How to Afford to Live in an Unaffordable City


One of the biggest challenges facing millennials today is enjoying any semblance of a comfortable lifestyle while underemployed (or unemployed) and saddled with student loan debt.

For all the crap Boomers give the generation of their adult children, millennials do really have it harder than their parents did.

Virtually everything is more expensive, but the two things that have become the most expensive remain the measuring sticks of success: post-secondary education and home ownership.

For many, home ownership isn’t even on their radar because they’re trying to afford rent in an unaffordable city.


How much should you be spending on housing?

A general rule of thumb is to spend no more than 35% of your net income on all your housing costs. This includes rent/mortgage plus utilities, insurance, repairs & maintenance, homeowners dues, and so on. This comes from a suggested (but not mandatory) budget breakdown that looks like this:

For people living in pricey cities like Toronto, Vancouver, San Francisco, New York, or others, 35% of your net income might not even cover your average rent, let alone your other housing costs. If you live in an unaffordable city, it is permissible and necessary to spend more than 35% of your net income to keep a roof over your head.

If you forego car ownership, you can comfortably accommodate spending up to 50% of your net income on housing costs.

This is because as you can see from my suggested budget above, 15% of your net income is a good rule of thumb to spend on transportation.

However, if you can eliminate or significantly reduce your transportation costs by choosing to live near your work and nightlife, then you can feel good about allocating these savings to increased housing costs.

Focus on reducing your largest expense: housing

If your happy place is the centre of a concrete jungle, I feel you. I’ve always loved to live smack dab in the centre of a city, particularly within a 3 block radius of a grocery store, my favorite coffee shop, and my work.

I’m lucky I’ve never called Vancouver or Toronto home otherwise this would take more serious financial gymnastics and creativity to accomplish.

However, I have lived in a few less desirable places only to stay on budget and still live in the neighborhoods I’ve wanted. Roommates, walk-ups, old buildings, balconies that faced parking lots, no balconies whatsoever, closet-sized bedrooms, and screeching water pipes have all been part of the “sacrifices” I’ve made to live where I wanted and within budget.

The secret to living in the city you want (and the neighborhood you want) is finding the most affordable option in that location. There are a few different ways to do this:

  • Share space by getting roommates (but maybe not 14!)
  • Settle for smaller space, like a bachelor or a studio
  • Choose an older building
  • Give up “must-haves” like a dishwasher or ensuite laundry
  • Look 10 to 25 minutes outside our ideal area (that is NOT a bad public transit commute or Uber ride)

When it comes to finding the home of your dreams, sometimes you have to choose between whether that constitutes the actual “home” of your dreams, and when it means the lifestyle or neighborhood of your dreams. You can’t always afford both.

Pay off your debt to free up your disposable income

There are the apartments I had as a debt-laden student, and there are the apartments I had otherwise. I’ll tell you: it’s way easier to live where you want when it’s the only real bill you have to pay.

Every $100 you’re spending on student loans is $100 that could be going to a swankier apartment — and when it comes to housing, $100 goes a long way.

Many people accept student loan payments as a necessary evil, but they don’t have to be. You can (and should) pay off your debt sooner rather than later, if for not other reason it gets rid of the monthly payments from your budget.

The difference of becoming debt free in 3 years instead of 10 is more than simply saving money on interest costs, it’s also about the opportunity cost of having flexibility in your budget 7 years sooner.

If your debt is holding you back from being able to live where you want to, then pay it off.

Or at least pay part of it off. Getting rid of your consumer debt and/or 1 or 2 student loans can mean the difference between staying in your parent’s basement and living downtown.

Start seeing your debt as a very real barrier keeping you out of the home you want — because it is. Get rid of it and you can live wherever you want.

Increase your income with a side hustle

Hands down the easiest way to afford anything extra in your budget is to dedicate a specific income stream to pay for it.

Chances are it probably would take as little as $200 or $300 more per month to be able to afford to live where you want, so now this becomes a matter of where can you find this extra money to pay your inflated rent.

A single half-day shift at a coffee shop would easily bring in an extra $50 per week. So now the question becomes:

Are you willing to make lattes for 4 hours on Saturday mornings in order to keep your apartment?

If the answer is no, you don’t really want to live there.

For the love of god, MOVE

This is an unpopular opinion, but it’s worth considering. I know no one that lives in Toronto wants to leave Toronto, but if living in an unaffordable city is killing your bank account and compromising your future financial security, nothing about living in the centre of the universe is worth it.

You need retirement savings more than you need to be close to your favorite coffeeshop.

You need to be debt free more than you need to call a certain zipcode home.

Remember: you can do your job elsewhere.

Regina, Saskatchewan really isn’t that bad.

The fact of the matter is, it doesn’t matter how amazing the nightlife in Toronto/Vancouver/New York/San Francisco is if you can’t afford to participate in it. Sometimes the fact of the matter is, you really can’t afford to live in an unaffordable city, and you’d be better off leaving.

I know it’s blasphemy to say this, and many people never come around to the idea. But you can have a really beautiful life filled with fulfilling work, fun nightclubs, and good restaurants outside of the biggest and most expensive cities in North America.

