Moving from LCOL to HCOL.

[poetdereves]

My wife and I have tossed around the idea of moving back home near our family in Southern California. We got married in 2013 and promptly ran away quickly to a place with a lower COL, attended school and worked on increasing our income, and got our financial lives in better order. Currently we make $55k combined because I am in school working part time for peanuts while DW works full time and brings in $45k. Once I finish school I will have the potential to bring in around $45k in our low COL area, or around $75-85k in the HCOL area near our parents. DW is currently finishing certifications that will help increase her income to somewhere between $80-90k if we move, or around $50k at her current job (capped at 7% raise increase no matter the level of promotion). In just a couple short years our income has the possibility to increase exponentially. The salaries of our fields are easy to find online and rarely deviate from the standard that we search, so it is highly likely that if we stay in our LCOL are our yearly income will be around $90k. If we move it has the likely potential to be between $150-175k.

Housing is going to be the biggest expense to get used to for sure. We pay around $900 a month all together for our home in the LCOL area, but there’s a high possibility that it will be around $3k a month for a lower quality place.

Anyone here moved from a LCOL area to a HCOL ONE? What are some things you wish you would have known? What happened that you didn’t expect? What big pitfalls should we watch out for?

We are still a couple years away from making any choices, but we really want to try to weigh all of the variables far in advance!

[HBFIRE]

I love living in cali (I think its paradise), but its expensive.  Its not just housing.  Taxes are much more, gas is much more.  It's not an ideal place to build wealth, that's for sure.  If you have to commute, it sucks here.  I run my business from home and live near the beach, so I almost never drive.  The traffic here is really unbearable.  If I had to drive regularly I wouldn't want to stay here.

I'd do a comparison with after tax income and then compare living costs.  Believe it or not the salary levels you mentioned aren't that high for living here.

One thing about Cali is that job loss can really be quite devastating, as you then have to support yourself with huge living costs without income.  This is something to consider, how stable your jobs are in your industry, etc.  In the last recession it was bloody here, I think more than most places due to how much it costs to live here.  There is a lot to be said for living lean in case of job loss, and that's pretty much impossible to do in socal.

So yeah, guess I'd caution against it unless the numbers make total sense.

[AZDude]

Hi, I grew up in Arizona. Moved to southern California for a little while and then came back to Arizona. Sticker shock at the prices of stuff in California happened, but it wasn't just the obvious stuff. We knew housing would be expensive, and that gas would be expensive, etc...

Day care prices was the big shocker. It was about twice as much as it was in Arizona, and pretty much single handedly killed our budget, and eventually, our dream of living in California.

Looking back, there were things we could have done differently that would have made us more successful. Preparation being the #1 thing. We sort of left on a whim and lived like we were on vacation the first few months. We had preconceived notions of what living there was supposed to look like, and when we were forced to compromise for the sake of not going bankrupt, we were disappointed.

[poetdereves]

What were typical prices of the daycares that you were looking at? We don’t have kids yet, but the chance is high that we will.

I would do my best not to have a long commute, but gas definitely costs more, taxes are higher, and housing seems insane. We live pretty minimally where we are and would continue to do so if we moved, but that doesn’t mean that our COL won’t close to triple.

[cats]

What were typical prices of the daycares that you were looking at? We don’t have kids yet, but the chance is high that we will.

I would do my best not to have a long commute, but gas definitely costs more, taxes are higher, and housing seems insane. We live pretty minimally where we are and would continue to do so if we moved, but that doesn’t mean that our COL won’t close to triple.

Here in the bay area (so maybe a bit more expensive than what you are looking at, but in the same ballpark), a "cheap" in-home daycare for an infant (<2 yrs) is about $1500/month, up to $2000/month is common.  The most expensive one I saw was $2700/month.  Daycares often have long wait lists though, so you may not have the option of picking a budget friendly one. 

We pay more for childcare than we do for housing.  It's a big cost and much harder to skimp on (though if you will have relative nearby and they can help out, maybe easier...)

[Slow2FIRE]

With the income level being discussed ($150K-$175K) for a married couple, the taxes in California are really not that bad.  Very similar income tax load in many states across the union.  Compared to Arizona, Nevada, or Washington state it may seem like the taxes are crazy - but most states don't have such low taxes (as AZ, NV, WA).

Luckily, you have the advantage of having lived in Southern California prior to starting your careers so there won't be quite as much sticker shock.

[AZDude]

What were typical prices of the daycares that you were looking at? We don’t have kids yet, but the chance is high that we will.

I would do my best not to have a long commute, but gas definitely costs more, taxes are higher, and housing seems insane. We live pretty minimally where we are and would continue to do so if we moved, but that doesn’t mean that our COL won’t close to triple.

Least expensive we could find was $1,200/month full time. Most were like $1,600 for full time. This was a few years ago.

[mm1970]

What were typical prices of the daycares that you were looking at? We don’t have kids yet, but the chance is high that we will.

I would do my best not to have a long commute, but gas definitely costs more, taxes are higher, and housing seems insane. We live pretty minimally where we are and would continue to do so if we moved, but that doesn’t mean that our COL won’t close to triple.

I live in So Cal/ Central Coast.  My good friend is a licensed home daycare provider, and she was the provider for my second child.

She and her family moved to Arizona for 2 years before they decided it wasn't for them.  One of the reasons was child care.  It was very hard to make a living at it where they were in Arizona - many providers, different standards.  I think she said she was lucky to get $150 a week for an infant there.

Here her rate was $250/week (5 days, 9 hours a day) 6 years ago and $320 a week two years ago.  For a toddler aged child, it's similar to one of the cheaper preschools.  There are home daycares that are cheaper, but not very many and the quality is not quite there.  (For example, my older son was in a different daycare, which was and is still a bit cheaper - but there was more TV involved, a couple of hours per day).

Most centers that have infant care here are $1500+ a month.

[HBFIRE]

I had no idea child care was that much here!  And here I thought he COL was high without it.  Wow just wow.

[poetdereves]

That’s pretty high, but actually not as bad as I was expecting to be honest.

[patchyfacialhair]

I'm in a "normal" cost of living city, though prices keep going up. We'd make slightly more in CA, but all the other expenses would go up, at least proportionally.

For how much we spend here, we can afford to fly, stay in a hotel, and in effect vacation in CA multiple times per year to see family, and still come out ahead. If we moved to CA, sure, some family would be close, but then we probably would be less able to afford flying back to see other family. For that reason, we're staying put, even though the wife loves CA (I grew up there, and hope to never move back.)