Talk to Me About Cost of Living

[oldtoyota]

My story in brief: I live in an expensive area. We bought an inexpensive home. We take advantage of lots o' free things like free DC museums, parks, nature centers, etc for entertainment. I telecommute and spend little these days on commuting and work clothing.

So, why do people make sweeping generalizations that the east cost--DC to Boston or so--is expensive and it's not a good place to live?

My guess is because the majority of people spend money trying to keep up with their neighbors or spend money because they don't think about how much they are spending.

Here's the thing I don't get. In DC, I have always been able to get a job. I have considered Boulder, CO and other similarly sized towns. The problem is a lack of jobs. It might cost less--I assume most savings would be from taxes since homes/groceries do not cost less--yet it would be hard to find a decent-paying job. I have friends in Boulder--and the houses are SO EXPENSIVE!!--and some drive an hour to their jobs after not being able to find jobs close to home.

Have you moved from low to high COLA or high to low COLA? What have you experienced regarding this?

Overall, I find that it's only expensive if people make certain life choices. Meanwhile, we have access to amazing museums and free tours of government buildings (like the Capitol) and have easy access to other interesting metro areas like Baltimore, Raleigh, and New York.

What are your thoughts?

[lauren_knows]

Because I live in the suburbs of DC, I'd love to know what "inexpensive" is to you, and where you bought.

I live in a nearly 50yr old townhome, and it's ~$410k today.  It is by no means extravagant.  On Redfin.com right now, I can count on 1 hand the number of homes that are 3bdrm and <$300k on this side of the Potomac.  I don't think it's 3 bedrooms is a completely outlandish request for a family of 4, and I don't really mind smaller places.   I don't consider >$300k "inexpensive" generally.  Relative to this area, most certainly.

Though, this all may come off as complainypants. I love the area, what it has to offer... and of course the job market is awesome, as you suggest. But, for FIRE, I hope to move somewhere cheaper.

[whammer33024]

i live in iowa...we have a 3 bedroom house, a 2 stall attached garage and a 40x20 detached garage.  we paid 120k for it last year

[Basenji]

What's an "inexpensive" home? We love the area, but our home is the biggest obstacle to FI. We will work a few more years and then have to move. I hate it, I love my house, friends, neighborhood, but we didn't buy here 20 years ago.

[Deepsouth]

I actually moved from Colorado Springs to Alabama.  Now I also spend 1/3 my time in Florida.  I found the cost of living down south to be much much more reasonable.  I noticed that the higher end jobs here seem to pay about the same as other more expensive states.  I'm a huge believer in low cost of living states, especially if you can be near their capital (for jobs).  Colorado was ridiculously expensive in comparison to the 3 southern states that I have lived in.  I don't know how they do it on 2k per month.  GL

[zataks]

I moved from an area that was very near the national average COL to a place that it 140% the national COL.  But I've found the biggest expense is housing, all the rest isn't much more expensive.  Food seems cheaper even because so much more is grown near. 

Also, same job field in essentially the same capacity and making over 2x what I was in the lower COL area.  So well worth it to me.  (and also because I'm much closer to the ocean, which is what I wanted so COL was less of a factor).

[oldtoyota]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

[hybrid]

Because I live in the suburbs of DC, I'd love to know what "inexpensive" is to you, and where you bought.

I live in a nearly 50yr old townhome, and it's ~$410k today.  It is by no means extravagant.  On Redfin.com right now, I can count on 1 hand the number of homes that are 3bdrm and <$300k on this side of the Potomac.  I don't think it's 3 bedrooms is a completely outlandish request for a family of 4, and I don't really mind smaller places.   I don't consider >$300k "inexpensive" generally.  Relative to this area, most certainly.

Though, this all may come off as complainypants. I love the area, what it has to offer... and of course the job market is awesome, as you suggest. But, for FIRE, I hope to move somewhere cheaper.

Because I live in Richmond, a mere 100 miles south, where my 2400 SF brick rancher in a nice neighborhood with middling schools might fetch 180 in today's market (perhaps 250 in a neighborhood with great schools), I also want to know how supposedly inexpensive OPs home is, because I would be willing to wager it is nowhere near as inexpensive as mine on a SF basis, and Richmond has no lack of good jobs.

I simply cannot imagine living in the DC area without an enormous bump in pay. I have friends that do, and I have always found the real estate market there jaw-dropping. All the day-to-day stuff is pretty much the same or maybe 10% higher it seems. And I haven't even addressed local taxes. I always have the same thing to say - move to Richmond. One couple actually did that. They never looked back. I had lunch with him today, he thinks he is a Richmonder for life now.

EDIT: OP and I posted back to back, now see that her home costs roughly the same as mine, but don't know about type or size or location.

[hybrid]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Did you mention in another post that you are in a newly gentrified part of the city?

[lauren_knows]

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though.

You're not off base. <$200k seems crazy.  How many bedrooms? Is it a condo? Are you in Maryland?