In fact, you’ll likely find living somewhere cheaper frees you from anxiety and stress that was putting a serious damper on enjoying life in the big city.

And let’s imagine for a second what your life could be like if you were able to spend only 35% of your income on housing, and free up that extra 15% for travel. Nice, right?

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19 Comments. Leave new

  • As someone who lived in and went to school in Regina, it really isn’t that bad.. 🙂 That being said, when the government cut our job industry, we had no choice but to move to a bigger city to keep the jobs we wanted. I don’t think my husband and I would be making the same combined income we are now if we stayed in Regina. Plus it’s pretty much mandatory to have a car to get around anywhere in Saskatchewan. As much as Toronto’s cost of living makes me grit my teeth now and then, having no vehicle really makes a big difference to what I can contribute to my investments.

    • I also grew up in Regina…now I live in the Vancouver area. I totally agree with you – while Regina really *isn’t* that bad, depending on what industry you’re in, there can be a pretty low ceiling on your income. And like you say, the overall cost of living in places like Toronto and Vancouver doesn’t HAVE to be that much higher than in a smaller city, it all depends on what choices you make, like not having a car.


    While I am a card-carrying suburban monster these days, I made all of those tradeoffs and more to score an affordable apartment in the downtown area I wanted. I got the cheapest, most-student-y apartment, shared it with a roommate, put up with appliances and fixtures that were maybe (maybe!) updated in the 50s, and it was a dream, because I could walk everywhere and still afford to eat pho so often they knew me by name. (That’s my version of avocado toast and I’m sticking with it.) Plus, my grand total transportation cost was a $10 sheet of bus tickets once a month.

  • A-freakin-men! I live in a super-affordable area of the country and it seems insane to me what people will pay for rent in other areas (coughSanFranciscocough). If your housing costs are strangling the life out of your finances, it’s time for a big change. If you have debt, it’s better to live in a much cheaper area than it is to pay out the wazoo for housing (if you can).

  • I’m having too much fun in Toronto though!

  • Loved this post! I’m based in Ottawa and feel like I am living the dream having a downtown apartment to myself with all bills included for less than 1K/month. I am from Toronto originally, and even after a few years in Ottawa, it still blows my mind how renting and buying are actually still such reasonable prospects here.

    Totally agree that knocking debt outta the park first can be a huge win.
    I’m still paying hundreds of dollars per month toward student loans, and it’s a reminder every single month how much more wiggle room I will have for housing, travel, and fun when it’s gone!

  • This post couldn’t have been published at a better time for me! I have just been hired at Shopify and I’m going through the debate of moving to Ottawa or Toronto (yikes $$$!) or staying where I’m at for now on the east coast to save money and kill my debt a little faster. Luckily I can do my job remotely, and the cost of living here is so cheap, I can save about $800-$1000/month more here than I can in a major city, so for now it’s kind of a no-brainer (although there’s not a whole lot to do so I want to move eventually). Ottawa is still interesting though, cheaper than TO and very beautiful…anyway, thanks for the post Bridget!

    • Omg!! Saving $1,000/mo more is a huge deal!

      Toronto is a great place to live, but with $1,000/mo in extra savings you can travel anywhere in the world — and Toronto is NOT the coolest place in the world (even if Torontonians think it is!).

      I love Ottawa even though it seems lots of millennials don’t.. I think it’s too quiet compared to the big city, but I think it’s awesome.

      Congrats on your new job! I’ve heard Shopify is a great company to work for!

  • “Millennials really do have it harder because… expensive…”

    Prices were even lower 100 years ago. That’s not the only variable.

  • I got so much out of this article. Thank you so much Bridget. I love the way your advice and voice is tailored to our generation. It’s very needed when the mainstream media climate is constantly signalling messages about spoiled millennials (who ironically are also the most indebted generation ever).

    The housing affordability issue is constantly on my mind and on my husband’s mind. It feels like it dictates so much. The thing that I’ve noticed though is that in our industry (law), the salaries really are significantly higher in the GTA than elsewhere, even in Ontario (for example, Ottawa). The percentages you provide are super useful and we definitely kept that in mind when we were apartment hunting. When you live in an unaffordable city, you likely have to worry about commuting costs. We incorporated these costs into our 35% range when we approached units.

    The other thing to think of is quality of life. Do you really want to live in a loud, uncomfortable place with a sketchy landlord when you’re already working super hard during the day just to get ahead? We have definitely in the past lived in less-than-ideal situations to save money and pay down debt. But they take their toll and are not for the long term.

    Also, I like the idea of not buying a house for a while and waiting until we can actually afford one. This also gives us the flexibility of being able to move if we’re ready for life in Sudbury, Regina, and beyond.

    • You’re very welcome Alyssa! I’m glad you enjoyed it.

      100% agree quality of life is so important. It’s nice to have a home that feels like a refuge from the other stress in your life — not an added burden!

  • Part of being on a FIRE journey is cutting out expenses, so investing in a live-in flip or multi-family property is a great way to reduce or eliminate housing costs. Then getting rid of your car payment or car altogether. Those two things will make it so much easier to live in an expensive area.


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