Author Topic: Is Your Location Hurting or Helping You?  (Read 24870 times)

Retired To Win

  • Handlebar Stache
  • *****
  • Posts: 1492
  • Age: 77
  • Location: Virginia
  • making the most of my time and my money
    • Retired To Win
Is Your Location Hurting or Helping You?
« on: January 08, 2015, 02:04:45 PM »
It seems to me that too many (even financially aware) people either have let themselves get trapped in a High Cost of Living Area or live where they do by chance.  And I have been there and done that. :(  How about you?

It's too late for me to recover the tens of thousands of dollars I spent unnecessarily in my 20's and 30's due to my location blind spot*.  But hopefully it is not too late for you.  Is your location situation helping you reach financial freedom?  If not, are you working on a plan to make it so?


*Thank heavens I at least was smart about choosing my retirement location!  ;)

Johnez

  • Handlebar Stache
  • *****
  • Posts: 1102
  • Location: Southern California
Re: Is Your Location Hurting or Helping You?
« Reply #1 on: January 08, 2015, 02:11:34 PM »
Helping me. I live in a HCOL area which means I get paid more. I can control my expenses, and will gladly take more pay home!

If I was single I would seriously consider living in an RV or van even to take full advantage.

MandyM

  • Pencil Stache
  • ****
  • Posts: 543
  • Location: Lexington, KY
Re: Is Your Location Hurting or Helping You?
« Reply #2 on: January 08, 2015, 03:07:14 PM »
Helping! I live in KY, which is pretty LCOL, even in the big city. Before this I was in FL, which was pretty good too. The COL wasn't what made me move here or to FL, but it is what is keeping me in KY.

I'm sure I could make more in a HCOLA, but I would prefer to not live in a huge city (which most HCOLAs are).

caliq

  • Pencil Stache
  • ****
  • Posts: 675
Re: Is Your Location Hurting or Helping You?
« Reply #3 on: January 08, 2015, 03:13:14 PM »
Both? Short term hurting, long term helping? :(  We pay around $5600 in property tax on a 1000 sq ft ranch, which really sucks.  But I'm getting in-state tuition rates and merit scholarships/grants at one of the best public universities on the East Coast for my bachelor's and PharmD, setting me up for a 80k-100k starting salary in 5 years or so.  After I graduate we'll be moving to the Midwest with a much lower COL.  My husband's income is fixed regardless of area (VA disability) so moving to a LCOL area will be a huge deal for us.  Plus we're not big city people so the lifestyle will be better :)

MakingSenseofCents

  • Bristles
  • ***
  • Posts: 263
  • Age: 36
  • Location: RVer
    • Making Sense of Cents
Re: Is Your Location Hurting or Helping You?
« Reply #4 on: January 08, 2015, 03:15:45 PM »
Where we live now would be great to retire but we've decided that we want to move to Colorado. It will be more expensive, but we will have lots of things to do and won't be forced to take a vacation in order to have fun.

backyardfeast

  • Pencil Stache
  • ****
  • Posts: 849
  • Location: Vancouver Island, BC
    • My journal
Re: Is Your Location Hurting or Helping You?
« Reply #5 on: January 08, 2015, 03:22:45 PM »
Sigh.  It's probably hurting.  We're in a lower HCOL area than we used to be, but still a WAY more expensive place than we could be to benefit financially.  But we both love it here and just can't bear to live somewhere we love less...there are places not that far away that are incrementally cheaper, though, and moving to one of them to retire is certainly something we'll consider.

Copperwood

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Is Your Location Hurting or Helping You?
« Reply #6 on: January 08, 2015, 03:31:59 PM »
i believe there are a few DC area folks here and they feel my pain.
high cost of living and high traffic.
i'm willing to take a 25% paycut to live in a cheaper area, but can't escape.

EDSMedS

  • Stubble
  • **
  • Posts: 211
  • Age: 40
  • Location: Washington, DC
Re: Is Your Location Hurting or Helping You?
« Reply #7 on: January 08, 2015, 03:39:23 PM »
DCer here: this area is GREAT for me, but AWFUL for me!

The pay that DW and I receive, relative to what we would make in our dream location, is ~125% higher.  Our COL is ~40% higher.  So we come out WAY on top financially.

HOWEVER, we are bumpkins and we hate concrete.  DC is draining our joy for life.  We plan to suck on the income teat for three more years than VAMOOSH w/savings equivalent to 20X our annual expenses to dirt, trees, and crappy pay.

Retired To Win

  • Handlebar Stache
  • *****
  • Posts: 1492
  • Age: 77
  • Location: Virginia
  • making the most of my time and my money
    • Retired To Win
Re: Is Your Location Hurting or Helping You?
« Reply #8 on: January 08, 2015, 06:20:16 PM »
... The pay that DW and I receive, relative to what we would make in our dream location, is ~125% higher.  Our COL is ~40% higher.  So we come out WAY on top financially... We plan to suck on the income teat for three more years than VAMOOSH w/savings equivalent to 20X our annual expenses to dirt, trees, and crappy pay.

That sounds like a really good plan to me.

I've had "conversations" with other forum posters that echo that same game plan:  the increased income they get in an HCOL area far exceeds their increased living costs, so they are able to save more and therefore move faster towards the day when they can take their loot and -- as you put it -- vamoosh to a preferred Low Cost of Living location where their money will go farther longer.  It's a win.

