High Rent Vs Commuting Dilemma

[MrStinky]

Hello everyone. I'm a longtime reader of Mr. MM, (the better part of the last decade now!) but this is my first time posting here. I have a bit of a question of what to do moving forward with a life-change. I would appreciate any insight you might feel like sharing.

I'm 24 years old, and I have lived in a small town my whole life (under 10k population), and I just recently got a job in a larger town (175k< population) 38 miles away. The job is part-time at $21/hour, with overtime kicking in after 25 hours, and about 27-33 hours/week during the normal season (right now it is peak season, so 48 hour weeks are the norm for the next month).

I currently live with my family, with a monthly living expense cost of around $250/month in shared rent/utilities. I've been shopping for an apartment in the larger town while doing the dreaded, terribly inefficient 2-hour roundtrip commute, six days a week.

One place I found is nearly perfect. It's a quiet, gated complex with modern, well-kept residences, 2 miles away from work, and about two blocks to the grocery store and the bank, as well as several other local stores and attractions. It would be the perfect place to live and work, without the need for using a car at all, save for the occasional weekend trip to visit family and friends in my hometown.

The problem is, this apartment is really expensive. $1200/month for a one-bedroom, probably closer to $1350 when you add in the cost of utilities. My initial plan was to find a roommate and a get a two-bedroom place, and just split the cost. A two-bedroom is $1500/month, so it would only be around $750/month per person, with maybe an extra $100 each for utilities. No-brainer right?

The problem is, I haven't had much luck finding a roommate. I've hit up friends I know, some of whom actually do this same crazy commute, and no one is interested in moving, much less getting a place with me. I've advertised on Facebook & Craigslist, asked around at work, tried finding people on that one roommate finding website called "Roomies" and no luck. This has been going on for a couple of months now, and it has made me kind of antsy, because I know this commuting habit isn't healthy or long-term sustainable, but I'm feeling a little stuck.

I've also looked at other listings, in some cases like a private room for rent out of a house, but they all have turned out to have had one thing wrong with them or another. There was this one really nice gentleman who had a place in the heart of downtown, walking distance to everything, including a park on the riverside, and I could stay there for $800/month, all included. The only reason I didn't pull the trigger was it was too far to bike to work, and I would have still had to do 40 minutes of driving every day for work. I almost feel like I might have been being a little too picky in that case, but it's too late now either way...

Anyway, I've been reading some of Mr. MM's articles lately on renting vs. buying, valuing your time, etc. With the part time hours, I'm currently getting, I can take home around $2250/month on average, and most of it I've been stashing into an IRA. With these peak season hours, that number has nearly doubled at closer to $4k/month. This has made me wonder if maybe it would actually be feasible to try getting the one-bedroom and toughing out the high rent on my own, maybe take on some extra-shift work during the lower season, if it is available.

In a couple of years, when I'm promoted to full-time, I'll be earning enough to (theoretically anyway) live anywhere I wanted, but in the meantime, these are the numbers I'm working with. I could really use some input from like-minded folks on what to do because I honestly feel both torn and a little stuck. I want to cut out the commute asap, but I'm not having much luck in the roommate game, so I really don't know how long it will take to find someone suitable. I just am having a hard time justifying getting a one-bedroom place and seeing my living expenses balloon to 5x their previous cost. I know that when you factor in the elimination of nearly all of my automotive costs and the literal 48 hours a month I spend behind the wheel that it might change things... but by that much?

Unfortunately, my friends & family are not part of the mustache community. When I told my BFF about my potential move, the first words to come out of his mouth were "Whaaaa? I can't imagine throwing away $1500/month in rent, why wouldn't you just buy a place?"

So, that is my situation, and I would love to hear from you all, if you have any thoughts. Should I keep looking for a roommate and tough out the commute and damage it is doing in the meantime? Should I get the incredibly expensive one-bedroom and work more/save less to make up the difference? Should I look a little harder at alternative places further from work? Some creative different solution I haven't discovered yet?

Thanks everybody!