I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

I think $1M is obviously nuts, but if you're looking for a SFH in NoVA, you'll be hard pressed to spend less than $400k. We're hoping to pay less than $500k when we look for SFH's next year, and we're going to throw an extra large downpayment to lower monthly costs.  I tend to just think that our expensive home is another saving vessel that we'll tap when we get to FIRE.

I think that housing is the #1 detractor for me, when it comes to living in DC and trying to save for FIRE.  It is especially frustrating because where I grew up, you can buy a house right now for $50-70k.  Now, after living in a place like DC with so many things to do, I probably would never move back to my hometown... but it's disheartening to say the least.

[beltim]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Do you think you could get your house that cheap now?  Bo's response suggests no.  Also, if you're in a newly gentrified part of DC then comparisons to big, expensive suburbs in Boulder aren't accurate.  You'd need to compare to a similar environment (Baltimore or Richmond would be better comps than Boulder)

[hybrid]

Dumb question: is there a one stop website that measures the COL?

Here is one that compares.

http://money.cnn.com/calculator/pf/cost-of-living/

Comparing a Richmond salary of 100K to Washington DC nets this:

Comparable salary in  Washington-Arlington-Alexandria, DC-VA    $137,968

Price difference in Washington-Arlington-Alexandria, DC-VA

Groceries
11%more

Housing
179%more

Utilities
5%less

Transportation
6%more

Health Care
7%less

[Mrs. PoP]

You telecommute.  What's to stop you from telecommuting to this same high paying job while living in an area with significantly lower taxes and cheaper housing? 

We have two friends who recently moved to our area of FL and continue to telecommute to their jobs over a thousand miles away while having their paychecks be something like 10% higher than they were when they were local to their jobs (due to lack of income taxes).  Besides that, they get to "leave work" and can be at the beach in a few minutes in January instead of trudging home through snow. 

Dumb question: is there a one stop website that measures the COL?

I like expatistan: http://www.expatistan.com/cost-of-living
But it doesn't account for differences in income taxes, so you'd have to add those in yourself.

[lauren_knows]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Do you think you could get your house that cheap now?  Bo's response suggests no.  Also, if you're in a newly gentrified part of DC then comparisons to big, expensive suburbs in Boulder aren't accurate.  You'd need to compare to a similar environment (Baltimore or Richmond would be better comps than Boulder)

Well, I'm guessing that oldtoyota lives in a different part of the DC suburbs that I do.  There is the Northern Virginia side, the Maryland side, and DC proper.  Typically, Northern VA and Maryland west of DC is more expensive (as well as DC itself if you want a SFH), while Eastern/Southern Maryland is cheaper.   

[oldtoyota]

Because I live in the suburbs of DC, I'd love to know what "inexpensive" is to you, and where you bought.

I live in a nearly 50yr old townhome, and it's ~$410k today.  It is by no means extravagant.  On Redfin.com right now, I can count on 1 hand the number of homes that are 3bdrm and <$300k on this side of the Potomac.  I don't think it's 3 bedrooms is a completely outlandish request for a family of 4, and I don't really mind smaller places.   I don't consider >$300k "inexpensive" generally.  Relative to this area, most certainly.

Though, this all may come off as complainypants. I love the area, what it has to offer... and of course the job market is awesome, as you suggest. But, for FIRE, I hope to move somewhere cheaper.

Because I live in Richmond, a mere 100 miles south, where my 2400 SF brick rancher in a nice neighborhood with middling schools might fetch 180 in today's market (perhaps 250 in a neighborhood with great schools), I also want to know how supposedly inexpensive OPs home is, because I would be willing to wager it is nowhere near as inexpensive as mine on a SF basis, and Richmond has no lack of good jobs.

I simply cannot imagine living in the DC area without an enormous bump in pay. I have friends that do, and I have always found the real estate market there jaw-dropping. All the day-to-day stuff is pretty much the same or maybe 10% higher it seems. And I haven't even addressed local taxes. I always have the same thing to say - move to Richmond. One couple actually did that. They never looked back. I had lunch with him today, he thinks he is a Richmonder for life now.

EDIT: OP and I posted back to back, now see that her home costs roughly the same as mine, but don't know about type or size or location.

To answer your question, my SQF is lower than yours. I am not sure of the precise SQF, but it's under 2,000. I view that as a plus, though, because my utilities are low and I don't have as much to keep clean.

I would move into a smaller house, yet the ones I've found cost MORE. LOL.

[beltim]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Do you think you could get your house that cheap now?  Bo's response suggests no.  Also, if you're in a newly gentrified part of DC then comparisons to big, expensive suburbs in Boulder aren't accurate.  You'd need to compare to a similar environment (Baltimore or Richmond would be better comps than Boulder)

Well, I'm guessing that oldtoyota lives in a different part of the DC suburbs that I do.  There is the Northern Virginia side, the Maryland side, and DC proper.  Typically, Northern VA and Maryland west of DC is more expensive (as well as DC itself if you want a SFH), while Eastern/Southern Maryland is cheaper.