What baffles me, however, are other folks I've corresponded with who are high income earners in HCOL areas but cry the blues bigtime about how they are trapped there, and their real estate taxes are sky high, and their insurance rates are through the roof, and yaddy yaddy.  Those people make it sound like, high income or not, they can barely make ends meet and are headed for the poorhouse!

alsoknownasDean

  • Magnum Stache
  • ******
  • Posts: 2923
  • Age: 40
  • Location: Melbourne, Australia
Is Your Location Hurting or Helping You?
« Reply #9 on: January 08, 2015, 06:33:08 PM »
I'm in a HCOL area (or, more specifically, a high cost of housing area). It's not helping, but renting a small apartment lessens the blow, but there's far fewer employment opportunities in smaller cities, and I prefer the city to a small town (I grew up in a small town). There's always commuting from cheaper, more distant areas, but no thanks :)

Thing is, whilst many areas have cheaper housing, in a lot of cases other things such as food and utilities are often more expensive due to less choice/competition.

I suspect I'd head to a cheaper area once FIRE anyway, although really most areas have expensive housing unless they're remote.

At the moment, I deal with it, stash, and wonder why people will pay so bloody much to buy a place. The median house price in this city is something like eight times median income.
« Last Edit: January 08, 2015, 06:37:33 PM by alsoknownasDean »

expatartist

  • Handlebar Stache
  • *****
  • Posts: 1921
  • Location: Hong Kong/Paris
Re: Is Your Location Hurting or Helping You?
« Reply #10 on: January 08, 2015, 06:49:28 PM »
At the moment, I deal with it, stash, and wonder why people will pay so bloody much to buy a place. The median house price in this city is something like eight times median income.

+1! Where I live [Beijing], housing costs 22 times the average salary! http://www.ibtimes.com/china-has-priciest-housing-planet-theres-nothing-beijing-can-do-about-it-1333635
We could technically buy one flat here, and demand in Beijing doesn't look to go down much, but my employer pays for our housing and I don't want that much $ wrapped up in Chinese Yuan.

Our location is helpful. COL here can be very high or very low, there's a spectrum available to those of us who live in major cities. Since we're pretty frugal, this is a great location for us to save - for now.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 7500
  • Age: 40
  • Location: Seattle, WA
    • My blog
Re: Is Your Location Hurting or Helping You?
« Reply #11 on: January 08, 2015, 06:50:45 PM »
I'm almost positive my location is helping me, despite the fact that Seattle is pretty high up there on most cost of living lists.

When I was in college I did a couple of internships in a Midwestern office of a large technology company. I did well enough during those internships that they invited me to start there full-time after graduation. I declined their offer. I wanted to get a master's degree and I also didn't want to be stuck working in a town with only one employer in my field (because I would be pretty much forced to move in the event of a layoff or voluntary job change). So I spent two years on my master's degree and then got a job in Seattle with a base salary $30k higher than I was offered to work in the Midwest. Since then I have switched jobs twice and my base salary has increased by over 40% in a little over five years. My wife and I don't spend much more than $30k combined, so I think this is a pretty clear win.

Gone Fishing

  • Magnum Stache
  • ******
  • Posts: 2945
  • So Close went fishing on April 1, 2016
    • Journal
Re: Is Your Location Hurting or Helping You?
« Reply #12 on: January 08, 2015, 07:13:48 PM »
We are in a LCOL area with above average income.  While this may seem ideal, job opportunities are limited and schools/libraries reflect our tax rates.  BUT it works for us because it splits the difference between our parents who live on opposite ends of the state. All said and done, we may have been able to hit FI faster in a higher COL area if our income correlated with COL, only because expenses are easier to control than income, for me at least.

Mr. Frugalwoods

  • Bristles
  • ***
  • Posts: 296
  • Location: Greater Boston Area
    • Frugalwoods
Re: Is Your Location Hurting or Helping You?
« Reply #13 on: January 08, 2015, 07:37:34 PM »
Helping.  We're in a high COL area, but we live cheaply and have aggressively managed our careers. 

We make a lot more because we're in a major city, and we don't spend that much more.

That being said, we plan on retiring outside of the city in a lower COL area.

Calvawt

  • Bristles
  • ***
  • Posts: 337
  • Location: Central CA
Re: Is Your Location Hurting or Helping You?
« Reply #14 on: January 08, 2015, 08:18:52 PM »
I think mine is helping.  I moved to Central California from Kansas City in January 2010.  At that point I sold my old house in a market that was not tanking and bought at the near bottom in California.  Prices have since recovered significantly in the 5 years following the purchase.

I also got a cost of living adjustment as part of the move and have found it to be very near what I paid to live in Kansas, plus cheaper (and fresher) produce.

innerscorecard

  • Pencil Stache
  • ****
  • Posts: 589
    • Inner Scorecard - Where financial independence, value investing and life meet
Re: Is Your Location Hurting or Helping You?
« Reply #15 on: January 08, 2015, 08:33:16 PM »
My spouse and I currently live in Shanghai, China. An expensive city in a cheap country. Expats here spend a lot of money. So we don't live an expat lifestyle. It's not nice, but we survive. We also don't have expat packages and don't make a lot of money. We live frugally so that we have money to invest so that we aren't living in these conditions forever. The goal is to move to a low-tax and low-cost-of-living jurisdiction in the mid-term future so that we can have a life that is both pleasant and cheap. Right now life is cheap but anything but pleasant.

On the other hand, there are positives too. The biggest one is getting out of the thought bubble that is the US. It's only here, isolated, that I discovered Mustachianism and other alternative ways of thinking in the first place. So I had to be cursed to be blessed.

