Author Topic: CASE STUDY: Relocating to hometown in late 20s. Good idea?  (Read 5246 times)

ndannie

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CASE STUDY: Relocating to hometown in late 20s. Good idea?
« on: September 24, 2015, 08:35:36 PM »
Do they really say you can’t go back?  My husband and I have considered moving closer to both his and my family for about three years.  We’ve actually relocated during that time, but not back home!  Both of us travel for work, and honestly, I’m getting so burnt out.  We both want children and a family support network - and we just don’t have that here.  Although it is a great area, with lots of work opportunities for me and lots of outdoor activities for us.  It’s too bad our families aren’t here… but alas...

The root of our problem:  We’re both pilots.  Or, we used to be.  And I still want to be?

We couldn’t figure out how to both be pilots and have children, and the husband didn’t want a nanny.  (I guess I didn’t either!)  But I loved the career.  But how do you have both when you’re both gone all the time, and don’t live near family? 

So we decided to make a change.  I was given the opportunity to break into a slightly different industry as a project manager.  Great opportunity, right?  Compared to my old job, flying, deploying, teaching flight students... this is so, SO boring...  I should be grateful!  (That’s what I’m telling myself.)  And it pays well!  We thought moving here would allow me to travel less, be closer to family (we’re about a 6 hour drive), and have children soon.  Instead, I’m traveling 60 – 70% of the time, the hubby, who as an airline pilot is supposed to be gone more, is traveling about 50% of the time.  I’m burnt out, I’m homesick (for my house and also my hometown, and I just want to spend time with my aging grandparents while I still can.  Oh, and have kids.  And a career – which aren’t too plentiful in this field where we grew up!  So, the options are 1.) Stay in current location and stick it out.  Travel.  Try to enjoy life more, have more fun.  2.) Stay in current location and search for a new job.  3.  Move closer to hometown and spend time with aging grandparents, live on husbands pay, and wing it.  Honestly, this is sounding really, really good.  Are we crazy though? Quite possibly. Ha!

Thanks for reading.  Really looking forward to the advice…and bring on the punches!

Life Situation: Married, no dependents, we currently live in Alabama, would like to move to Kentucky or Indiana.  He’s 30, I’m 29.  We purchased our home in January of this year.

Gross Salary/Wages:
His yearly income:  $57,100
My yearly income: $76,500
Total income: 133,600
Monthly income: 11,100


Pre-tax deductions:
Medical, Dental, Vision: $260
401k: $1350
HSA: $50
Taxes: $2,145
NET Pay: $7295

Current expenses:
Mortgage: $641
Property Tax & Insurance: $100
Electric, Water, Trash: $150
Propane: $80
AT&T Internet: $59
Satellite: $35
Verizon: $145 (We can only get Verizon coverage in this rural area.)
Car Insurance: $115
Gas:  $150 - $400 (Depends on whether we drive 6 hours home or not. Otherwise, 50 mile round trip commute to work.)
Groceries/Household:  $500
Restaurants: $300
His Spending: $150 (This includes restaurant food while traveling. It’s a HUGE struggle for him to keep it this low.)
My Spending: $150 (Restaurant food while traveling.)
Clothing:  $200
Gifts:  $150 (Includes weddings, hotels for weddings, Christmas, birthdays, etc.)
Work Expenses:  $200 (Aircraft rental for 1 hour currency flight)
Airport Parking: $40
Medical:  $900 (This is killing us.  Husband has finally found a doctor he likes, with a medical condition that was 'supposed' to last 5 months.  Well, 5 months have passed, and the condition still exists.  This doctor is not covered with our insurance.)
Mower:  $105
Land Payment:  $300 (Great investment opportunity.  We could consider building a home there *if* we moved to Indiana.  If not, we could sell it for 3x what we paid for it).
Total Expenses:  $4720

Assets:
Savings:  $12,500
Vanguard Taxable:  $31,000
401k:  $115,000
Roth IRAs: $33,950
Total Assets:  $192,450

Real Estate:
Primary Residence:  $175,000
Land Investment:  $152,000
Total Real Estate Assets:  $327,000

2006 Acura: $10,000
2005 Tacoma: $14,000
Classic Car:  $25,000
Total Vehicle Assets: $49,000

Liabilities: [/b]
Primary Mortgage:  $136,900, 3.75% for 30 years, almost 1 year in
Land Mortgage:  $48,400, 4.00% for 3 years, and then variable for the remaining 17.  Plan is to have this paid off before 3 years.  Purchased 1 year ago.
Mower: $4,300, 0% for 5 years.  Couldn’t pass up the 0% loan.  6 months into loan.
Total Net Worth: $378, 850.

Overall, I think we’re doing quite well, but I know we have several areas we can cut.  Our quandary is whether or not to move home, and how I could possibly quit my job to have children.  I’m very concerned about the possibility of quitting my position, needing the income in a few years, and then not being able to find a new position.  That fear could very well be unfound.
 
Specific Question(s): 

1.) After reading our case study, do you think we could live on the lesser of the two incomes?  I realize we would likely need to pay off the land mortgage.  Also, the husband is slated to get a 30% pay raise later this year.  Cross your fingers!  Also, would it be financially possible to move home?
2.) Most of our taxable is sitting in a money market account.  What else should we do with this?  Right now, we’re hoarding cash for paying off the land and/or moving.
3.)  Any other glaring issues you can find? 

Thank you so much for reading!  Really appreciate any and all help y’all can give.
« Last Edit: September 24, 2015, 08:40:38 PM by ndannie »

MDM

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #1 on: September 24, 2015, 10:29:34 PM »
1.) After reading our case study, do you think we could live on the lesser of the two incomes?  I realize we would likely need to pay off the land mortgage.  Also, the husband is slated to get a 30% pay raise later this year.  Cross your fingers!  Also, would it be financially possible to move home?
2.) Most of our taxable is sitting in a money market account.  What else should we do with this?  Right now, we’re hoarding cash for paying off the land and/or moving.
3.)  Any other glaring issues you can find? 

ndannie, welcome to the forum.