Yes, I'm very familiar with the area. And that's sort of my point - comparing SE DC to expensive Boulder suburbs would be crazy - you'd have to compare it to a similar neighborhood, especially crime and schools.

[oldtoyota]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Did you mention in another post that you are in a newly gentrified part of the city?

Sort of. It's a mixed bag. I live in what is/was a blue collar neighborhood.

 

[hybrid]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Do you think you could get your house that cheap now?  Bo's response suggests no.  Also, if you're in a newly gentrified part of DC then comparisons to big, expensive suburbs in Boulder aren't accurate.  You'd need to compare to a similar environment (Baltimore or Richmond would be better comps than Boulder)

Well, I'm guessing that oldtoyota lives in a different part of the DC suburbs that I do.  There is the Northern Virginia side, the Maryland side, and DC proper.  Typically, Northern VA and Maryland west of DC is more expensive (as well as DC itself if you want a SFH), while Eastern/Southern Maryland is cheaper.

Yes, I'm very familiar with the area. And that's sort of my point - comparing SE DC to expensive Boulder suburbs would be crazy - you'd have to compare it to a similar neighborhood, especially crime and schools.

My grandparents old neighborhood near downtown Richmond has some very large homes in it, and is in the very beginning of the gentrification process. Yep, you can get quite a lot of house for the money. There's good reasons why, of course....

[oldtoyota]

I used to live in FL and lived cheaply as a student. What I noticed, though, was that the college towns did not have many jobs. The jobs focused on skills I did not have--doctor, nurse--or were low paying general office jobs.

It might be different if I tried to move to FL with my current skill set. It's something to consider.

My home cost less than $200K, which I think is pretty good for the DC area. Let me know if you think I'm off base though. I see people willing to pay $600K or $1MM for a splt level 3 BR and think that is nuts.

Do you think you could get your house that cheap now?  Bo's response suggests no.  Also, if you're in a newly gentrified part of DC then comparisons to big, expensive suburbs in Boulder aren't accurate.  You'd need to compare to a similar environment (Baltimore or Richmond would be better comps than Boulder)

Well, I'm guessing that oldtoyota lives in a different part of the DC suburbs that I do.  There is the Northern Virginia side, the Maryland side, and DC proper.  Typically, Northern VA and Maryland west of DC is more expensive (as well as DC itself if you want a SFH), while Eastern/Southern Maryland is cheaper.

Yes, I'm very familiar with the area. And that's sort of my point - comparing SE DC to expensive Boulder suburbs would be crazy - you'd have to compare it to a similar neighborhood, especially crime and schools.

I don't live in SE. FYI: I am not directly comparing Boulder to SE DC. First, I don't live in SE DC. Second, Boulder was just an example since MMM has said CO has lower taxes than some states in the east. I was using that as an example to mention lower state taxes, but I probably was not clear enough in my post.

[oldtoyota]

I think that housing is the #1 detractor for me, when it comes to living in DC and trying to save for FIRE.  It is especially frustrating because where I grew up, you can buy a house right now for $50-70k.  Now, after living in a place like DC with so many things to do, I probably would never move back to my hometown... but it's disheartening to say the least.

Ha! I am a little embarrassed to admit that I did not even know one could FIND a home for $50-70K until someone else mentioned such a possibility on this board. Where is your hometown...if you don't mind saying.

[beltim]

I may have overly focused on that part of your post. I guess my larger point is that cost of living comparisons are done on distributions. So, for example, it seems like you found a great deal on a house.  Maybe that's 5th percentile cost. The best comparison to housing in other areas for you would be to look at 5th percentile costs in other areas. This is a hard calculation to do, so most people use averages or medians.

To answer your audience participation question, I've moved from a high cost of living area, to low, to high, to low again. And not everything is monotonic - local produce is usually a better deal than imported. But in general, most prices follow the trends of housing, even if housing differences are greater.

[oldtoyota]

Dumb question: is there a one stop website that measures the COL?

Here is one that compares.

http://money.cnn.com/calculator/pf/cost-of-living/

Comparing a Richmond salary of 100K to Washington DC nets this:

Comparable salary in  Washington-Arlington-Alexandria, DC-VA    $137,968

Price difference in Washington-Arlington-Alexandria, DC-VA

Groceries
11%more

Housing
179%more

Utilities
5%less

Transportation
6%more

Health Care
7%less

This is great info and supports what I was thinking about living in DC. I don't use much in the way of transportation or utilities. My housing is cheaper than most. This is why I am feeling immune to the expensiveness of this area.

The grocery category probably affects me the most. However, I have been traveling through the Midwest for a few weeks now--towns of about 150K people or so--and find that the prices for some of my standard items at the groceries here are MORE than back in "expensive" DC.

Could I find a home at this same price? Maybe cheaper. Another 3br/2ba went for $160K in the past year. Some are going for over $200K though. Last fall, I found a home I liked in a slightly better 'hood for the same price I paid for mine. Very tempting, but I decided not to buy it.