WYOGO

  • Stubble
  • **
  • Posts: 165
  • Location: Salt Lake City
  • Great Basin
Re: Is Your Location Hurting or Helping You?
« Reply #16 on: January 08, 2015, 08:39:47 PM »
Definitely helping. The overall tax burden is the lowest in the nation with Rocky Mountain beauty to boot.

BuildingFrugalHabits

  • Bristles
  • ***
  • Posts: 250
  • Location: Great Plains
  • Living the dream
Re: Is Your Location Hurting or Helping You?
« Reply #17 on: January 08, 2015, 08:44:16 PM »
Definitely helping. The overall tax burden is the lowest in the nation with Rocky Mountain beauty to boot.

Right on. Where in WY are you?

WYOGO

  • Stubble
  • **
  • Posts: 165
  • Location: Salt Lake City
  • Great Basin
Re: Is Your Location Hurting or Helping You?
« Reply #18 on: January 08, 2015, 09:13:50 PM »
I live in the Northeast currently and roam the Big Horns and Black Hills. I get down to the front range area sometimes multiple times per month so make bulk runs to Sprouts, use the airport, and play in the southern Rockies. I love the natural beauty of all these states from New Mexico to Montana and move between them whenever I can. Later when I reach the point of diminishing returns, I will probably domicile over in one of the western counties near the Wind River Range where sales and use tax is below 4%.

JLee

  • Walrus Stache
  • *******
  • Posts: 7693
Re: Is Your Location Hurting or Helping You?
« Reply #19 on: January 08, 2015, 09:15:13 PM »
Helping, absolutely. Low cost housing, decent income, and happy tenants.

expatartist

  • Handlebar Stache
  • *****
  • Posts: 1921
  • Location: Hong Kong/Paris
Re: Is Your Location Hurting or Helping You?
« Reply #20 on: January 08, 2015, 09:31:03 PM »
Shanghai, China. An expensive city in a cheap country. Expats here spend a lot of money.

Part of why I'm wary of moving to Shanghai is increased temptations to spend. Expats there seem to spend more than in Beijing, even for routine socializing. Though they tend to move to SH for different reasons than BJ (SH more financial, BJ more cultural/linguistic).

Leanthree

  • 5 O'Clock Shadow
  • *
  • Posts: 63
Re: Is Your Location Hurting or Helping You?
« Reply #21 on: January 08, 2015, 09:32:45 PM »
Definately helping. I live in one of the most expensive on average places in the US, downtown Manhattan, but the potential for income here is absurd with a decent undergrad degree and the ability to play office politics. With "only" $1800 a month in rent for a 300 sq ft 1 bedroom split with the fiancee that we have been in for 5 years, one can make it make sense. Rent has only gone up $75 since we moved in thanks to an awesome landlord who appreciates low maintanence tennants.

The plus side of this absurdly high rent is heat and hot water are included, the place is tiny so it is easy to not buy stuff, neither of us need cars, one job is an easy walk and the other is an easy bike.

Taxes are high, but we get a lot in return like great transit, low crime, newly installed cycling infrastructure and a lot of public art installations, plus all the benefits of a high density area like bikeshare, and museums.

Basically if I am going to have a 60% savings rate I'd rather do it with a high income than a low income, and location helps there. Oncer FIRE kicks in I'll live in the mountains.d

innerscorecard

  • Pencil Stache
  • ****
  • Posts: 589
    • Inner Scorecard - Where financial independence, value investing and life meet
Re: Is Your Location Hurting or Helping You?
« Reply #22 on: January 08, 2015, 09:42:31 PM »
Shanghai, China. An expensive city in a cheap country. Expats here spend a lot of money.

Part of why I'm wary of moving to Shanghai is increased temptations to spend. Expats there seem to spend more than in Beijing, even for routine socializing. Though they tend to move to SH for different reasons than BJ (SH more financial, BJ more cultural/linguistic).

I rarely socialize period. Especially with expats.

In the professional class, Chinese people tend to spend away their income on housing and cars. Expats spend it all on partying and food. Both groups blow a lot on travel. My wife and I save and invest.

caliq

  • Pencil Stache
  • ****
  • Posts: 675
Re: Is Your Location Hurting or Helping You?
« Reply #23 on: January 08, 2015, 09:48:56 PM »
High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

Have you seen the gas prices thread? :(

I posted earlier that I thought the bigger towns around me were at or near $2, but after my trip to the doctor's today I am better informed -- the lowest I saw was $2.39; my town is at $2.69.  Compare this to the people paying like $1.50!

I get that the majority of COL differences are housing, but there are other differences as well.  Gas being one for sure.  My husband and I visited his parents in rural-ish northern Wisconsin for the holidays and the difference in the price of food was considerable, at least at restaurants -- we didn't grocery shop so I'm not sure about that.  My in-laws took us out to breakfast and hubby was over the moon about getting 2 "tractor tire pancakes" (12"? diameter) plus eggs, sausage, bacon, a hashbrown, and a biscuit for like $8.  In Connecticut, the same amount of food would probably have been $15, though we don't eat out much at home so I can't be sure.  I imagine some of that price difference has to do with ingredient cost?

