Author Topic: How much $ would you need to profit (savings or earnings) to consider moving?  (Read 3010 times)

ShaneD

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Assuming all other things being equal, how much would you need to profit -- either through savings or additional earnings as a result of the move -- for you to consider moving to a new state/town? What's the dollar amount (say, annually) that to you would make moving worthwhile?

Or, if not a specific dollar amount, is there a percentage (say, of total annual spending) that you consider the sweet spot to make a move for?

Context for my asking: I've been doing a lot of relocation research and math lately, comparing certain LCOL areas that suit my and DH's living and working needs, but I'm finding that various factors are making many LCOL areas less low-cost than I'd originally expected. E.g., our current HCOL area is ridiculous when it comes to housing costs, and the cost of ACA health insurance here is also noticeably higher. But, once additional costs are considered that arise in some LCOL areas -- such as considerably higher state income taxes, additional or higher local taxes, additional property/use taxes, slightly higher grocery costs, car insurance, etc -- I'm finding the difference between the LCOL and HCOL areas is coming out much smaller than I'd hoped, generally ranging from approx. $0 (break even) to approx. $5000 (give or take).

At the top range, that extra $50,000 saved in 10 years is definitely notable. But at the same time, would I consider moving if I were offered a net $5000/year salary increase? I'm not sure.

There are certainly quality of life improvements in some areas, such as more housing and healthcare bang for the buck or other amenities. But talking purely financials, I wonder: what do you consider the "right" number to make moving to a new place worth your while?

BTW, we're debt-free and child-free, but I'm not including specific financials here as I'm not looking for specific advice so much as other's opinions and experiences to help guide our thinking process.

Thanks!

JLee

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I moved from a LCOL area (Phoenix AZ) to a HCOL area (NJ, just outside of NYC) for a ~60% raise (61k->97k + bonus) and twice the vacation time (2->4 weeks).  I still have a house in AZ so I had to take that cost into consideration as well; my napkin math gave me a rough $1k/mo net gain over where I was previously.

If I owned a house and was happy where I was, I don't see it worth moving out of state unless there was a 5 figure difference in pay (or corresponding benefits, or if I wanted to live in that area for some non-work reason).

Thinkum

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When I moved from SoCA to NTX, I did the same comparison and found, on paper, what appeared to be about a 24% COL difference in favor of TX. The bulk of that of course is in the form of housing costs. Coincidentally, my pay did not go down when I moved to this lower COL area. However, as you astutely pointed out, there are other costs that work to muck up the numbers. There is no state income tax here and sales tax is what CA used to be, but property taxes and insurance costs are higher than CA. The reason I moved was to pursue an opportunity, but more importantly, to live outside my bubble. We have been here just over 2 years now and we're still not sure if we are going to stay. There is a lot more than financial numbers behind a move, so if you're contemplating a move, be sure you have thought about all aspects. Family and friends are the things most people cite as reasons against moving and I would not discount that from your analysis. Good luck.

KisKis

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For us, it would have to be something obscene, like over a $100,000 increase.  I can't talk about it purely in financials, because there are so many emotional and social factors that affect how you view where you live.  We live in a LCOLA with children next to DH's parents who provide free childcare.  You can put a price on hourly childcare, but not on on the quality of young retired grandparents love. 

Before we had kids, moving to Alabama was a difficult choice for me.  I am originally from the Northeast and always imagined ending up in a city, so HCOLA.  My job offers in California were a heck of a lot higher than what I started out making here and I moved away from all my family and friends, but in the end I think it turned out all for the best.  DH's family is very closeknit and they are all locals, so we have a very strong support system.  I made new friends which would have happened anyways since we had kids younger than most of my college friends, and I do think the LCOL made a huge difference to our savings.  Yes, I would have made a lot more on the West Coast, but in comparing results with my cousins who live there and in other cities across the States and Canada, I think the move significantly increased my savings rate.  In dollar terms, my West Coast cousins have more, but percentage-wise when looking at expenses, we are in a much better position.  True, they could always retire and move from where they are now, but that is difficult leap to make all at once, though they talk about it every time they visit me and don't want to leave.  We bought a house for $350k before the recession that is larger and nicer than my cousin's $1.5M house in the Bay Area.  There are a lot of benefits to a smaller community, as well.  We have a great bartering system with our coworkers and friends, so that means free eggs, venison, garden vegetables, pool use, condo stays, etc. in exchange for DH's computer skills and fishing.