This seems to support my half-baked theory that a high COL does not have to affect one if one makes certain choices in life.

Richmond is cool by the way. I like your art museum. Great Egyptian collection.

[oldtoyota]

I may have overly focused on that part of your post. I guess my larger point is that cost of living comparisons are done on distributions. So, for example, it seems like you found a great deal on a house.  Maybe that's 5th percentile cost. The best comparison to housing in other areas for you would be to look at 5th percentile costs in other areas. This is a hard calculation to do, so most people use averages or medians.

To answer your audience participation question, I've moved from a high cost of living area, to low, to high, to low again. And not everything is monotonic - local produce is usually a better deal than imported. But in general, most prices follow the trends of housing, even if housing differences are greater.

That's interesting. What you're saying seems to connect to a book Nords recommended--The Two Income Trap by Elizabeth Warren. She focuses more on how housing prices are tied to good school system and that causes couples to get trapped into living off of two incomes instead of one. Your statement is not *directly* connected to her book's thesis, yet the idea of prices following the trends of housing seems to be at least a bit connected to what Warren talks about.

[lauren_knows]

I think that housing is the #1 detractor for me, when it comes to living in DC and trying to save for FIRE.  It is especially frustrating because where I grew up, you can buy a house right now for $50-70k.  Now, after living in a place like DC with so many things to do, I probably would never move back to my hometown... but it's disheartening to say the least.

Ha! I am a little embarrassed to admit that I did not even know one could FIND a home for $50-70K until someone else mentioned such a possibility on this board. Where is your hometown...if you don't mind saying.

I will, even though you are conveniently not telling your exact neighborhood :)   (I'm not trying to beat up on you, I swear).

I grew up in Rochester, NY  (Western New York... not "Upstate"). It can be amazingly cheap to live there, but doesn't exactly have the vibrancy of a city like DC.

[beltim]

I may have overly focused on that part of your post. I guess my larger point is that cost of living comparisons are done on distributions. So, for example, it seems like you found a great deal on a house.  Maybe that's 5th percentile cost. The best comparison to housing in other areas for you would be to look at 5th percentile costs in other areas. This is a hard calculation to do, so most people use averages or medians.

To answer your audience participation question, I've moved from a high cost of living area, to low, to high, to low again. And not everything is monotonic - local produce is usually a better deal than imported. But in general, most prices follow the trends of housing, even if housing differences are greater.

That's interesting. What you're saying seems to connect to a book Nords recommended--The Two Income Trap by Elizabeth Warren. She focuses more on how housing prices are tied to good school system and that causes couples to get trapped into living off of two incomes instead of one. Your statement is not *directly* connected to her book's thesis, yet the idea of prices following the trends of housing seems to be at least a bit connected to what Warren talks about.

Within a given metropolitan area, I think this is spot on.

Regarding your experience about food staples in the midwest, there's also an issue of what is popular in a region is often less expensive, due to economies of scale.  It's a lot easier to get Kosher food in NYC, Mexican ingredients in Southern California, or Somalian food in Minnesota due to local preferences.  If you actually live in the midwest, you'd probably change the distribution of what you cook.

[Helvegen]

I've looked at the incomes to housing prices in many HCOL areas, including the one I live in, and I just don't get it. The incomes are higher than the LCOLA I am originally from, but nowhere near high enough to justify what housing costs in many areas in or surrounding the HCOLA. It is a big part of the reason why I am not living permanently in this area. I think it is a great place to live and think everyone who wants to should try living here awhile, but I am not paying upwards of $700k to have a house around where I work or have a 2 hour commute to anything I could maybe, somewhat, stretching it afford.

Some other things that were significantly more expensive when I moved from my LCOLA to a M-HCOLA:

Car insurance
Health insurance
Name brand Coke (no idea what this is about)
Alcohol is taxed all the way to hell and back
Daycare
Supermarkets before Winco opened.
Airport terminal parking
In-state college/university tuition
Water/sewer

Two of the only financial advantages are that there is no state income tax and the job market is much better.

But I didn't move here for financial reasons and definitely do not regret it. I will be leaving here in a few years for financial/family reasons though.

[oldtoyota]

You telecommute.  What's to stop you from telecommuting to this same high paying job while living in an area with significantly lower taxes and cheaper housing? 

We have two friends who recently moved to our area of FL and continue to telecommute to their jobs over a thousand miles away while having their paychecks be something like 10% higher than they were when they were local to their jobs (due to lack of income taxes).  Besides that, they get to "leave work" and can be at the beach in a few minutes in January instead of trudging home through snow. 

That's what I did.  Moved from high COL Philly burbs to FL a couple years ago since I can telecommute from anywhere.  The income tax savings alone has been huge.

Good question! One answer is that my employer is savvy to the savings they, too, can reap from me living in a lower COL area. They will reduce my salary accordingly--or so HR has said. I am not 100% certain they keep good track though.

