New York and London are some of the most desirable cities to live in due to the variety of work opportunities and varied entertainment options – although residents pay a premium.
According to the Economist Intelligence Unit’s Worldwide Cost of Living Index, New York will be the world’s most expensive city in 2022, along with Singapore. London finished 28th.
Lucy Wong is a native New Yorker who moved to London in February. She recently took on the challenge of limiting her weekly expenses to $150, which she has done while living in different cities around the world.
Tracking your spending “makes you really aware of how much you’re spending,” Wong said. “I spent so much more money when I was in New York.”
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“New York is way more expensive than London,” said Lily Slater, who grew up in London and moved to New York in 2017 for her graduate studies. “I think the appetite for price gouging is much stronger here.”
“It’s much more about the maximum I can ask for here?”
One of those high-priced items is rent. A one-bedroom apartment near downtown costs about $3,700 in New York, according to the June 21 cost-of-living data collection project Numbeo, while a comparable apartment in London would cost around $2,600.
In addition to a higher rent payment, groceries are almost 70% more expensive in New York, according to Numbeo.
“Every time I go to the grocery store, I’m shocked at the prices,” Wong said. “When I check out, I think it would be twice as much in New York.”
How income and taxes affect purchasing power
While New York is more expensive, residents tend to earn more and are taxed less than Londoners. According to the St. Louis Fed and the UK’s Office for National Statistics, the average New Yorker earned just under $1,400 a week in December, while the London average is about $970.
For this reason, local purchasing power in New York is around 23% higher than in London, according to Numbeo estimates.
“When I got my last job, I got a pretty big raise,” Slater said. “My father, who lives in south London, was amazed [at] how much money i would make
Slater’s father soon realized that her paycheck wouldn’t go far after visiting New York.
“He and his girlfriend bought a coffee, and just two coffees were $15,” Slater said.
Despite the premium prices, people still want to live in both cities. According to a recent survey by Time Out magazine, New York was the city most likely to attract readers, followed by London.
“I was so excited to come to New York when I moved here, and I get it, but I don’t think people feel that way about London,” Slater said. “There’s something about New York where people are so obsessed with living here that they’re all resigned to how gross it is, how tough it is, and how expensive it is anyway.”
“And I don’t feel that’s the case in London.”
Watch them Video Above you can read more about the cost of living in New York and London and why people choose to live in these cities when it is so expensive.