Hello Everyone,
For those of you willing to offer some advice to a beggar/new mustachian, I'd like to pose a question about the possibility of relocating my young family.
My wife and I are new to the mustachian method of managing our finances. for a few years now, we've been fairly laissez faire with our money because life has been pretty kind to us. While we're still not in dire straits, we feel the walls closing in on us and are very thankful to have found this resource and corrected our mindset before things got bad. A little about us:
We live in western washington, about an hour north of Seattle. I work from home for a tech company in the city and my wife is a stay at home mom with our 2 children under the age of 4. We are both 27 and graduated from college 4 years ago with about $25k in student loan debt. We moved into our current home a little over a year ago and really enjoy our time here, but we've really pushed ourselves to our present limit financially.
Salary - $58k, roughly $3400 - $3600 a month take home
Mortgage - $305k at $1791 a month
Student Loans - About $16k at $222 a month
Medical Debt - about $700 at $50 a month
Credit Card - $1500 at $101 a month with 0% interest
Internet - $80 a month
Phones - $133 a month
Car Insurance - $45 a month
Utilities - hard to say with bi/tri monthly billing cycles. safe to assume around $200 a month
Food - $600 per month
Assets
$5,595 cash
around $10k in a 401(k), not maxing the employer match after a policy restructure. planning on taking care of that soon.
We also have a 1993 f150 (free) and a 2000 explorer (paid $1,000 cash).
So, while we have enough to pay our bills, buy our food and have lots of fun on our 4.5 acre homestead, the savings rate is pretty mediocre.
The Question
Working from home is a huge perk. I've been working at my company for 4 years, received pretty decent raises and a promotion, and really enjoy the whole situation overall. However, money stress is definitely present in our lives. We're pretty much one month away from financial doom if anything ever happened to my job. With a savings rate of $200-$400 a month, I don't feel as though I can save fast enough to bulletproof our lives from such an instance.
In the year since we bought our house, values around our area have skyrocketed. Our loan amount is $305k, and there is nothing in the county on acreage being listed for less than $385k. During our time here, we have cleared a bunch of forest and tripled the usable acreage by converting the previous forest to pasture. We've also planted an orchard, a berry patch, and a flower farm. We painted the inside of the house, fixed drainage issues, fixed the grey water system, remodeled the laundry room, etc. etc. We have a realtor friend coming over to take a look at give us a rough estimate for what we could sell for. My expectation from looking at comps is $385k-$400k.
Where would we go? Back to our college town of Ellensburg. We lived there for 7 years between school and the purchase of our first house while I worked from home. The cost of living is significantly less expensive and we adore the town. There are pros and cons to each option:
Staying at our current place - We live in one of the most desirable places in the country on our dream homestead. We got our place for a steal compared to other places in our area, even though it's still tough for us to afford. If my job went away, there are a couple of decent sized cities within a half hour drive that I could try to get a job at. My wife is a certified teacher and could easily get a job in our county, but right now she'd be working for less than minimum wage if we put the kids in daycare. Hardly worth it. If we stay, we would need to save every penny, pay off debt and pray nothing goes wrong with my job. Most risk management jobs like mine are in downtown Seattle and I refuse to drive in traffic for 4 hours a day to work in the city.
Moving to Ellensburg - If we sell our house and move to Ellensburg, it's a virtual guarantee that we could sell within a couple weeks, pay off all of our debt immediately, put a down payment on a house and be left with tens of thousands in the bank. My wife is planning on getting a teaching job when the kids are able to go to school, so we would immediately begin saving 100% of her income on top of the increased savings rate we'd automatically realize. Sounds like a no brainer, right? The problem is that Ellensburg is a small town with only one decent sized city near by (40 mins away). If my job were to go away, there are very few opportunities in my field. It's likely that I would need to change fields completely or start my own business (an eventual goal). However, living in Eburg would mean that our whole lives could easily be supported by my wife's teacher salary while I figure out what to do from there. Either way, our savings rate would be pretty good.
Like many of you, I'm trying to bullet proof our lives. To maximize options and save as much money as possible. Ellensburg wins on all fronts except the nearly complete lack of back up white collar jobs and small market for entrepreneurial endeavors. Our current location, while difficult to save and keeping us on the financial edge, has a fairly large job market and an insatiable market for eventual entrepreneurial stuff.
So, what to do? Stay where we are and try to gain momentum while we wait for my wife to get a job and save 100% of her income? or sell out, move, and get a crazy financial head start at the risk of no career step ups (outside of the company I'm in) in a town we love?
Thanks for any advice, and sorry for typing up "a tale of two cities" in my first post.
Cheers.