A second is that my spouse has the dream job with summers off. However, I think his job costs us $$. The pay is low for DC. If we stay in a high area for this low paying dream job, it is costly. Then, we get into weighing life happiness versus $$. He REALLY loves his job and has wanted to do this work his whole life and will probably keep working as long as he can.

There's a possibility we could spend summers elsewhere and work out some way to live...I would need to figure that one out.

[oldtoyota]

This is great info and supports what I was thinking about living in DC. I don't use much in the way of transportation or utilities. My housing is cheaper than most. This is why I am feeling immune to the expensiveness of this area.

Could I find a home at this same price? Maybe cheaper. Another 3br/2ba went for $160K in the past year. Some are going for over $200K though. Last fall, I found a home I liked in a slightly better 'hood for the same price I paid for mine. Very tempting, but I decided not to buy it.

This seems to support my half-baked theory that a high COL does not have to affect one if one makes certain choices in life.

What it told me was if I had bought my house in 1999 (or another house in my neighborhood) rather than in 2008 I'd be FI. Sigh. And I wouldn't care about the other COL issues because they are minor. So COL matters a lot on one's timing. I got a relative deal in October 2008 when prices slightly dipped, but the difference in purchase price went from 1999 $200k to over $500k. When did you buy?

I bought in 2001. The bad news is my house is not worth a lot more--maybe just $20K more. The good news is that my 'hood is still affordable for many.

[oldtoyota]

This thread and your comments have given me a WILD idea.

What if...

spouse was willing to leave job and move elsewhere (just dreaming here, but still)

and

we sold our home, getting back what we put in + about $20K on top of that.

We moved to this magical place one of you mentioned? A magical place with homes for $50-$70K?

One of the expenses keeping me at the grindstone is our house even though we have a cheap-for-DC house.

I am going to do calculations taking this crazy ass info into consideration and see what happens.

[Zikoris]

Vancouver's the same - expensive if you make bad choices, dirt cheap if you don't. I've been living here for years and our monthly spending for two people is about $1500, including everything except travel - even including larger purchases averaged over time!

From my observations, all it would take for 90% of people's financial problems to disappear entirely would be to stop actively throwing money away.

[Helvegen]

Vancouver's the same - expensive if you make bad choices, dirt cheap if you don't. I've been living here for years and our monthly spending for two people is about $1500, including everything except travel - even including larger purchases averaged over time!

From my observations, all it would take for 90% of people's financial problems to disappear entirely would be to stop actively throwing money away.

I guess, but it doesn't change the fact that I was paying $17 a month for water and sewer in my old state and here I have a $30 capital improvement base charge every month before we even get to the water/sewer usage. I can cut down my water usage all I want, my bill is still going to be twice what it was in the old state, since this is a thread about COL differences.  *shrug*

[Helvegen]

You can also watch this vid of one of her lectures on the topic:

https://www.youtube.com/watch?v=akVL7QY0S8A

It convinced me and my husband to never fall into the trap of becoming completely dependent on two full time incomes.

[TeresaB]

I used to live in PG County MD and I think it's true that HCOL areas are just more expensive. My senior year of college in South Bend, IN, I rented (with friends) a 3br house that Zillow estimates as being worth about $68k. (Walking distance from Notre Dame, if anyone knows the area. Not a sketchy part of town.) The bus cost a dollar a ride. Groceries were significantly cheaper. Gas, somewhat surprisingly to me, was more expensive.

OP, don't you find your food to be an expense? Or do you not eat either? (I kid, I kid.)

[mozar]

You can be mustachian anywhere...

[lauren_knows]

I bought in 2001. The bad news is my house is not worth a lot more--maybe just $20K more. The good news is that my 'hood is still affordable for many.

Wha???? So curious where that is. Jeez, I guess the silver lining on my half million albatross is it has assessed $150k higher than 6 years ago. But we still need to sell in the future to be totally FIRE.

Yeah, we bought in 2008 and it was more or less flat the entire time, only recently getting to $410k-ish (by comparables in the hood), so only a gain of $25k in 6 years.  I looked at the public records, and the last owner bought for $236k in 2002. Woo!

[oldtoyota]

You can be mustachian anywhere...
I always enjoy talking about my awesome town of Greenbelt, MD (east side of DC). 2 miles from the metro, good schools, walkable town. I bought a 3 bedroom townhouse for 118k. The catch is that houses in my neighborhood tend to be small. My house is 920sqft. My house has HOA fees but not all the houses around here do.
I used to live in Petworth. I paid 850 for a room in a crappy group house. I probably could get that again.
A one bedroom in Petworth is $1,800. Two stops down on U St, a one bedroom is 3000. The new CityScape (space?) apartments which are going up where the old convention center was go for as much as 7000 a month. Five years ago you could get a townhouse in Petworth for $200k.

Did we talk about Greenbelt before? I considered living there, yet I was not sure about the coop aspect. At the time, I thought we might live abroad one day and did not want to be forced to sell (sometimes, they do not allow renting out homes). We go over there once a month or every other for various events, and I love the houses and the walkable neighborhood.

