This post is from our regular Wednesday contributor, Erin.
As some of you know from my previous post on the subject, last year I relocated from a higher cost of living area to a lower one (Long Island, NY to Charlotte, NC, specifically).
It had been a goal of mine to move for a while, as my financial goals were constantly taking a backseat because my monthly expenses were so high.
I’m naturally frugal and cut most of my expenses down as much as possible, but rent was still overpriced, and that’s an issue in just about every expensive city!
The argument is always that the better paying jobs are in the higher cost of living areas. If you’re employed in NYC, for example, you’re likely going to be earning more than someone working in the south.
I wanted to have a little fun and play devil’s advocate today. I know there are people who are passionate about both sides of the argument, and I want to hear your experiences and thoughts in the comments!
Let’s take a look at what needs to be considered when thinking about moving to a higher cost of living city.
The Best Bang for Your Buck
You don’t always get the best bang for your buck when it comes to living in a more expensive area. Going back to my own example, we were paying $1,250 for a ~700 sq. ft. basement apartment with one bedroom and one bathroom (utilities included, at least).
We’re currently paying $900 (base price) for a fancier 2 bedroom, 2 bathroom place, with a balcony (1,050 sq. ft.). With utilities, it’s about $1,050 a month (on average).
It blew my mind to realize how much more we were getting for our money when we first moved here. I admit, I was hoping to rent an apartment for around $800, and we might have been able to had we gone with a 1 bedroom, but I wanted office space. There are still more affordable options nearby!
Best of all, according to Nerdwallet’s cost of living calculator, housing down here is 58% less than it was back home. That’s a big difference.
Temptation to Spend
Ask anyone that lives in a major city, and they’ll tell you the amount of activities available is ridiculous. Restaurants, boutique shops, street vendors, studios and more line the streets.
Unfortunately, this can lead to the temptation to spend. If you’re only a short walk away from your favorite place, it’s harder to stay away than if you were 15 minutes away by car.
More Variety Isn’t a Bad Thing
On the other hand, having so many options to choose from makes it easier to live within your budget. There have been many posts documenting how it’s possible to live in NYC on a lower salary.
Cities offer tons of free things to do, and if you know the local specials, you can score some great deals. Having so many businesses around makes for competitive pricing.
If you live out in the middle of nowhere, you might have one or two stores to rely on. Limited choices means you might be forced to buy things at a certain price.
Your Salary and Career
Earning more is always nice. If you prioritize your finances, you can avoid the temptation to spend, and you can probably choose your place of residence a little more intelligently than your peers (deciding to share a room, or deciding you just don’t need much space).
More career opportunities are directly related to higher salaries, too. There are simply more companies in bigger cities, and thus, more job opportunities. If you want to keep moving up, living in a big city is going to help you network and use those connections to your advantage.
Public Transportation
This one is both a blessing and a curse, I think. In some places, public transportation is fairly expensive, and there are still people who choose to own a car. Then there are cities that have lackluster, unreliable public transportation.
However, if you can get away with not having a car, and having reasonably priced public transportation (or a bike), then you have a winning combination.
Regular and Irregular Expenses
While our rent dropped in price, food hasn’t (which was disappointing). According to the cost of living calculator, food is supposedly 25% less here, but some items are actually more expensive than others.
Gas is cheaper, at least, and our car insurance rates both went down dramatically after moving.
Utilities are another expense to consider. While our electric is cheaper down here, water is more expensive.
What about taxes? Some states don’t have income tax, while others have a higher sales tax. I should mention that we were never required to pay vehicle property tax in NY, but we are here.
My parents experienced a huge difference in their property taxes when they moved, too. They were paying $7,000+/yr on Long Island, and now pay $250/yr in SC. But, their homeowner’s insurance is more.
As you can see, balancing costs can be tricky. A lower cost of living area might not be lower in every single category. It’s worth it to gather the necessary information to make an informed decision on how moving will impact your finances.