Knapptyme

  • Bristles
  • ***
  • Posts: 260
  • Age: 43
  • Location: Spain
Re: Is Your Location Hurting or Helping You?
« Reply #24 on: January 08, 2015, 09:56:07 PM »
Definitely helping. Chose a location close to work (less than a mile so biking or walking is the preferred commute), it is close enough to bike to local grocery and hardware stores, the library, and there's a 5 mile scenic bike path nearby to boot. There's enough land to grow food and room in the house to grow a family. We chose wisely even if we bought the house near the peak of the housing market.

darkadams00

  • Bristles
  • ***
  • Posts: 421
Re: Is Your Location Hurting or Helping You?
« Reply #25 on: January 08, 2015, 10:10:02 PM »
Helping mostly. For 13 years, I walked 0.1 mile from home to work--lower income at the time, but extremely low COL there as well. We looked long and hard for the best move possible afterwards with respect to commute and schools for the kids. We made the move, and for the next 3 years (renting in a new city), I drove ~15 mins to a park and ride so I could park for free, riding a bus the last 10 mins to work (best commute alternative for that side of town). Finally, having learned the area better, we spent time looking at different neighborhoods, schools, etc until we found a great neighborhood in a suburb about 20 minutes from my newest job. We've been here for 6 years and have learned the bike routes, transit schedules, and amenities. Housing is ~5% higher than in the larger neighboring city, but my job is < 45 min bike ride, my wife's job is < 30 min bike ride, and almost everything else we do regularly (except church) is within a 4-mile radius.

In reflection, the first move wasn't the absolute best option, but it was actually pretty good given that I wasn't biking back then and my cashflow was much more liberal--on a lesser income to boot! Now that we're earning much more and we've "moved up a bit," we're still living at nearly the same income level as we were when we first relocated. We're saving much, much more, and we're enjoying our life more. When we spend extra cash, we spend it on things that we want, things that matter to us, not trinkets, baubles, fuel, and chrome. I attribute much of this to choosing a place to live that makes life as accessible as possible. The remainder is due to personal motivations.

caliq

  • Pencil Stache
  • ****
  • Posts: 675
Re: Is Your Location Hurting or Helping You?
« Reply #26 on: January 08, 2015, 10:15:23 PM »
High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

Have you seen the gas prices thread? :(

I posted earlier that I thought the bigger towns around me were at or near $2, but after my trip to the doctor's today I am better informed -- the lowest I saw was $2.39; my town is at $2.69.  Compare this to the people paying like $1.50!

I get that the majority of COL differences are housing, but there are other differences as well.  Gas being one for sure.  My husband and I visited his parents in rural-ish northern Wisconsin for the holidays and the difference in the price of food was considerable, at least at restaurants -- we didn't grocery shop so I'm not sure about that.  My in-laws took us out to breakfast and hubby was over the moon about getting 2 "tractor tire pancakes" (12"? diameter) plus eggs, sausage, bacon, a hashbrown, and a biscuit for like $8.  In Connecticut, the same amount of food would probably have been $15, though we don't eat out much at home so I can't be sure.  I imagine some of that price difference has to do with ingredient cost?

Those gas prices you just quoted result in a completely negligible difference in spending unless you drive your car too much. ;-)

The point isn't that things all cost the same throughout the USA. Rather, the point is that it's up to you what to buy and no one is forcing you to buy a $15 breakfast no matter where you live. Similarly, no one is forcing you to buy lots of gas. So it's not the "cost of living" of the area that is racking up those expenses, it's your own choices.

In general, most things are considerably cheaper anywhere in the USA than in Canada where I grew up, but I don't actually consider the cost of living of the two countries to be appreciably different, other than housing (which is much cheaper on average in the USA, although not specifically where I am living now). Aside from housing, everything else is rounding error.

I suppose you could also argue that state taxes vary significantly, but the efficient market handles that by adjusting pay accordingly.

Oh I don't disagree that the COL for a mustachian lifestyle is probably not very different except for the price of walkable/bikeable housing.  But there are other ways to live that do result in a significant difference based on region :P

For us, eating out once a month or so and spending less than $50/month on gas (well, now probably even less given the price drop) due to me ride-sharing and my husband not working, it probably doesn't make a huge difference.  The only way it significantly hurts us is, as I said upthread, the property taxes -- $5600/yr on a 1000 sq ft ranch that Zillows at ~$190k.  Mill rate is 35.75 and rising, and I definitely was not educated enough on this subject when we chose this town to live in.  We're chalking it up to being young and buying probably too early (yay 0% VA loan...) obviously pre-fiscal responsibility wake up call; and we'll be cutting and running as soon as it's feasible. 

IDK, tl;dr is I am becoming more and more disenchanted with the East Coast and probably being fairly complainy-pants about it ;)

Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Is Your Location Hurting or Helping You?
« Reply #27 on: January 08, 2015, 10:48:31 PM »
Hurting and helping.

Hurting:  Seattle with longish commute (company moved location and not worth it to sell the house since we are close to FIRE).  Cost of living here is much higher than southern states (except California of course)

Helping:  Easy to make $$$$ in Seattle in software engineering.   Lower pay in southern states (except California where pay is even higher)

Nudelkopf

  • Pencil Stache
  • ****
  • Posts: 897
  • Age: 33
  • Location: Australia
Re: Is Your Location Hurting or Helping You?
« Reply #28 on: January 08, 2015, 11:00:55 PM »
Helping! Definitely!