Greenbelt is extremely affordable, too. The only downside is not being able to walk to a metro stop. I would need a car if I lived there or I would have to deal with the bus lines.

[oldtoyota]

I used to live in PG County MD and I think it's true that HCOL areas are just more expensive. My senior year of college in South Bend, IN, I rented (with friends) a 3br house that Zillow estimates as being worth about $68k. (Walking distance from Notre Dame, if anyone knows the area. Not a sketchy part of town.) The bus cost a dollar a ride. Groceries were significantly cheaper. Gas, somewhat surprisingly to me, was more expensive.

OP, don't you find your food to be an expense? Or do you not eat either? (I kid, I kid.)

I have not eaten since 2002. Really cuts down on costs!

Seriously, though, I think I mentioned the grocery topic in another post in response to Rural.

Rural pointed out how in DC vs Richmond, several costs are higher. Utilities and transportation do not affect me much since I mostly telecommute and have figured out ways to reduce utility usage. The higher groceries affect me since we have to eat. However, I am traveling through the Midwest and have found the price not *that* much less expensive. For instance, I buy chicken stock from time to time. It costs $1 more here than at my Trader Joe's back home. GF flour is more expensive too. I don't have a full comprehensive list since I am not doing full grocery shopping here; I just noticed that a few of my staple items are more expensive here in the big box store in the Midwest than back home in DC. I realize one can easily poke holes in my anecdotal evidence. =-)

My main point overall is that one can live on the cheap in a city by avoiding the "pain points" in terms of cost. By buying a cheaper-than-average house, figuring out a way to telecommute and avoid the expensive gas/subway, and doing what I can to save on groceries and utilities, I think we are doing pretty well.

I am so glad you all commented here, because now I have this idea of looking at cheapie towns where I can buy a realllly cheap house and maybe get out of the rat race sooner.

[Rural]

I used to live in PG County MD and I think it's true that HCOL areas are just more expensive. My senior year of college in South Bend, IN, I rented (with friends) a 3br house that Zillow estimates as being worth about $68k. (Walking distance from Notre Dame, if anyone knows the area. Not a sketchy part of town.) The bus cost a dollar a ride. Groceries were significantly cheaper. Gas, somewhat surprisingly to me, was more expensive.

OP, don't you find your food to be an expense? Or do you not eat either? (I kid, I kid.)

I have not eaten since 2002. Really cuts down on costs!

Seriously, though, I think I mentioned the grocery topic in another post in response to Rural.

Rural pointed out how in DC vs Richmond, several costs are higher. Utilities and transportation do not affect me much since I mostly telecommute and have figured out ways to reduce utility usage.

I remember this conversation, and it doesn't affect your argument at all, but I must have been talking about low vs. high COL in general rather than DC v Richmond -- I don't have a clue about either one. I have been in DC, but not in the last decade, maybe the last two. :-)

[FuturePrimitive]

I will, even though you are conveniently not telling your exact neighborhood :)   (I'm not trying to beat up on you, I swear).

I grew up in Rochester, NY  (Western New York... not "Upstate"). It can be amazingly cheap to live there, but doesn't exactly have the vibrancy of a city like DC.

Ha! Another Rochesterian! (I'm always surprised to see "local" people on internet boards for some reason.) And yea, western NY. Not upstate, anything we can do to further distance ourselves from NYC, lol!

Anyway, yea you can find houses in ROC even cheaper than that if you're willing to... fortify the perimeter. However, modest, well kept homes in decent/good neighborhoods are easily attainable for 50-75k. The first house we put an offer on was 69k and I so wish we had been able to get it. (Seller accepted another offer.) Of course, that was 15 years ago, it's probably all of 85k now.

I live in one of the "expensive" suburbs outside of ROC and even here housing can be relatively reasonable. My sister lives in L.A. and I bet a comparable house would sell for 1 million+ there. I paid less than a 1/4 of that.

The thing that kills us here is property taxes, highest in the nation (by rate). Well, Monroe and Wayne counties keep duking it out for first place. I think we're still #1 though.

It can be a great place to live if you particularly enjoy 4 season outdoors stuff, hiking, camping, mt. biking, skiiing/snowboarding, boating/sailing, hunting/fishing, etc. And golf is huge here for some reason. There are also a ton of music and food festivals all summer long in ROC.

[begood]

Hi from the Philly 'burbs! Where somehow they manage to make $350K for a 1900 SQF 1960s-era split-level with baseboard heating, a damp basement, and no garage sound like a great price.

Three hundred and fifty THOUSAND dollars! 350,000 little green employees working their asses off in crap conditions!

We're blessed with employer-provided housing, but if that situation changed? UGH. We'd have to rent, probably, since six years is right on the cusp of "buy vs. rent" territory. But rentals are EVEN WORSE. That $350K house would rent for $2200- $2500/month. UGH UGH UGH.