1. At the current salary and expenses, no.  With a 30% pay increase and no 401k contribution and no change in expenses, just barely.
2. If you expect to pay the whole amount in the next few years, some online savings account (e.g., see http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001) paying ~1.05% may be best.  If you want to invest for a longer term (i.e., you don't care if the amount drops a lot over the next few years as long as the long term return is good), read http://jlcollinsnh.com/stock-series/ and https://www.bogleheads.org/wiki/Getting_started
3. Nothing glaring (beyond what you already commented on).  Some minor items below.  You might take the case study spreadsheet and do some "what-if?"s on your own.

Minor items:
Did you account for state tax? $2145/mo appears to be federal+SS+medicare, but does Alabama get you for ~$400 also?
Is that mower loan really 0%?  $4300 at 0% over 5 years = $4300/60 = $72/mo.

iwasjustwondering

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #2 on: September 25, 2015, 04:43:37 AM »
What is the cost of living in your hometown?  What would it do to your housing costs? 

I think you should go for it, especially if you can find some sort of work in your hometown.  Can you work remotely for your current company, in some capacity? 

Easye418

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #3 on: September 25, 2015, 07:32:24 AM »
Really holding on to those "late 20's" huh? heh :)

I say do what will make your life happier while continuing to focus on your retirement goals.  If moving is too damaging to your retirement goals, then don't do it.

ShoulderThingThatGoesUp

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #4 on: September 25, 2015, 08:13:06 AM »
...You have a $4300 lawn mower?

Also, $200 a month on clothing? What?

mozar

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #5 on: September 25, 2015, 01:54:24 PM »
I think you should move eventually because that's what you want, but I would cut back on those crazy expenses first and save as much as possible for the next couple years. You have some time before your eggs shrivel up and die.
Groceries and restaurants are $800? Wow. And if that $300 month payment for land in Indiana is such a great " opportunity" you should sell it and make your profit now. You can't be sure now that you want to live there, you might not even want to build your own house (and take care of kids at the same time).

ndannie

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #6 on: September 26, 2015, 03:38:30 PM »
Everyone, thanks for taking the time to respond.  You’ve given me such good advice!  Hopefully I can address some of the questions.

MDM - Thanks for the welcome!  I'm honestly not sure if I accounted for the state tax or not.  I definitely need to look into it!  Also, the savings account you mentioned looks interesting.  1.05% definitely beats the interest rate I current have.  Thanks for the tip.

Iwasjustwondering –  You asked about cost of living.  This would really depend on where we wanted to live.  Since we know many of the neighborhoods well, we could definitely pick a home in the 60,000-100,000 range.  If we chose to live on more acreage, the price would go up, but we could still very likely purchase a home on acreage for what we’re paying now.  With that said, taxes there would be higher.

And no, unfortunately I cannot work remotely!  That would be perfect.  Looking online, jobs in my career field aren’t too plentiful there either..

ShoulderThingThatGoesUp – Thanks for responding. :)  Yes, we have a $4300 mower.  With 3 acres and 68 trees, a zero turn mower sounded like a good idea.  Paying the kid next door was going to cost $120 month;  any other type of mowing service would just be financially out of the question. 

ndannie

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #7 on: September 26, 2015, 03:40:35 PM »
Dmy0013 – You’re correct – no debts on the cars, thankfully!  We saved and bought the Acura outright, and the Tacoma is paid off.  The land was purchased from an aging family member who offered an extremely good deal.  It was purchased for $75,000.  The day after we purchased it, we were offered $2,500/acre, which would have more than doubled our money.  For now, we plan to keep it.  Oh, and the clothing cost.  It’s business formal at my office, and I’m the only female.  My boss has already complained that “you obviously don’t like to shop.”  Too bad I’m not a guy who can just wear the same two suits and rotate dress shirts..

Mozar – Thanks for the response!  Do you have tips on reducing our budget?  It’s hard to believe less than 5 years ago we were living on $18,000 a year.  I guess that was before owning a house!  And before we had jobs traveling so damn much.  Guess that's life! Any tips on how to travel and not spend money on restaurants is very much welcome.  My husband already packs a cooler for his four day trips, but he often runs out of food.  His hotels are not often near grocery stores, and he has no access to a car.  The poor man’s got to eat!  At least that’s what he tells me.. ;)

TomTX

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #8 on: September 26, 2015, 04:00:25 PM »
So y'all just bought a house, and bought some land.... a year later you want to bail? Front end load and back end load on real estate will kill you.

Figure out what you want to do. Then commit to it.

ndannie

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Re: CASE STUDY: Relocating to hometown in late 20s. Good idea?
« Reply #9 on: September 26, 2015, 09:41:42 PM »
So y'all just bought a house, and bought some land.... a year later you want to bail? Front end load and back end load on real estate will kill you.

Figure out what you want to do. Then commit to it.

Well, we're considering it!  Honestly though, once we paid at least $850 rent (which is the same we pay for the mortgage, property taxes, and interest on the house), whether we keep the house after two years or sell we're coming out even.  Possibly even several thousand ahead.  We made $69,000 on our last house, and although we won't make that much on this one, we wouldn't end up even remotely behind on this one either.  That's barring a major financial collapse, in which case we'd definitely re-evaluate our options and quite possibly stay in this area.

We would consider moving in a year, or 18 months.
« Last Edit: September 26, 2015, 09:46:28 PM by ndannie »