it may be helpful for someone looking to rent something for a cheap price to compare both the large cities as well as the smaller regional centres.
Why Housing Has Such A Big Impact
One of the primary factors that contribute to the cost of living varies between different cities is housing.
The price of rent is different in different areas of the same city. It is common that price for C.B.D. and popular residential areas are very high as compared to the areas further away.
Property type is also a factor. The price of a furnished studio, a shared flat and a bigger family home are not the same.
As you conduct your research on the cheapest city, take into account the following house related questions:
- How much does it cost, on average, to rent a house per month?
- Are utilities included?
- How much is the security deposit?
- Is the property equipped with furniture?
- What is the distance from work or school?
- Are there public transport options available which are easily accessible?
- Are lower-priced neighborhoods reasonably safe and convenient?
- Have rent prices been going up really fast?
If a low cost housing unit is far away from work, it will not be as desirable. However, a home close to public transit can mean lower overall monthly costs.
Another factor is homeownership. In some cities, property can be a bargain, but there are other factors to consider, including taxes, maintenance, insurance, financing and legal fees.
That is why it is important to not assume that “cheap housing” and “cheap living” are synonymous.
What Makes A City Affordable For Different People?
The budget of the cheapest city varies greatly from person to person.
Students
Students may frequently have small budgets. They are most likely to be worried about:
- Affordable shared accommodation
- Public transportation
- Low-cost meals
- Internet access
- Tuition and education expenses
- Entertainment and social activities
An urban area where education is being valued and pursued by a large number of citizens can provide housing and food costs that don’t necessarily appear in a broad cost of living comparison.
Remote Workers
There may be other calculations for remote workers. Local prices can significantly impact their purchasing power if they make money from another country.
They may prioritize:
- Reliable internet
- Affordable private housing
- Good cafes or coworking spaces
- Transportation
- Healthcare
- A comfortable climate and way of living.
- When travelling from abroad, visa and residency fees can be expensive.
But exchange rates may fluctuate rapidly. What may seem a cheap price in a given currency could be quite costly in another.
Families
Rent and food isn’t typically the only concern for families.
There are significant monthly costs in school fees, childcare, health care, transport and bigger homes. Low-cost housing options in a city can offset high costs of private education or childcare and make a place difficult to afford for a family.
Retirees
Retirees might prioritize things like health care, home, food, mobility, and daily living.
Access to hospitals and pharmacies can be as important as the rent for them.
Cheap City vs. Affordable City
The difference between cheap and affordable is important.
Low prices is the characteristic of a cheap city. An affordable city is a place where such rates are reasonable given people’s incomes, or the income of the person moving there.
Imagine two cities.
City A’s rent is $300/month and local wages are $500/month. The rent in City B is $700 and the average wage is $2500. In terms of rent, City A is cheaper. If we consider the rate of rents to income, this changes.
Hence, serious cost-of-living research must take into account purchasing power.
Other considerations also have an impact on affordability:
Income: Increase in local wages can compensate for the increase in prices.
Housing: Household expenditure on rent and property may be a key component of the budget.
Transportation: An inexpensive good transportation system can decrease the need for a car.
Food: Grocery prices and restaurant expenses are quite different.
Healthcare: Medical services which are affordable over time.
Taxes: Income, sales, property and other taxes may impact the true cost of living.
Personal habits: If you regularly go out, eat out and do paid work, you will have a different budget than if you stayed at home.
The best comparison is, therefore, not just “Which city is the cheapest?”. It is “Which city provides the costs and lifestyle that fit my budget?”
How To Find The Least Expensive City For You
If you want to move to another country, study or work from home, or retire, begin by developing a realistic monthly budget.
First, list your expected costs, before you compare cities.
For example:
| Monthly Expense | What to Estimate |
| Rent | Apartment or shared accommodation |
| Food | Groceries and eating out |
| Transportation | Transit, fuel, taxis, or rideshare |
| Utilities | Electricity, water, gas, and other bills |
| Internet | Home and mobile internet |
| Healthcare | Insurance and routine medical costs |
| Entertainment | Recreation and social activities |
| Other | Clothing, household items, emergencies |
Next, do the comparison between the same categories for multiple cities.
Additionally, neighborhoods should be researched in addition to city averages. Large differences may occur between inner and outer city areas, as shown in citywide statistics.
Research the options for renting items, buying groceries, transportation and other services in the area before you move. Online cost-of-living databases can be helpful as a starting point, but should not be regarded as an exact picture of the cost of living for each individual.
Last but not least, take into account factors that cannot be easily put into a price.
A low-cost city can be lacking in transportation. Or the other one may be a little bit more expensive, but then it might have shorter distances to commute and better access to the necessary services. Those differences may impact your finances and life.
Final Thoughts
The cheapest city is not always a single city that is suitable for everyone. Cost-of-living rankings vary by year, data source, exchange rates, and the components used to calculate the cost.
Any worthwhile comparison should consider rent, food, transportation, utilities, healthcare, taxes, and income: Also, it should take into account the individual’s lifestyle and the cause of their relocation.
Housing and food could be the primary concerns for students. Rental and internet expenses could be the focus of a remote worker. Families might want to consider education and healthcare budget. Retirees might prioritize housing, healthcare and convenience options.
The best way to do this is to look at the monthly budgets as a whole rather than on one low sale. This will provide a better idea of the actual expenses of living in a particular city and what this means for certain financial circumstances.