We are in the unique spot of having no equity [ETA: lost 90% of our equity in a home sale in the summer of 2009] and paying no rent. But when the time comes, we're going to have to decide how much of our 'stache we're going to sink into housing costs. I might start a thread about that, because like oldtoyota, we're looking at lower COL areas - in our case, NC, specifically - and even though it's a hypothetical at this point, I'm a planner and if the next six years go as fast as the past six, it will be here before we know it!

[lauren_knows]

Ha! Another Rochesterian! (I'm always surprised to see "local" people on internet boards for some reason.) And yea, western NY. Not upstate, anything we can do to further distance ourselves from NYC, lol!

Anyway, yea you can find houses in ROC even cheaper than that if you're willing to... fortify the perimeter. However, modest, well kept homes in decent/good neighborhoods are easily attainable for 50-75k. The first house we put an offer on was 69k and I so wish we had been able to get it. (Seller accepted another offer.) Of course, that was 15 years ago, it's probably all of 85k now.

I live in one of the "expensive" suburbs outside of ROC and even here housing can be relatively reasonable. My sister lives in L.A. and I bet a comparable house would sell for 1 million+ there. I paid less than a 1/4 of that.

The thing that kills us here is property taxes, highest in the nation (by rate). Well, Monroe and Wayne counties keep duking it out for first place. I think we're still #1 though.

It can be a great place to live if you particularly enjoy 4 season outdoors stuff, hiking, camping, mt. biking, skiiing/snowboarding, boating/sailing, hunting/fishing, etc. And golf is huge here for some reason. There are also a ton of music and food festivals all summer long in ROC.

Yeah, I hear you on the property taxes. My family still lives up there, and my Dad lives in a house that is worth maybe $100k? And his property taxes are higher than my $400k property down here in NoVA. Ridiculous.  FWIW, I grew up in Greece (a town in Rochester for those following along haha).  Sort of middle-of-the-road in expenses if you ask me.

I think you can definitely do a lot in the Western NY area, but having grown up there and not being exposed to many "big cities" until post-college... I feel particularly spoiled in a place like DC. :)

[Ynari]

Rural pointed out how in DC vs Richmond, several costs are higher. Utilities and transportation do not affect me much since I mostly telecommute and have figured out ways to reduce utility usage. The higher groceries affect me since we have to eat. However, I am traveling through the Midwest and have found the price not *that* much less expensive. For instance, I buy chicken stock from time to time. It costs $1 more here than at my Trader Joe's back home. GF flour is more expensive too. I don't have a full comprehensive list since I am not doing full grocery shopping here; I just noticed that a few of my staple items are more expensive here in the big box store in the Midwest than back home in DC. I realize one can easily poke holes in my anecdotal evidence. =-)

Oh it's interesting now that you bring up what food you buy.  DC probably has a higher market for "specialty" foods like GF flour and Trader Joe's.  (I didn't even have a Trader Joe's at home, but there are quite a few in Chicago.  They seem like a regional thing, so if there's one out in the boondocks it might face higher transportation costs.)  I wonder what assumptions COL levels make on what food to compare.  (I imagine "American staples".  Milk, rice, apples, eggs?)

[SnpKraklePhyz]

Hey BeGood - That's MY house you are describing!  Well not really - I have forced hot air heat not baseboard heat.  But everything else - yeah.  Good thing is I can still get my 350K back out when I sell in a few years. It has been a very stable real estate market.  And I have excellent schools.  And relatively low school taxes. But I really like my house and the area. I hope you settle in here!

[BlueHouse]

Yes, I'm very familiar with the area. And that's sort of my point - comparing SE DC to expensive Boulder suburbs would be crazy - you'd have to compare it to a similar neighborhood, especially crime and schools.

I don't live in SE. FYI: I am not directly comparing Boulder to SE DC. First, I don't live in SE DC. Second, Boulder was just an example since MMM has said CO has lower taxes than some states in the east. I was using that as an example to mention lower state taxes, but I probably was not clear enough in my post.

Excuse me, please don't hate on SE DC.  I happen to live there and it's awesome.  I live in the newly gentrified area in a new rowhouse that cost as much as 150 year old rowhouses 1 block away on Capitol Hill.  The housing is crazy expensive, but I feel like I got in at the right time as my house would now sell for ~100K more than I paid 2 years ago. 

One thing that most don't seem to weigh heavily was discussed in oldtoyota's first post -- the free stuff around the neighborhood.  That's worth a HUGE amount to me, and I think will continue to be worth a lot after I retire.  On weekends I walk to the FREE Smithsonian museums and keep my mind and body active in doing so.  Every weekend I attend a FREE concert on the river 2 blocks from my house.  On weeknights, I can enjoy free movies set up in different parks within walking distance.  Farmers markets abound.  CSAs deliver.  There is some economy to living in the city, even though the housing is so high.  It's a trade off, but the activities are worth more than just saved entertainment costs to me.  I think they add to my physical and mental health benefits that will last me a lifetime.  I know some people find things to do in the suburbs, but for me, that just didn't happen.   