~Mr. Stinky

P.S. I apologize for the rambling nature of this post, I indulged in a little hemp before writing, so it is somewhat difficult to organize my thoughts out all nice and neatly. ;)

[Tasse]

The IRS mileage reimbursement rate is $0.655 per gallon; that's meant to include the cost of gas and wear and tear on your car.

At that rate, your commute is 38 miles x 2 directions x $0.655 = $49.78 per day, $248.9 per week, or about $1000-$1200 per month.

Now, you can do better than this with efficient driving, cheap gas, and DIY maintenance, but it's a good starting approximation. So you're comparing:

Now: $250 housing costs + $1000-$1200 commute costs = $1250-$1450 total
Proposal: $1350 housing + $0 commute costs = $1350 total

This analysis suggests that you literally are not saving any money over that expensive alternative right now--it's just that you are deferring those costs to future car maintenance.

This is before accounting for the value of your time: 2 hours per day, 10 hours per week, 48 hours per month (according to you). Would you pay $100 per month for 48 hours of time? Buying back your own time at $2 per hour? I would.

For reference, if you drive twice as efficiently as the IRS estimates, pulling your commute cost down to $500 per month, the difference in cost would be $600 for 48 hours of time, or buying it back for $12.50/hour.


Another way to look at it is to recalculate your hourly wage with that extra commute.

• 25 hours * $21/hour = $525 per week. Actual hours are 25 working + 10 commute = 35, for a real wage of $15/hour.
• 35 hours = 25 * $21/hour + 10 * $21/hour * 1.5x overtime = $840 per week. Actual hours are 35 working + 10 commute = 45, for a real wage of $18.67 per hour.
• 45 hours = 25 * $21/hour + 20 * $21/hour *1.5x overtime = $1155 per week. Actual hours are 45 working + 10 commute = 55, for a real wage of $21 per hour.

You are never actually making overtime pay here. During the busy season, your overtime pay just barely cancels out the extra time you are putting into commuting. During the slow season, this commute is equivalent to accepting a $6/hour pay cut--or alternatively, eliminating the commute gives you a $6/hour pay raise.


That's all great, but it sounds like you aren't actually sure if you can afford it. $1350 is over half your income on a slow month. Practically speaking, apartments often require you to prove that you make enough to afford to live there, which usually means income of 2x or even 3x rent. They will probably ask to see a recent pay stub.

And locking in high housing costs is going to hinder how much you can save for a long time. This is the area to optimize most aggressively for the biggest financial gain, just because it's the biggest chunk of your budget. Basically, I agree that you need to cut out that commute ASAP, but you're also probably right that the expensive apartment isn't realistic right now.

So some options that I see:

• Keep looking at other listings. Private rooms in houses are some of the cheapest rent you can get.
• Rent somewhere in between for cheaper. Could you reduce your commute to only 10 miles? That would pull your commute cost down to $13 per day or about $315 per month, which means any rental cheaper than about $900 would still be an improvement.
• Get another job in the slow season. You are thinking about regaining 10 hours per week; make money with it. I would not commit to the expensive housing based on this without a very clear and realistic plan, though.

You didn't mention if buying a place is a practical option for you, but if you want to compare, I like this calculator: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

[simonsez]

Do you have a fuel-efficient vehicle? How hard/easy are those 38 miles? High traffic? Traffic lights? Interstate/median-divided with high speed limit? Sounds not great if it takes an hour.

How is the situation at your current home? Does your family want you out? Do you want out? Do you have to be out by a certain age?  How subsidized is that $250/mo?

%50 of take-home pay toward rent in a typical month is very high. A gated complex sounds pretty fancy for someone in their 20s.  After all, MMM says safety is an expensive illusion.  Can you find something in a good location that's cheaper?

Also, IRA limits are only 6500 now and 7k next year. You may need additional investment vehicles if you're really saving the majority of your take-home pay into an IRA.

[SunnyDays]

Can you carpool with others who are making this commute?  Less expensive and less driving for you even if you all take turns using your own vehicles.

