Students and young professionals based in the capital must find almost £2,457.73 per month to get by, compared with just £727.13 in Sheffield, according to research.
The most substantial price difference among the findings, which comes from the cost of living calculator Expatistan, between both cities is rent.
A 900 square foot apartment in an average priced area costs £539 per month in Sheffield while in London you can expect to pay on average £2,110 in London.
Most students are given a maintenance loan, which is often costed according to the university city. However, in the 2019 National Student Money Survey, 62% of students said it is not enough to cover their living costs, forcing them to create strict budgets and find extra funds elsewhere.
Ashley Tate, chief executive officer at online student bill-sharing tool Split The Bills, says: “After university, some graduates move from affordable cities to the capital for work. Adjusting to the price differences can be overwhelming without prior preparation, resulting in financial blunders.”
Another big price jump is a public transport monthly ticket, which costs £48 in Sheffield compared to £141 in London.
“Although students often struggle to make ends meet, many still don’t learn to budget properly. This can easily lead to debt. Both students and graduates should prioritise their essential costs before splurging on luxuries,” Ashley adds.
According to Expatistan, a basic supermarket shop including deodorant, shampoo, toothpaste, chicken, milk, eggs, cheese, apples and bread, costs on average £22.95 in London compared to £16.59 in Sheffield. Although this increase seems minor, if spent weekly, the difference would amount to £25.44 per four-week month.
Even wifi costs slightly more in London, at £24 per month as opposed to £20 in Sheffield. However, when using a bill-splitting service, the price for broadband doesn’t change depending on location.
Fabian Broeker, assistant editor at Money Magpie, says: “A lot of people will be very good at budgeting their food and regular purchases such as toiletries. However, then they’ll go on a night out or have a big weekend and completely forget that this is just as much a part of a budget.”
Findings from Save the Student showed that the third biggest expense of students’ budget is going out.
According to the Wetherspoons app, a pint of Carling costs £4.20 in London and just £2.99 in Sheffield, while a vodka and energy drink mixer is priced at £4.50 and £3.80 respectively. Expatistan also found that dinner for two in the local pub amounts to £22 in Sheffield and £34 in London.
Ashley adds: “The cosmopolitan reputation of London doesn’t just hike up the prices of independent brands. Even chain companies alter the fees for the same products in different cities.”
A quick check confirms that an online student ticket at Vue cinema costs £13.24 in London; almost triple the fee in Sheffield. A monthly gym membership at the chain PureGym showed a staggering difference between both areas, costing just £19.99 in Sheffield and £34.99 in London.
“Divide your life into manageable segments, such as food, commuting, entertainment and clothing. Don’t feel overwhelmed by these first steps and remember that you don’t need to account for everything immediately. You can add more categories and rearrange your finances as you go along,” Fabian adds.
“Learn to buy only what you need and minimise waste. Don’t buy more food than you need. Sell clothes that you don’t wear and generally try to declutter your life as much as you can.”
Many students and graduates live in shared accommodation as a way to save money. But this can make it difficult to organise utility costs. Some may decide to pay bills separately, from a joint account, put the responsibility on one person or use a bill-splitting service.
Ashley says: “Everybody needs to be fully aware of the utility costs so they can factor that into their budget and avoid overspending.”
However, if somebody doesn’t pay their share or bills are paid late, arguments could erupt and, if the shared account goes overdrawn, affect everybody’s credit score.
“To protect your credit score and make sure the process is efficient, use a bill-splitting service. This puts all payments into one monthly cost per person,” Ashley concludes.
Budgets need to be realistic and adjusted for the city you live in. You may need to alter your lifestyle and reduce nonessential spending to ensure you can afford important monthly obligations.