[begood]

Hey BeGood - That's MY house you are describing!  Well not really - I have forced hot air heat not baseboard heat.  But everything else - yeah.  Good thing is I can still get my 350K back out when I sell in a few years. It has been a very stable real estate market.  And I have excellent schools.  And relatively low school taxes. But I really like my house and the area. I hope you settle in here!

LOL! No offense intended, SnpKraklePhyz! It's too cold for me here to imagine living here with old(er), thin(ner) blood. Last winter about killed me. I'm still recovering from it, I think. I happened upon a fleece jacket a few minutes ago and physically recoiled!

On topic... some kind soul posted this cost-of-living calculator and I found it very helpful:

http://money.cnn.com/calculator/pf/cost-of-living/

My niece has been offered a job in the DC area (Fairfax) and her parents are starting to investigate places where she could live that are 1) safe; 2) on a bus route to her work; and 3) not $7K/month. :)

[SnpKraklePhyz]

I completely agree with you about last winter.  I'm definitely hoping that was an anomaly!  I don't remember EVER having that much snow here.  I'm planning to leave for a warmer climate in 3 years.

[mango]

This is great info and supports what I was thinking about living in DC. I don't use much in the way of transportation or utilities. My housing is cheaper than most. This is why I am feeling immune to the expensiveness of this area.

Could I find a home at this same price? Maybe cheaper. Another 3br/2ba went for $160K in the past year. Some are going for over $200K though. Last fall, I found a home I liked in a slightly better 'hood for the same price I paid for mine. Very tempting, but I decided not to buy it.

This seems to support my half-baked theory that a high COL does not have to affect one if one makes certain choices in life.

What it told me was if I had bought my house in 1999 (or another house in my neighborhood) rather than in 2008 I'd be FI. Sigh. And I wouldn't care about the other COL issues because they are minor. So COL matters a lot on one's timing. I got a relative deal in October 2008 when prices slightly dipped, but the difference in purchase price went from 1999 $200k to over $500k. When did you buy?

I bought in 2001. The bad news is my house is not worth a lot more--maybe just $20K more. The good news is that my 'hood is still affordable for many.

My parents bought in NoVA in 98/99. Just under 2000 sqft for 150k (townhouse 1 mile from a metro stop). Today the house would be sold for over 500k. It's a shame I wasn't able to buy when I was 10.

[Dicey]

I grew up in a low-ish COLA (Riverside, CA) and spent my entire working career in high COLAs (L.A., SF Bay Area). I could not afford to buy a house in L.A., so my first property was a 1612 sf 3/2 in Riverside, which I rehabbed and rented out while I lived in a rent-controlled apartment in L.A with a roommate. I sold it ten years later to buy an 882 sf 2+1 condo in NorCal, which I moved into. That was my foot in the door. Had I not started that way, I wouldn't be FIRE now. Along the way, I got a job with a company car, making saving a down payment a little easier. I lived with roommates and led a relatively frugal lifestyle.

My housing costs in NorCal exceeded 50% of my income for a number of years. I managed it by keeping other costs low, using mustachian principles which were simply called being thrifty back then. I never had consumer debt and got pretty good at figuring out ways to get whatever I needed without paying retail. Amy Dacyczyn was my friend. Now, with CL, freecycle and the internet in general, it's in some ways easier than ever to live on the cheap.

I was single until two years ago, so yeah, it can be done on one average income in a high COLA. You have to want it and earn a black belt in distinguishing wants from needs. Many may tell you it can't be done. Smile at them and don't listen to their negative viewpoint. If you found this forum, you can do it.
 

[minimustache1985]

I took a job in a HCOL area out of college and have since moved to a more average COL area, and honestly I don't notice any significant difference beyond housing cost.

I also think it's worth mentioning that, particularly if you don't have children, housing costs are more flexible than first glance in HCOL areas.  In my first city because buying is so out of reach for most young professionals it's extremely common for people to have roommates well into their adult lives and I easily found fantastic roommates; during my time there I lived with an engineer, masters student, several speech therapists, and a teacher.

On the flip side when I moved and initially looked for roommates in this lower COL area, everyone I met with during my scouting trip had a sort of party vibe and most worked in the entertainment/bartending industry and kept messy homes, so I ultimately ended up getting my own apartment which cost nearly as much as I paid for my half of the rental in the HCOL city.

So for a family that needs all 3 br the HCOL would obviously be more for housing, but for young professionals/couples starting their 'stash, it may not really make much of a difference and can expose you to higher-paying jobs.

[theonethatgotaway]

I second you can be must as chain anywhere. Keep eye on trends and deals.

We lived in manhattan south of 96th, had a 3 bedroom renovated with garden for 2450 rent per month from 2009-2013. We negotiated the rent down from 3k in the winter when it had been on market for 2 months. We saved loads whole there as transportation is dirt cheap and high income. Plus 15 minute commute, we had fun doing free things in the city and visiting costco :). (The year we left they raised the rent on our place 1k)