Other Items to Consider
Let’s face it – maybe you don’t like the high prices where you live, but there are other reasons you stay there, such as:
- Family – Some people simply enjoy living near their loved ones.
- Weather – I could never live somewhere that didn’t have fall. Weather can really affect our mood, and it’s important to consider.
- Network – While it’s true that we can communicate with anyone anywhere now, there’s still value in having a local network available to you. When you move, you lose your contacts, and starting from scratch isn’t easy.
- Environment – Lastly, I think it’s important to note of the type of environment you enjoy living in. Some people aren’t cut out for the city, while others would be driven crazy by living in the boonies.
Conclusion
When asking yourself if it’s worth living in an expensive city, I think it’s critical to consider other factors – not just ones that revolve around money.
As with many things in life, money is not the end all be all. Perhaps you want to move because you’re looking for a new adventure. Maybe you want better educational opportunities for your children. Or maybe you fell in love with an expensive place!
In my opinion, where we live contributes a whole lot to our overall satisfaction with life. You can’t always put a price on that.
Plus, for some people, working remotely is an option – which gives you the freedom to live anywhere and still make a great salary!
___________
In the end, I think it depends on your priorities and your game plan. Some people have no desire to try and make it big in the city, and others live for it.
The best thing you can do is to be prepared and arm yourself with knowledge so that you can prepare your finances for such a transition.
Do you live in a high or low cost of living area? Do you want to move? What are the positives and negatives from your experience?
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Funny, I just made the choice to move to the city for a job. I am paying almost what you paid – $1,150 for a 705 sq ft. apt. I have to say that because it’s just me, I love it. Personally, I’d rather be in a smaller space close to everything than a bigger space further away. (It’s all about location for me.). But, I do see how this is not for everyone.
I would prefer to live in an average cost area but near a city where there are activities to choose from if I desire. That’s essentially what we have now living in the suburbs about 25 minutes from Atlanta. I definitely wouldn’t take a job and live in an expensive city just for the money. There are other factors I value too much.
We live in an inexpensive area, and I prefer it for many reasons. It is easier to have a large living space and a yard for the kids, for example. I have no desire to live in a big city, but I do love visiting!
We live in a relatively inexpensive area and prefer it for a number of reasons. When we were first married we lived in San Diego and while I loved it, it was just too expensive. It’d be one thing if the income matched up, but it largely different and many people were ok with that…because they’ll put up with it to live in San Diego. :) We love to visit big cities, but a smaller one is preferable to us.
I think you listed the positives and negatives really well. My rent is expensive but my utilities are VERY low, partly due to the nice weather. For instance I don’t have A/C and heat ins’t an issue (but I don’t pay for that anyway). There are more opportunities here, but traffic and transportation is a nightmare. You take the good and the bad. I still toy with the idea of moving, but right now I’m holding off.
This was a great post!! As someone living in NC too, I would say the cost of living is about the same as when we lived in AZ (though I think those places do have similar costs of living). Quality of life is MUCH better here though because, like you, the weather really impacts my mood. AZ was just too hot. That being said, I could also never live anywhere that had brutal winters. I love the mild climate that NC offers!
We moved for the adventure and if we were to move again, while I would look into cost of living, that wouldn’t be a deal breaker for me. Like you said, money isn’t everything and you have to live somewhere you enjoy!
I’m with Sarah (below)! I live in AZ right now and, while I have family nearby, housing is cheap, and there are a variety of things to do, I HATE the weather. Also, none of my friends (who I consider family, because I’m an only child) live here; they all live in the Pacific NW where I went to school.
While a cheap cost of living has kept us here for a while, I’m sorry to say that I’ll probably end up moving somewhere more expensive (AKA pretty much anywhere but here). In the end, the weather here just ruins my mood. There are other reasons, too, but I’ve lived here on and off for 28 years. I’ve had enough of 8 months of 90+ degree weather. I’ll take paying more in housing to have a better quality of life :)
We live in a small city, but it’s a very high cost of living area. I struggle to figure out why. The weather isn’t enviable. It’s not filled with McMansions. I won’t miss it.