However, there are some tradeoffs, like our education system is clearly not anything to be proud of, and there is less exposure to other cultures and ideologies, but we do a lot of supplementing at home and travel about once or twice a year.  Maybe it is also possible to do what we have done in a higher COLA.  Never in a million years would I have imagined I would end up where I am now 15 years ago, but I have been here nearly 10 years now, and it's like a dream.  No regrets, and I am completely content.  I have almost completed my metamorphosis from social party girl to at-home dinner party homebody. 

TL;DR - We would move only if our new income allowed us to tough it out for 2-3 years before retiring fully and moving back home.

   
« Last Edit: December 04, 2015, 02:29:50 PM by KisKis »

cawiau

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After moving 3 times in 5 years and having finally settled in we came up with a #.... 40% raise for me to make it worth it.

Each time we moved it was for my career advancement but then it set my wife back (career wise) and it took her awhile to find a job 6-9 months.

Basically it would need to be enough to completely replace my wife salary! 


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norabird

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I think, personally, this is less about money factors than about what you are looking for in a place where you live, i.e. what the places are actually like and whether you would enjoy the location.

JLee

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I think, personally, this is less about money factors than about what you are looking for in a place where you live, i.e. what the places are actually like and whether you would enjoy the location.

In my case, I have no interest in living in NJ.  I'm in the early accumulation stages (and also only 3 years into this career) so establishing a high salary this early on will be beneficial down the road. I do hope to go back to Phoenix in 2-3 years. :)

mandy_2002

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I've only done relocations with my long term employer. The last time I moved it was to get away from the LCOL area that I had lived in for years.  I did get a COL allowance that diminishes for 4 years, and a 20% adder given to all employees here because it is obscenely expensive to live near San Francisco.  For me, moving is more about the area that I want to live in than the pay I'd get for it.  If I loved where I was, I'm not sure there'd be a number, and if I wanted to get out of where I was, I may even be fine with a loss (especially from a H to L - COL area). 

I'm in the process of joining the Peace Corps, which means I will basically be relocating to a foreign country (with better weather for me, cold and snowy/rainy) and taking a 95% pay cut.  The situation is completely different because I'll be FI couple months before leaving, so this is basically my first job in ER.  I see it as a positive move because it will teach me how little I really need to live.  I'm currently selling off and donating my stuff, and that is more liberating than I thought possible, especially considering my previous pack-rat ways.

Pigeon

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Honestly, I wouldn't move now for financial reasons.  We live in a place that has is medium cost of living.  It's a higher tax state, but that comes with good schools and a lot of other benefits.  I'm happy here for a lot of reasons and have no interest in moving.  I have lived in LCOL places but have found the downsides outweigh the financial benefits for us.

Rural

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 There isn't enough money.

ShaneD

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Thanks, everyone, for the time and responses so far. You've all brought up interesting points and perspectives. One of the current thoughts is moving for a while (still in accumulation phase), then moving back -- but then, of course, there's figuring in the cost of those moves vs. time spent x money saved... (Oy.)


I think, personally, this is less about money factors than about what you are looking for in a place where you live, i.e. what the places are actually like and whether you would enjoy the location.

This is definitely a part of our consideration process. It's hard at times to find that balance between considering the non-money factors and avoiding change (which tends to be uncomfortable), but my spreadsheet also includes all our necessary lifestyle requirements, plus mileage to family and friends, availability of transportation to family and friends, etc., in addition to the purely financial stuff.
« Last Edit: December 05, 2015, 10:11:20 AM by ShaneD »

seattlecyclone

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The closer I get to FI, the amount increases.

stlbrah

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I think, personally, this is less about money factors than about what you are looking for in a place where you live, i.e. what the places are actually like and whether you would enjoy the location.

Ditto. I live in a LCOL area with jobs, but I don't really like it. I would rather live somewhere with more exciting outdoor terrain and less crime in the nearby major city. I am envious when I read MMM articles about biking everywhere without getting shot or mugged, and hiking/biking nearby mountains.

That being said, I am not practicing what I preach since I haven't moved yet. Its hard to pick up and leave a comfortable lifestyle, but I will eventually.