[Samuel]

You're right in wanting to get away from that commute but don't let frustration lead you into doing something stupid. That nice 1BR is just too much of your monthly income to make sense and doesn't leave room for both hefty MMM type savings and a social life (which, as a 24 year old new to "big city" life should be a consideration).

Best case scenario to me would be renting a room in a big house with other 20 somethings. Make friends and work a bunch. Have fun AND stash money. Sitting alone in a nice apartment unable to afford both (or maybe either) of those things sounds like a bit of a waste at your age.

Also, it should go without saying that you'll want to have a good cash cushion in a high yield account before working on filling IRA's. No job is 100% secure so at least consider what your life would look like if this particular job goes away. Hint: it's much easier if your housing is 7-800 a month than 12-1300...

[Tasse]

Can you carpool with others who are making this commute?  Less expensive and less driving for you even if you all take turns using your own vehicles.

Great suggestion.

[314159]

You are right that living with roommates the financially appropriate thing to do here, and it sucks that you're having such trouble finding any! Do you have the sense that if you keep looking at listings or posting your own you may eventually find a shared house (or a roommate to move in with you) that check the right boxes?

Do you know where your peers of similar age and income are living, the ones who aren't commuting from your small town? Might be worth learning.

[Paper Chaser]

Part time jobs are for people that only need a small income stream. They're not meant to support an individual living on their own, trying to build a life for themselves. It sounds like an ok job if you're spending your off time going to school to earn more income in the future, or if it's a side gig to generate some extra cash for a short time. It sounds like a terrible job to build a life around, which is what you'd be doing by moving and hoping to one day transition to full time.

Commutes are only worth it if you're making a lot of money by working far from home, or saving a lot of money by living far from work. If you want to move out of your family home, or out of the small town, that's totally reasonable for a 24 year old. But you will struggle to build a life on nothing but a part time job paying $21/hr. Hoping for the job to transition to full time in a few years is wasting years of your prime in a low paying, dead end job.

Don't move to an expensive place based on income from a part time job.
Don't commute long distances (or times) for a part time job that pays $21/hr.
You won't actually get ahead in either case.

That commute probably costs you $25-50 per day. So a couple of hours of after tax wages go straight to paying for travel to/from work. Financially speaking, you'd likely be better off staying at home a bit longer and finding a job closer to home, even if it pays a bit less.

[LifeHappens]

If I am correct about the type of job you have (part time, but currently massive overtime during peak season), you have some expectation of moving into full-time. Do you have any idea how long that might take?

[orcateeth]

You really cannot afford to be paying typical rent on your part-time wages. The apartment you were looking at in the gated community is way out of your price range, as well as out of your need level. That's for  people who are established in their job (working full-time in a professional job, not part-time in a fluctuating hours or seasonal type job).

Landlords and property management companies generally require three times the rent as monthly income so you would not qualify anyway.

Also, be aware that a roommate may or may not be a viable solution long-term. They could suddenly move out, stop paying, lose their job or just be too unpleasant to share a space with. You will have to pay the full rent if they are not paying their half. Otherwise your credit will be damaged.

Be aware that each person is "singularly responsible" for the full rent as far as the landlord is concerned. They don't care who is there or not - they want their full rent on the first of the month, or they will file for eviction.

You said you looked at rooms for rent, and that would be your most viable solution if you really want to move out. Try placing an ad saying that you are looking for a room to rent, not just looking for people who are advertising their rooms for rent.

Your best bet is just keep commuting, until you either raise your salary or find a cheap place to live. Plenty of people drive an hour each way, for years.

All financial advice is not feasible for everyone. Something like baking your own bread is something that anyone can do; it's cheap. But moving close to work assumes that you can afford the rent close to work. So it's biased towards higher income people.



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[patchyfacialhair]

Keep looking for a winner in the rent-a-room department. Don't anchor yourself to thinking the 1BR is the only way to go.

Also, don't discount the time spent with family. I imagine living alone could be isolating. I lived with my folks for most of my undergrad and while I didn't love it at the time, it allowed me to set myself up financially to where I am today. Just something to think about.