+ Rural town only 6km x 4km... Perfect size for biking everywhere!
+ Employer subsides rent (I pay $38/week, electricity included)
+ Employer gives bonus based on location... Rural area attracts $45/fortnight plus $1200 in a once-off payment
+ Tax advantage to living rural $360 credit towards taxes (I think)

- Flight to nearest capital city is $250 one-way, or a 24hr drive. Flight to nearest city is $150 one-way or an 11hr drive.
- Climate is shit

Rural

  • Walrus Stache
  • *******
  • Posts: 5093
Re: Is Your Location Hurting or Helping You?
« Reply #29 on: January 09, 2015, 03:52:02 AM »
Helping. Extreme low cost of housing, very low costs for groceries compared even to the city (town?) where I work, moreso compared to a "real" city. Services if needed, even auto parts... Much lower cost because otherwise they won't sell.


I do pay for fuel. That's the only higher cost, and I don't burn more than an idiot who sits in traffic, though I do burn more than someone who doesn't drive because public transit is available.


Wages are lower, definitely, but costs are proportionately far lower than that. Moved here from a HCOL, high wage situation, so I have the direct comparison. You can do it either way.

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 35
  • Location: North Carolina
Re: Is Your Location Hurting or Helping You?
« Reply #30 on: January 09, 2015, 05:54:19 AM »
Helping. I'm only 25 and 65k is what I get prebonus in 2015. Live just outside NYC so I get the income but I pay a lot less in rent (950/mo, 1br). I do have to commute by public transportation, but I'm ok with that because it lets me save more of what I earn. SO and I spend 30k/yr, about half my post tax income and can save all of her income as well. Would be tougher to do in a more rural setting.

Retired To Win

  • Handlebar Stache
  • *****
  • Posts: 1492
  • Age: 77
  • Location: Virginia
  • making the most of my time and my money
    • Retired To Win
Re: Is Your Location Hurting or Helping You?
« Reply #31 on: January 09, 2015, 07:13:39 AM »
"High cost of living" is basically a myth in the USA at least. People typically use mythical high cost of living areas as an excuse for outrageously lavish luxury budgets.

The USA does have major variance in the cost of housing. Rent of $2500/month is the norm in some places, but would be a sign of off the charts luxury in Kansas City, MO or Columbus, OH. Still, the whole reason to live in those $2500/month places is the high pay, so housing isn't really going to get in the way of saving a lot of money.

High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

That is what I have been suspecting as well.  Some people are using the HCOL "woe is me" mantra to wiggle out of thinking about how they are spending and how they could change that.  And that is costing them so, yes, woe to them!

jba302

  • Pencil Stache
  • ****
  • Posts: 622
Re: Is Your Location Hurting or Helping You?
« Reply #32 on: January 09, 2015, 07:24:13 AM »
More helping than hurting. Our kids are on the bus route, total work commute between the two of us is 100 miles / week. Area is desirable and we picked a home on the lower value end of the neighborhood so we are seeing good appreciation to our house work.


Roland of Gilead

  • Handlebar Stache
  • *****
  • Posts: 2454
Re: Is Your Location Hurting or Helping You?
« Reply #33 on: January 09, 2015, 07:29:38 AM »
"High cost of living" is basically a myth in the USA at least. People typically use mythical high cost of living areas as an excuse for outrageously lavish luxury budgets.

The USA does have major variance in the cost of housing. Rent of $2500/month is the norm in some places, but would be a sign of off the charts luxury in Kansas City, MO or Columbus, OH. Still, the whole reason to live in those $2500/month places is the high pay, so housing isn't really going to get in the way of saving a lot of money.

High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

Sorry, no.

First, housing is a big difference which you can't write off by saying "other than housing".   My parents in south Georgia pay $500 a month for a 3bd apartment on a golf course.  Here in Seattle we paid $1700 for a 2bd apartment outside the city.  An apartment on a golf course even 40 miles outside the city would likely be even more.

Second, I visited my parents in 2014 and we ate at a local southern food restaurant.   I had country fried steak, fried okra, homemade mashed potatoes, cornbread and washed it all down with a glass of sweet iced tea.   My parents had the same thing (I think my mom got fried chicken though).   Total bill for the three of us was $13, which I paid.  I actually felt so bad at the low prices I left a $5 tip.   Here in Seattle $13 would barely cover one person's meal.

My parents pay under $2 for gasoline, here in Seattle our prices range from $2.20 at Costco to $2.70 in the city.

edit:  I know I am going to get blasted for eating the fried southern food, but it was heaven.  All things in moderation, including moderation.
« Last Edit: January 09, 2015, 07:33:23 AM by Roland of Gilead »

pom

  • Bristles
  • ***
  • Posts: 288
  • Location: Paris, France
Re: Is Your Location Hurting or Helping You?
« Reply #34 on: January 09, 2015, 07:33:14 AM »
"High cost of living" is basically a myth in the USA at least. People typically use mythical high cost of living areas as an excuse for outrageously lavish luxury budgets.

The USA does have major variance in the cost of housing. Rent of $2500/month is the norm in some places, but would be a sign of off the charts luxury in Kansas City, MO or Columbus, OH. Still, the whole reason to live in those $2500/month places is the high pay, so housing isn't really going to get in the way of saving a lot of money.

High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

That is what I have been suspecting as well.  Some people are using the HCOL "woe is me" mantra to wiggle out of thinking about how they are spending and how they could change that.  And that is costing them so, yes, woe to them!

