Two Good Incomes in Separate Directions (rent or own)

[PolymathPaul]

We're both lower-middle-income earners. At or around $40,000/yr. Total combined household income is just under $80,000/yr. Or at least it will be next year.

Our challenge is this:

We both work in fields that have very specific locations. My $20k in student loans mean I can't leave my job, I just started it and being a utility company it's the headquarters for half the state. Despite her lack of debt, she can't leave her non-profit humanitarian job, it's the only one like it within 120 miles. We both need about 4 more years experience before we can comfortably pick-and-choose our living situation. That'll give me time to get my first "real" experience and pay down student loan debt, and it'll give her time to break thru her current salary ceiling (she'll be ripe for director-level positions.) Her increased salary and my lack of debt should allow us more flexibility in residency by that time. I'll be 32 and she'll be 29.

We don't like our current living situation. She drives 10 minutes and 4 miles to work. I drive 45 minutes and 40 miles to work. Our current apartment is a very boring suburb. Blah. We can't even walk to a bar, grocery, or church.

We could move to a nice, cheaper (rent and own), town that will split the commute for both of us. 25 minutes for me, 20 for her. Housing in this town ranges between $100,000 and $150,000 for a 2-3 bedroom 1-1/2 bath house built in the mid 20th century. Rental prices are actually a little bit more expensive than our current location ($1050) for similar housing.

We're wondering if in order to shed costs we should buy a short-term home in the "split" area with possibility of renting it out after 4 years, or we should just continue to rent, despite not getting any more house for our dollar in that area.

Any advice for the anti-commute but two-income household?

[PolymathPaul]

Note:

We're both former "Mustachians". When we first moved in together after college (4 years ago) we lived in a city with some of the lowest housing costs in the country, and could both ride bicycle to work. Unfortunately I got laid off from the only job in town I was qualified to do (a blue-collar manufacturing town with lots of engineers, something I am not!) and she had no salary or position growth opportunities and no vacation time. When I got laid off, we decided the time was right to move to an area with more opportunity (and longer commutes).   :(

[FlorenceMcGillicutty]

I'm no expert mustachian but I do share this problem. My husband works in one corner of our metro area and I work in the other corner. We decided to split the difference and moved in the middle. Now, we each have a 25 to 35 minute commute, which is actually pretty good for our area. We live in a neighborhood where we can walk to everything and it has good public schools for our kiddo. We paid a lot for the house but it's already paid off in time and walkability. That said, we're here for the long haul and won't sell our house for at least 10 years.

I think you just need to do the math on the commutes, walkability, rent vs. owning, etc. I think that will help clear up your decision.

[mm1970]

Is there a reason why she cannot bike to work her four miles?  I don't know the area or the bikeability or walkability.  That would help decrease miles on your car, or let you eliminate a car, that will save money.  If you move between the two places, you have to drive.

I've been thinking about this a lot lately. Job stability being what it is these days.  We bought our house 9 years ago and picked the location because it was between our two jobs, which were about 13 miles apart. I had a 12 mile bike ride to work and my husband had a 5 mile bike ride.  So he rode 3x a week and I rode 1-2x a week.  Then my husband changed jobs 6 years ago (previous company went out of business).  Long story short, we work 1 block from each other, 10 miles from home.  Boy I wish we lived in Goleta.  We wouldn't have to drive as much.

But housing markets mean it's not advantageous to sell and move.

You should consider the cost of commuting when you do the math.  For example, on a bike ride yesterday I was thinking about it.  We just started biking to work 1 day a week.  That saves 20 miles of driving.  (I bike to work, hubby bikes home).  If I buy a new car at $20,000, and I drive the car 100,000 miles before replacing it, then it's $1 for every 5 miles of driving.  This does not count gas, maintenance, insurance, etc. only the cost of the vehicle (most mustachians do better than this, but this made my math easy while biking.)

So each day of driving to work is $4 for cost of car alone and $3 for gas.  $7 a day to drive (plus maintenance). 

[Rebecca Stapler]

On the question of whether to rent or buy, see if this calculator is helpful: http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0

I don't think owning is always a good idea, especially when you know you want to move, or change jobs, in the next 5 years. Consider whether you want to be a landlord, and whether it'll be financially feasible in a few years.