Great points in this article, as always, Erin! :)
Well written, even-handed post! Obviously, the topic of living in an expensive city is near and dear to my heart. At my blog, I try to reach people who are, as you described, “city people” but don’t think that they can afford living in a place like NYC. It isn’t as black and white as that and as with everything, the choices you make every day effect how expensive a city, small town, or any other area can be. Figure out what makes you happy first and then spend/save based on that!
Thanks for this post.
Great post and one that resonates with me a lot at the moment. I currently live in an area with a high cost of living. I want to move closer to home and found an area I really love, but the cost of living is around the same/slightly higher. Luckily there are more job opportunities with the higher cost of living. It’ll be worth it for me because of, well people, and to me that’s worth the extra cost to be someplace I’m happy.
Our housing and taxes are much lower than being in a city. I also like having small schools and knowing my neighbors. The downsides are lack of choice in retail and difficulty getting affordable air fares. We also have to drive quite a bit because everything is spread out and there is absolutely no public transportation.
We live in a low cost of living area, but all the places that we are thinking about moving to will be at least a little higher. It will be interesting to see how that impacts us!
sunburntsaver Can I recommend NC?! Haha :)
I live in NJ and it’s expensive, especially property taxes. My husband and I definitely talk about this alot. We like the proximity to NYC but I don’t think we’ll stay here in retirement.
Financegirl Exciting! I’m just not a city person, and I’ll admit that. But if I did live in the city, I think I’d make the sacrifice in name of location as well. It’s worth it to be within walking distance of so many places.
Brian @ Luke1428 Yep, that’s pretty much where we’re at, as we’re around 15 minutes from Charlotte. It’s great to have the diversity, but our rent is far lower!
Holly at ClubThrifty Very true – I know I loved taking advantage of the backyard we had when I was younger, and our neighborhood was very friendly. Living on a cul-de-sac had its perks!
FrugalRules It seems like it comes down to loving the city enough to make the sacrifice! There are definitely people that can make it work, I just don’t think I’m one of them. I like being able to save!
Beachbudget There are certainly hidden benefits and negatives to both, and it’s so hard to consider all of them until you’ve experienced living on both sides of the spectrum! Utilities can make a serious dent in the budget – I remember my family was paying $400/month for electric back home.
Sarah Brooks Weather really makes a difference! I know I couldn’t be happy living anywhere that had lots of storms or tornadoes, no matter how cheap, as I’d be having a heart attack constantly. I like the idea of moving for the adventure aspect!
sunburntsaver Moving away from friends and family was probably the worst part, honestly. It’s hard when everyone is hours away, budgets are tight, and schedules don’t match up. Moving closer to friends and family has a lot of benefits!
Completely agree that we have to consider the quality of life we’ll have in one place as opposed to another!
kay ~ lifestylevoices.com That’s the worst! Technically, that describes some parts of LI. Property taxes killed everything. Some people thought being surrounded by beaches was worth it, but not me.
The New York Budget Thank you! It’s been inspiring to see you, along with many other bloggers, highlight the fact NYC is doable even on a tight budget. The diversity in major cities does help as there are more solutions available. While I didn’t mind visiting NYC, I just couldn’t see myself living there. =)
Alexis87 People are a HUGE factor when it comes to moving, I think. We moved closer to my parents, but left behind all of our friends, and that’s affected me a lot more than I thought it would. Good luck with moving!
This is a great post and something that has been on mind lately!
When I moved to Seattle my cost of living skyrocketed, especially rent! But the major trade off was a much higher salary for the day job. I know I won’t be here forever, so I accept the cost of living for now.
Eyesonthedollar These are good factors to consider when living away from cities. We pass by a lot of towns like this on our way to my parents, and we’ll go an hour without seeing a grocery store. Housing and taxes eat up a lot of money, though, so it can be worth it!