Totally agree with this. I live in Paris which is one of the most expensive cities in the world. Basically though rent is a difficult issue, the rest is in large part under your control (for exemple meat is expensive but you can reduce portions and increase veggies which is something most of us should do anyway). Once you consider that salaries are proportionally higher, then you can see how it makes sense to stay in HCOL for your career. Saving half of 100k is not the same as saving half of 150k if you consider that you can move to the LCOL once you are FIRE.

mskyle

  • Pencil Stache
  • ****
  • Posts: 690
Re: Is Your Location Hurting or Helping You?
« Reply #35 on: January 09, 2015, 07:47:57 AM »
I think more helping than hurting. I live in a high cost-of-living area (Boston area, and a relatively hot community within that area). My SO and I share a good-sized one-bedroom apartment. It's great on the inside and utilities are cheap, but it's in a kind of run-down house and almost a mile from the nearest subway stop and it doesn't have laundry, so it's a lot cheaper than fancier places closer in, which really works for us - we know a lot of people who seem to be paying a lot more to get a lot less. We bike and take public transport for our commute (me: 95% biking, 5% public transport, him: more like 50/50 - his office is further away).

We both used to live in a different part of the state where we made a lot less money and had a lot less potential for advancement in our careers. We also spent a lot more time and gas commuting, and we were miserable there besides! Now we save a lot of our income and are definitely considering relocating to a lower cost-of-living area (probably still in New England) if/when we retire or semi-retire, since we won't have to worry about commuting or finding jobs.

mbl

  • Bristles
  • ***
  • Posts: 331
Re: Is Your Location Hurting or Helping You?
« Reply #36 on: January 09, 2015, 07:50:15 AM »
Helping.
In the early 80's I graduated college and got recruited to an engineering job in Sunnyvale.
Moved from NYC to California.
Spent 2 years there enjoying life as a young engineer.  Traveled, camped, made great friends, attended grad school paid by my employer.
My rent on a 1 bdrm when I left was $490/month.
Saw the writing on the wall and DH and I moved to his hometown in upstate NY.
I got a job earning more money.  Our rent was $200/month for a half a house.
We eventually built our home in the country on acreage for $67k.
Anything comparable, let's say in Gilroy, CA at that time would have been about $200k.

Yes, our property taxes are higher but the cost of real estate trumped just about everything else(especially the cost of water which is about $15/month here).



« Last Edit: January 09, 2015, 07:57:36 AM by mbl »

BuildingFrugalHabits

  • Bristles
  • ***
  • Posts: 250
  • Location: Great Plains
  • Living the dream
Re: Is Your Location Hurting or Helping You?
« Reply #37 on: January 09, 2015, 07:50:44 AM »
Can we turn this thread into a poll?

As far as I can tell, most of the respondents have indicated that their location is beneficial regardless of whether they are in a high or low cost of living area.  According to one COL calculator, my area is 108% of the national average mostly due to housing which is 124% of the national average.  Colorado isn't as cheap as people think and it's definitely gotten pricier since I moved here 10 years ago.  However, but it is much more affordable than many of the large coastal areas like DC, NYC, BOS, LA, SF, etc.  My current position would pay a slightly higher (1.4%) salary working in one of those areas but it wouldn't make up for the difference in housing costs.  There may be higher paying jobs in those cities but it's highly dependent on which industry you work in.  In my case, those same higher paying jobs are available in Houston, TX which is significantly cheaper. 

I remember interviewing with one high tech / high paying company in the bay area that also had offices in other major cities across the country (including Houston) and there was no COL adjustment for duty station. 

So if stashing was the prime objective Houston probably offers the best combination of high paying engineering jobs and low cost of living in the country.  I figure Denver is a compromise that offers a good quality of life with activities and amenities that I enjoy while also allowing us to save some $$.  Wyoming might also be a great choice with really low COL and great outdoor / recreational access assuming you can find a good job there. Salt Lake City is another great option (underrated IMO).

Also one thing to note about COL.  We considered moving to a city in the southern US with low COL and it's true that you can find a very reasonably priced home there. However, amenities that we take for granted in Denver like sidewalks, safe roads to bicycle commute, neighborhood and city parks, bike paths / trails, and access to organic grocery stores weren't available unless we chose the Yuppyish historical area near downtown where houses cost about the same as Denver.  Schools weren't great and we may have considered private school as well.  I would have spent at least as much (or more) to re-create the same lifestyle down there.  Go figure.  The take away message is to consider your lifestyle and values when choosing a place to live.  Cost of living probably carries more weight once you are retired and have the flexibility to live anywhere without being tied to an income source.

 

golden1

  • Handlebar Stache
  • *****
  • Posts: 1541
  • Location: MA
Re: Is Your Location Hurting or Helping You?
« Reply #38 on: January 09, 2015, 08:37:36 AM »
Helping. 

HCL areas have their perks - there is a reason why people want to live there and real estate prices are high.  My son is on the autism spectrum.  My local school department has been fantastic in helping him and accommodating him and providing a good education.  I am fortunate enough to live in an area where the public schools are some of the best in the US.   Also, my family lives here, and there are lots of tech jobs within commuting distance.     Moving out of MA would be a losing proposition, financially and otherwise.  Even if my salary remained the same, I would not have the access to good medical care and I would have to pay for private schools most likely for my son. 

Villanelle

  • Walrus Stache
  • *******
  • Posts: 7402
Re: Is Your Location Hurting or Helping You?
« Reply #39 on: January 09, 2015, 09:11:11 AM »
I live in Germany, but Husband gets paid more to live here, though the amount of "more" is slipping quickly as the Euro fades (or is it the dollar surging?). 

