How to prevent debt in cities skylines?

Question

I've only played this game for a few hours and this is the first strategy game I've ever played, so go easy on me :)

I started, built roads, provided services, etc. the normal way, but for some reason, it seems like no matter what you do, because there is no standalone and definitive way of earning money, your income will become negative, no matter what, pulling you towards debt, which prevents you from building and providing, causing people to leave, further decreasing your income.

If you cut services, people will leave because you cut their services. If you increase the tax rate, people will leave because they won't afford it. So what should I do?

Buildings and services raise money, but in debt, you can't build anything. So, what is the solution?

I tried to carefully balance the taxes and budgets, but it only has minimal effect on the cash flow, and it doesn't rescue you from any debt.

Which one of these should I try to raise money without having to build? (except loans, bailouts, tax hikes, and service cuts) bulldozing parts of city to make it smaller? De-zoning roads?
Destroying districts?
making strict policies?
Which one? Any other solutions? Because tax hikes and service cuts only temporarily increase the cash flow, but do not rescue you from a -10K debt and -3000/week cash flow. What should I do?

Answer 1

I had this problem at first too, coming from a SimCity background where the costs were all different. But over time I've learned how to avoid going into debt.

It's as simple as not overbuilding at the start.

Most things you don't need right away. To begin with you need a power plant, a water and sewage system, and some roads to support a residential neighborhood and a small commercial/industrial segment. You can also immediately set the power and water budgets to 50% to halve the upkeep since a starting town won't use nearly as much power or water (though keep an eye on the power production as power consumption ramps up pretty quick).

A common mistake is overbuilding roads. Don't build too many roads or even the super expensive roads at the start, that's how you get high upkeep before you can support it. Your population 200 town can even work just fine on dirt roads, and you can go back later and upgrade them all to asphalt when you have the money.

Once you have this initial setup, just wait for people to move in, and only build what's necessary until your weekly income turns positive. With this small start, that should happen around 250-400 people (slightly more with the Snowfall DLC because you have to supply more power when it gets cold).

The first milestone you unlock allows you to set your city's taxes. You can safely up all taxes to 12% without any adverse impact on your city.

As you unlock milestones, more service buildings become available, but again, you don't need all of them right away. An early school helps out because education is required for the first three residential building levels and higher building levels generate more income. You'll also likely need garbage and police soon after you get them. Hospitals and fire you can hold off on for a while (until a fire breaks out). Cemeteries you don't technically need until you either have a dead person waiting for transport or a lot of seniors in your city. (The game doesn't seem to allow people to age to senior until after you unlock Cemeteries, so at the start you shouldn't have to worry about this.)

Essentially, as your city grows, make sure your services stay within your budget. If you only make a net of $100/week, don't build that extra service building unless it's absolutely necessary. Wait for your buildings to level up or more people to move in so you have a bigger income buffer before expanding your budget.

Once you hit the Big Town milestone and unlock high density zoning and the University (allowing residential to progress beyond level 3), your income should begin to skyrocket, and money will become far less of an issue.

Because most services have a big impact on land value, and a building running at 50% budget is actually only 25% effective, the only services I really adjust the budget for are power and water. If I have too many hospitals I'd rather just turn one hospital off temporarily instead of tweaking the budget, so it doesn't destroy the land value in my high-value districts. (I also up the hospital and garbage night budgets to 110-120% in larger cities so the service vehicles can keep up with demand when traffic is lower, but that's tangential to the saving money discussion.)

Answer 2

In short:

• Set tax rates to 12% (cims only complain from >13%).
• Don't overbuild services and expensive roads and buildings in the beginning. Build only what cims need until you hit at least the 3rd milestone and are making a profit.
• Adjust your budget sliders for things you are overproducing like water and power (maybe also fire and education) until you are in the green just above the yellow buffer zone, and keep adjusting them as the demand increases. When you need to be close to 100% budget to stay in the green is when you need to build the next one (power/water station, etc.)
• With education, reduce the budget but make sure capacity exceeds demand.
• In the beginning, as long as you have one fire station covering your industry and polluting power stations you should be fine even with a budget of 50%. Later you can enact smoke detectors in at-risk districts, increase budget if you experience fires, and increase service area when you need it.
• Make sure "your income exceeds your outgo (expenses), else your upkeep will be your downfall." That is as true in this game as it is in life. I.e. make sure you stay in the green by not building services/buildings that cost more to maintain than what you are making in tax revenue per month unless it is absolutely necessary to save your city. And if you do become low on income build more residential areas and other zones when the demand arises so your tax base increases, which is the main source of income in the early game.