New York and London are some of the most desirable cities to live in due to the amount of job opportunities and the vibrant entertainment options — but residents are paying a premium.
New York tied with Singapore as the most expensive cities in the world in 2022, according to the Economist Intelligence Unit's Worldwide Cost of Living Index. London ranked 28th.
Lucy Wong is a native New Yorker who moved to London in February. She recently challenged herself to limit her weekly spending to $150, something she's done while living in various cities around the world.
Tracking your spending "really makes you conscious 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 a lot more expensive than London," said Lily Slater, who grew up in London and moved to New York for graduate school in 2017. "The appetite for price gouging I think is much stronger here."
"There is much more of a sense of 'what is the most I can possibly charge here?'"
One of those high-ticket items is rent. A one-bedroom close to the city center is around $3,700 in New York, according to cost-of-living data collection project Numbeo as of June 21, while a comparable apartment in London would cost roughly $2,600.
On top of a bigger rent payment, groceries are nearly 70% more expensive in New York, according to Numbeo.
"Every time I go to the grocery store, I am shocked at the prices," Wong said. "When I check out, I'm like, in New York, this would be double."
How earnings, taxes affect purchasing power
New York may be more expensive, but residents tend to make more money and are taxed less than Londoners. The average New Yorker earned a little less than $1,400 per week as of December whereas London's average is about $970, according to the St. Louis Fed and the U.K. Office for National Statistics.
Because of this, local purchasing power in New York is about 23% higher than in London, Numbeo estimates.
"When I got my most recent job and I got a pretty big pay bump," Slater said. "My dad, who lives in South London, was astonished [at] how much money I was going to be making."
Slater's dad soon realized her paycheck must not go very far after visiting New York.
"He and his girlfriend bought a coffee, and it cost $15 for just two coffees," Slater said.
Despite the premium prices, people still want to live in both cities. New York was the top city readers dream of moving to, followed by London, according to a recent Time Out magazine survey.
"I was so excited to come to New York when I moved here, and I get it but I think that people don't feel that way about London," Slater said. "There's something about New York where people are so obsessed with living here that they all put up with how gross it is and how hard it is and how expensive it is anyway.
"And I don't feel like that's true in London."
Watch the video above to learn more about the cost of living in New York and London and why people choose to live in those cities if it's so expensive.