We lived in San Diego, an extremely high COL area, for many years.  And yet there were all sorts of small savings that came from it.  Great weather meant less climate control, no need for a true winter wardrobe, the ability to work out easily and comfortably without a gym, no rust from salt on the car, and many other small things.  Also, salaries were somewhat higher than lower COL and that offset at least some of the expenses.  I suppose the high COL did hurt, but not as much as it might have seemed initially.

wild wendella

  • 5 O'Clock Shadow
  • *
  • Posts: 82
  • Location: Stamford, CT
Re: Is Your Location Hurting or Helping You?
« Reply #40 on: January 09, 2015, 09:34:32 AM »
"High cost of living" is basically a myth in the USA at least. People typically use mythical high cost of living areas as an excuse for outrageously lavish luxury budgets.

The USA does have major variance in the cost of housing. Rent of $2500/month is the norm in some places, but would be a sign of off the charts luxury in Kansas City, MO or Columbus, OH. Still, the whole reason to live in those $2500/month places is the high pay, so housing isn't really going to get in the way of saving a lot of money.

High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

Sorry, no. 

First, housing is a big difference which you can't write off by saying "other than housing".   My parents in south Georgia pay $500 a month for a 3bd apartment on a golf course.  Here in Seattle we paid $1700 for a 2bd apartment outside the city.  An apartment on a golf course even 40 miles outside the city would likely be even more.

Second, I visited my parents in 2014 and we ate at a local southern food restaurant.   I had country fried steak, fried okra, homemade mashed potatoes, cornbread and washed it all down with a glass of sweet iced tea.   My parents had the same thing (I think my mom got fried chicken though).   Total bill for the three of us was $13, which I paid.  I actually felt so bad at the low prices I left a $5 tip.   Here in Seattle $13 would barely cover one person's meal.

My parents pay under $2 for gasoline, here in Seattle our prices range from $2.20 at Costco to $2.70 in the city.

edit:  I know I am going to get blasted for eating the fried southern food, but it was heaven.  All things in moderation, including moderation.

Yeah, I'm going to chime in on the side of 'yes, *most* things really do cost a lot more in a HCOL area.'  Besides housing, auto gas, oil heat and restaurants... there's the higher cost of daycare.  We don't use it, but when I first got pregnant I investigated my employer-sponsored daycare - just over $2000 a month.  What is infant daycare in the midwest, $800?  Same goes for preschool, plumbers, electricians, babysitters, parking, etc.  Basically, there are very few things that cost the same in southwest Connecticut as they do in Kansas.
« Last Edit: January 09, 2015, 10:33:38 AM by wild wendella »

Bob W

  • Magnum Stache
  • ******
  • Posts: 2942
  • Age: 66
  • Location: Missouri
  • Live on minimum wage, earn on maximum
Re: Is Your Location Hurting or Helping You?
« Reply #41 on: January 09, 2015, 09:57:54 AM »
I live in a LCOL area --  Daycare - $15 per day for 7 year old,  gas 1.8,  mortgage 750 for our 3100 sq. foot beautiful home on 3-6 private acres.  Commute 12 miles one way with no traffic.  entertainment limited in winter.  Drive 90 miles one way to the "big city" numerous times per year.   

Home taxes $800 annual.

Low crime,  limited diversity.   Pretty much it is 1959 here except for the meth.  I like it a lot. 

The flip side is the poverty, lower education and low wages.  And the relative isolation/privacy. Great place to retire on the lake. 

schimt

  • Bristles
  • ***
  • Posts: 301
  • Age: 38
  • Location: New Jersey
Re: Is Your Location Hurting or Helping You?
« Reply #42 on: January 09, 2015, 10:10:51 AM »
Helping! HCOL (Central Jersey) so i am getting higher pay rate then colleagues at other locations in the same position, but am in an apartment with 2 roommates paying only $400 a month!

aschmidt2930

  • Bristles
  • ***
  • Posts: 272
Re: Is Your Location Hurting or Helping You?
« Reply #43 on: January 09, 2015, 11:46:25 AM »
Helping.  Moving to a state without an income tax (Dallas), and not owning property cuts down my tax liability significantly.

sky_northern

  • 5 O'Clock Shadow
  • *
  • Posts: 99
Re: Is Your Location Hurting or Helping You?
« Reply #44 on: January 09, 2015, 11:52:45 AM »
High expenses other than housing are just complainypants, not a mythical "high cost of living" area.

Have you seen the gas prices thread? :(

I posted earlier that I thought the bigger towns around me were at or near $2, but after my trip to the doctor's today I am better informed -- the lowest I saw was $2.39; my town is at $2.69.  Compare this to the people paying like $1.50!

I get that the majority of COL differences are housing, but there are other differences as well.  Gas being one for sure.  My husband and I visited his parents in rural-ish northern Wisconsin for the holidays and the difference in the price of food was considerable, at least at restaurants -- we didn't grocery shop so I'm not sure about that.  My in-laws took us out to breakfast and hubby was over the moon about getting 2 "tractor tire pancakes" (12"? diameter) plus eggs, sausage, bacon, a hashbrown, and a biscuit for like $8.  In Connecticut, the same amount of food would probably have been $15, though we don't eat out much at home so I can't be sure.  I imagine some of that price difference has to do with ingredient cost?

Those gas prices you just quoted result in a completely negligible difference in spending unless you drive your car too much. ;-)

The point isn't that things all cost the same throughout the USA. Rather, the point is that it's up to you what to buy and no one is forcing you to buy a $15 breakfast no matter where you live. Similarly, no one is forcing you to buy lots of gas. So it's not the "cost of living" of the area that is racking up those expenses, it's your own choices.