SenseofCents That’s interesting, as I’ve been thinking about trying to move somewhere even cheaper, but that’s not always possible (or worthwhile)!
Practical Cents Property taxes are really the worst. My parents just paid something like $250 for the year, when they were paying $8,000 in NY. Technically, they don’t own the land their home is on (it’s leased), but my friend paid $2,000, which is still quite a difference.
believeinabudget It’s good to consider the length of time you’ll be in a place! I hadn’t thought of that. I wanted to move out of NY as soon as I could, so I had no choice but to accept the cost of things as they were, but I wasn’t too happy about it. =)
I’d do it if I were still young and single. Now with kids, I love being in a smaller and lower cost of living town.
Mark@BareBudgetGuy Kids do complicate things a bit! Having less expenses does make it easier to live in a higher cost of living area, and being single (or DINKs) lends itself well to that.
We actually chose to move back to NY and live in a more expensive part of the world specifically for my career growth but more importantly for my son. After living in Charlotte, Atlanta and Tampa, we realized that the public school systems were not that great and we also wanted our son to have more culture than just a trip to Target on a Saturday. We do pay a lot in taxes and our home was expensive; however, we love that we have taken a quick train ride and seen the Met or the 9/11 memorial or a Broadway show. We really do take advantage of the city around us and we are happy to make the sacrifice.
blonde_finance Have to agree there – I feel like I was a bit spoiled going through the NY educational system. Until I graduated, I hadn’t realized regents exams were specific to NY and I was always baffled that others didn’t have to take them! (And also a little upset…)
I moved from Boston to Portland to save money, but now Portland has become so expensive that I’m not sure it makes a difference :) I think that you can save money and make smart financial decisions wherever you live, and it really just depends on your expectations.
I moved from semi-rural Kentucky to Los Angeles, California. The cost of living is drastically different. For instance, rent for our two bedroom apartment is a little over three times the amount of the mortgage on our house in Kentucky. My husband’s salary increased quite a bit with the move and there are more opportunities in his field (software engineering). With my career, however, I feel like I would actually be making more money if we still lived in Kentucky because I would have been able to better leverage my professional network there. I knew everyone in the legal community in our hometown. Then I moved to LA, where I knew no one and attorneys are a dime a dozen.
But, there are several things that work out the other way. We spend much less on utilities because of the milder weather. Although gas is more expensive, we don’t have to drive as far. We can find many free or inexpensive things to do for entertainment, whereas in Kentucky there wasn’t much to do. On balance, I’m happier in California, and I will continue to pay more to be here. It all comes down to personal preferences though.
emmalincolnblog Agreed – you put that perfectly.
Settle Your Finances Great analysis! Losing your network can be a huge blow, as you said, but I’m glad you’re enjoying LA. It really does come down to personal preference and what’s more important to you in the long run.
I’ve always lived in the NYC area and though it’s expensive, having world class culture, food, education, entertainment, and well, everything, at my fingertips, is something I have trouble imagining living without.
Where we live (Cambridge, MA) has a pretty high cost of living, but we’ve found ways to make the city work for us. We do earn higher salaries than we would in a lower COL city and, we resist the temptation to spend. Like you said, if you can avoid spending those higher salaries, it’s a pretty good deal.
We also find that the many options we have (in grocery stores, etc) enable us to comparison shop for just about everything. And, we have a $0 entertainment budget since there are so many wonderful free activities available. The one cost that we can’t avoid, though, is our very high mortgage payment. But, we’re OK with it since it’ll become a rental property in a few years.
