Moving to HCOL Area. Tips/Suggestions/Etc.?

[23andfrugal]

Hi all,

I posted a case study a couple months back (https://forum.mrmoneymustache.com/case-studies/new-to-the-workforce-thinking-about-fire-where-to-go-next/) and one of the topics I touched upon was whether my SO and I should, in our job search, look for work in my HCOL hometown as opposed to the LCOL area we live now. Due to a variety of factors, that thought is now a reality! We move at the end of April to start our new jobs, much closer to my family.

I currently make $55k, him $30k in a rural area near a small city in the South. When we move, I'll be making $70k, him $40k. Without giving away too much identifying information, think NJ/NY/CT area.

(Some people asked why his income is so low for a college grad - it's just his field; agriculture related. He likely won't make a "lot" of money but his best chance to boost his income is to open his own business, which this job will help him do).

We've already been experiencing some pain re: rent prices, especially because we are currently getting a great deal through a friend of mine ($500/month for a 2 bedroom house, when market is around $1,000). We aren't planning to stay in HCOL area forever, but would like to gain, not lose traction on our money goals during the years we're here.

Do any of you live in HCOL areas on moderate incomes? How do you maximize savings while doing this?

TIA!

[MonkeyJenga]

Don't get a two-bedroom. Don't live in a fancy neighborhood. Take public transit. You're increasing your joint salary by $25k - how much does that work out to after accounting for changes in tax rates, 401k matches, etc? Even if your rent increases by $1,000 a month, that's "only" $12,000. Depending on which area you're in, $1,500 for a one-bedroom is doable.

[23andfrugal]

Unfortunately public transit won't be an option (I was very hopeful it would). We're looking at apartments in houses (so not complexes, if that makes sense) and trying to stay around $1200-$1300. Second week of looking and that's been a challenge, but we may have a couple of options at the high end of that range.

[MonkeyJenga]

Ah, OK, so not NYC! $1,300 would be less than 10k more annually. Is there any other area of spending you predict will go up?

[23andfrugal]

Nope, not NYC! The 'burbs of a medium-size city outside of the main NYC MSA. Sorry for being so vague - I'm a little paranoid about being ID'd online!

Rent is going to be the biggest, and I expect heating/electric will hit us as well. Our $500/month place has no HVAC, so we got through the winter with space heaters - cold, but doable. We won't be able to do that with a New England winter, and I'm pretty sure the cost per kwh is more as well. We cooled our current place with ceiling fans and pedestal fans, and we'll do the same in the new place.

Gas is 30-40 c/gal higher than it is here, so I'm anticipating my ~$85/month will go up to maybe...$120? Commute distance will stay the same.
I'm taking a bit of a shot in the dark that groceries will go up as I currently frequent an oddly cheap regional grocery chain here in the Southeast and the few times I've been back home, the basic stuff (chicken, hummus, veggies, etc.) has always seemed more expensive.

A big question mark is that our state government is heavily pushing tolls on the I's as well as major non-interstate roads, which could work out to a few dollars per workday (!) for each of us. We have no control over that (and you've probably figured out where I live now :P )

Those are the major ones I can think of, but I'm sure there will be other things I didn't plan for...

[MonkeyJenga]

LOL I make a point to know nothing about tolls since I don't drive. Your location is safe from me at least. But: I found cheap groceries in NYC, I'm sure you can do the same. I made a spreadsheet comparing different stores, brands, and cuts of meat, and I got a sense of what went on sale regularly.

Heat is usually included in rent, you should check with your potential landlords.

Can you negotiate working from home 1 day a week?

[accolay]

You're probably already doing this if you're here but I suggest not eating out and cooking your own meals. Don't order your groceries- buy your own at a cheaper/regular grocery store.

[LifeHappens]

HCOL areas usually have more resources because of the increased tax revenue. Take advantage of the library, cheap community gym, free concerts and the like.

[23andfrugal]

@MonkeyJenga I can work from home as needed, but because I'm a more junior level employee I think I'll have to "pay my dues" first. Re: heat, we've seen a couple like that, so I've been factoring that into the cost of the rent. I've never had heat (or water) included in rent, so picking up that utility would be huge.

@accolay We do, only have the occasional meal out. We don't do anything like ordering groceries, meal kits, anything like that.

@LifeHappens Thanks for the tips, I'll look into those. We actually have a really robust library system in the county we live now, which we make great use of. Our activities are usually hiking and camping, so higher gas prices will make that more expensive, but otherwise pretty cheap.

[23andfrugal]

I should add, I saved almost $30k of my $55k/year last year (about 65% after taxes; I'm counting 401(k) match in $ saved, so maybe cheating a little). I'm getting a $15k raise so I'd like to pocket at least half of that, but I don't know if that's possible.

[Adam Zapple]

If you are moving to a medium sized city in SW Connecticut I can probably help a bit if you'd like to pm me.  I know the area.

[Hula Hoop]

HCOL areas usually have more resources because of the increased tax revenue. Take advantage of the library, cheap community gym, free concerts and the like.

Yes - this.  Don't spend money, if you can help it, on entertainment.  Go to free or low cost movies, theater, music performances, the library, parks etc.

Live in a very small place - an efficiency or maybe a small one bedroom. Hustle and use your contacts (since this is your hometown) to find somewhere cheap.  If you don't have kids, don't bother living in a good school district. Make your own hummus BTW -it's really easy and way cheaper.  Don't eat out or eat take out.  Shop at ethnic grocery stores.

[Hirondelle]

Considering living with roommates. I know some couples here on the forums live with others (couples or other single folks). Another option to do this is by renting a 2 bedroom place yourself and rent out the other room so you get to pick the person yourself.

In case you don't have a social network in the area yet, this might also speed up the proces of socializing. If you end up not liking it, you can always move again in 6 months or so, still leaves you with several 100-1000s saved :)

[kimmarg]

Nope, not NYC! The 'burbs of a medium-size city outside of the main NYC MSA. Sorry for being so vague - I'm a little paranoid about being ID'd online!

Rent is going to be the biggest, and I expect heating/electric will hit us as well. Our $500/month place has no HVAC, so we got through the winter with space heaters - cold, but doable. We won't be able to do that with a New England winter, and I'm pretty sure the cost per kwh is more as well. We cooled our current place with ceiling fans and pedestal fans, and we'll do the same in the new place.

Heating may be  HUGE cost. Investigate throughly how much it will cost before you rent! Electric heat is stupidly expensive (and yes, the electric rates are higher too)  If you're not on city natural gas and need heating oil be sure to do your research. Obviously make a big difference on the location, size of house, insulation etc but paying $500/month for heat in the winter months for 1200 ft2 is not at all uncommon

[Abe]

We lived in Chicago for a few years on moderate incomes. The main thing we noted were the significant differences in apartment rents between relatively close neighborhoods (i.e. less than a mile apart). It was worth it for us to get a decent apartment in a less desirable part of town (not necessarily higher crime, but not as close to the "culture", etc). We ended up buying rather than renting, and got lucky that the area improved over time. It was surprising how shabby a comparatively priced apartment in the nicer neighborhoods were compared to our place! Then again, some would prefer the nicer amenities so it depends on your preferences.

I second the importance of finding out the heating bill in the winter. They can be very expensive, even with natural gas. This is especially important if you're renting since you have no ability to add extra insulation.