In general, most things are considerably cheaper anywhere in the USA than in Canada where I grew up, but I don't actually consider the cost of living of the two countries to be appreciably different, other than housing (which is much cheaper on average in the USA, although not specifically where I am living now). Aside from housing, everything else is rounding error.

I suppose you could also argue that state taxes vary significantly, but the efficient market handles that by adjusting pay accordingly.

I live in a High cost of living area -  housing (I paid 215k for my house, I was renting a 1-bedroom apartment for 1,300/month before then) is not more than medium-sized cities in the rest of Canada it's everything else that is costly. I think the difference is pretty significant.

My sister came to visit, she was so shocked at the price of milk she posted on facebook so I know how much it costs: $10.84 for a 4L jug (I don't buy milk), she says she pays less than half that where she lives.
Gas here is 1.69 /liter right now, I know drive less and I'm trying.
Heat is $35.44 gigajoule (GJ),  I keep my thermostat set at 15C and have smaller bills than lots of other people that I hear complain about their bills.

Sorry Americans for my laziness in not converting any of that to units you understand.

So defiantly there are a range of what you can spend in any city but there are significant price differences throughout the continent.

I don't know if I better or worst here. I am a reforming shopaholic so trying to see how little I can spend. Going to take some time, I'm not a quick learner. But I do get paid probably 20-40K more/year here than I would in Alberta, where my sister is and even less in BC despite it not really being LCOL - you pay for the view.

Mrs. PoP

  • Bristles
  • ***
  • Posts: 391
    • Planting Our Pennies
Re: Is Your Location Hurting or Helping You?
« Reply #45 on: January 09, 2015, 12:10:33 PM »
Helping.  We earn significantly more than a median household here (and across the US) and take advantage of very low (choose-your-own-adventure) state taxes.  Costs here are moderate, more expensive than the midwest, but cheaper than other places I've had offers to transfer to in the past and turned down (SF and NYC). 

But it's also a lot about lifestyle.  We live a short jog from the beach in a suburban neighborhood that is amazing.  I don't see how we could get this kind of lifestyle in SF or NYC for anywhere near what we currently spend.  The happiness our location brings us is a huge help day to day.  =)

Vilgan

  • Bristles
  • ***
  • Posts: 451
  • Location: Seattle, WA
Re: Is Your Location Hurting or Helping You?
« Reply #46 on: January 09, 2015, 12:14:41 PM »
This seems like a question that most people will answer with "helping" because if they felt like it was hurting, wouldn't they move?

Current location definitely helps. Salaries in Software Engineering in Seattle are great and we don't have the absurdly high real estate costs of the bay area (the other place I was considering when we moved west).

The place where it might hurt is when we actually want to RE. We really really love where we live and it would be hard to leave Seattle. Paying off the house and having enough liquid to feel safe to retire here vs moving will likely add a couple years of work. However, we both currently feel like we'd rather work a bit longer and live in paradise than retire early and move to a cheaper place we wouldn't like as much. No clue if we'll still feel that way in 7 years :P

WYOGO

  • Stubble
  • **
  • Posts: 165
  • Location: Salt Lake City
  • Great Basin
Re: Is Your Location Hurting or Helping You?
« Reply #47 on: January 09, 2015, 12:23:34 PM »
Helping.  Moving to a state without an income tax (Dallas), and not owning property cuts down my tax liability significantly.

Yep. Understanding how your state makes money is key. Lack of income tax is not the whole picture, though the impact is much greater than most other taxed aspects of your life. It is not all roses however as some of these states are fairy regressive (Washington/Florida). These two are the worst as it relates burden on lower income earners to generate and cover the operating expenses for the state. If one is open and flexible, one can align themself very closely with states that have very low tax burdens on items one utilizes the most.

Wolf_Stache

  • Pencil Stache
  • ****
  • Posts: 920
  • Age: 44
  • Location: Portland
    • Flower's Fang
Re: Is Your Location Hurting or Helping You?
« Reply #48 on: January 09, 2015, 01:05:41 PM »
This seems like a question that most people will answer with "helping" because if they felt like it was hurting, wouldn't they move?

Current location definitely helps. Salaries in Software Engineering in Seattle are great and we don't have the absurdly high real estate costs of the bay area (the other place I was considering when we moved west).

The place where it might hurt is when we actually want to RE. We really really love where we live and it would be hard to leave Seattle. Paying off the house and having enough liquid to feel safe to retire here vs moving will likely add a couple years of work. However, we both currently feel like we'd rather work a bit longer and live in paradise than retire early and move to a cheaper place we wouldn't like as much. No clue if we'll still feel that way in 7 years :P

I think Seattle has good salaries if you are a software engineer, and crap salaries for everyone else. I'm not making much more here than I was in SLC and my housing costs tripled.

Wolf_Stache

  • Pencil Stache
  • ****
  • Posts: 920
  • Age: 44
  • Location: Portland
    • Flower's Fang
Re: Is Your Location Hurting or Helping You?
« Reply #49 on: January 09, 2015, 01:32:34 PM »
Doesn't Seattle have something like a minimum wage of $15/hour? Here in the LA metro area it's around $9/hour and I think it's around $7.75/hour federally. So I'd assume that even "average" wages for non software people would be higher in seattle compared to other places.

No, that is Seatac. Seattle min wage I think is around $10.