I definitely live in a high cost of living area here in NYC and housing is the main expense that is significantly higher. Moving has crossed my mind but with most of our family here plus our friends, that’s not likely to happen. NYC metro area does have a lot wonder benefits though but sometimes I wonder how much better off financially we’d be if we lived in a lower cost area. Sometimes the jobs here don’t really have that much of a higher salary. For example, I work in government and in the NYC metro area we get around $3k cost of living adjustment…but that doesn’t really make up for the difference in cost of living if I were living in upstate NY where a house or rent is a fraction of the costs it is here.
agree, Erin. Money should be a consideration but not the sole factor in where you live. I do live in an expensive city, LA, and I wouldn’t want to live anywhere else. This where we grew up, where much of our family still resides and where we wanted to raise our daughters. We certainly pay a premium on things and we also enjoy many benefits too. Ultimately, it works out for us, but for other people, it might not. I think it’s really personal and sometimes you need to experience first to figure out what’s best for you. Because there are definite pros and cons to both.
brokeandbeau It’s interesting how we become accustomed to our surroundings like that. Growing up on LI most things were nearby, and I’ve always had a difficult time imagining what it’s like to live so far removed from the city!
Mrs. Frugalwoods Housing seems to be the one caveat! I agree that having so many options is nice, as I’m a huge fan of comparison shopping. It would really bother me if I was forced to go to just one store for everything. I can’t lie, I also like the convenience of having so many stores around!
Andrew LivingRichCheaply Ah yes, I saw the COL adjustments when I took a few of the civil service tests. It is kind of a joke, but better than nothing, I guess. My cousins live upstate – it’s pretty affordable from what they say, and they’re not too far from Albany. If we hadn’t moved out of NY, upstate would have been my plan.
ShannonRyan Experience does really help! I’ve lived in suburbia all my life, so it’s what I’m used to, but after reading so many comments about people loving their life in the city, it makes me wonder if I’ve been too quick to dismiss it. I’d love to live in a few more places before settling down, as every city has something different to offer.
This is definitely something I struggle with – great job summing it up, Erin! I enjoy living in a city, and plan to move in the next decade to an even more expensive city – from Boston to San Francisco. At the end of the day, I’d rather focus my spending on living somewhere that allows me opportunity and makes me happy than pocket more savings but have a lower quality of life.
Of course, on the flip side of the coin, it’s never nice to feel like you’re spending everything on rent and can’t enjoy the city you’re renting for!
Our city seems to have become one of the most expensive in the world (Melbourne, Australia), especially when it comes to housing. There are a huge number of suburbs though with various price points, but we’re living in our absolute favourite (and reasonably expensive!) location, but wouldn’t change it for the world at the moment (as long as our finances continue to improve that is!)
Becca from beccasloans I like that attitude, Becca! It isn’t fun to pay a large amount toward housing, but there’s always the option of having roommates. If you’re going to be out enjoying the city most of the time, at least you won’t be home as much!
Jason@Islands of Investing I’ve heard a bit about the housing prices in Australia and NZ (and also from watching House Hunters – reliable, right? =)). It’s great that you’ve been able to identify your favorite spot and live there. I have a lot more traveling/exploring to do before I figure that out!
I live in a low cost of living area, that has some high priced items as well (ie: driving 3 hours to an airport). I definitely miss living in a big city, but I live in fear that we will go on a massive spending splurge once we do, because we aren’t used to being able to go out and buy whatever we want, whenever we want.
moneypropeller I do think the temptation to spend is a factor that most people don’t consider until they live away from a city. I know that if I had a 30 minute drive to run errands, I’d be more careful and selective in planning things out. Having so many places 2 minutes away makes giving into convenience an issue.
We’re in the metro nyc area, so housing and parking are insanely expensive. I sometimes think about moving somewhere with a lower cost of living, but as you said things aren’t necessarily cheaper (or significantly cheaper) just because you’re not in a metro area. My parents live in rural Maine and their groceries are more expensive. Their heat bill is also a lot more expensive because it’s a lot colder there in the winter.
StudentDebtSurvivor There are definitely other factors at play besides salaries and expenses! I didn’t expect our groceries to be more expensive here, and it’s been one of the biggest adjustments with our expenses.